Thematic feature - redundancies and redundancy costs

Download article in original language : GR0311104TEL.DOC

This article examines the procedures and costs involved in collective redundancies in Greece, as well as current trends and debate in this area, as at November 2003.

In November 2003, the EIRO national centres in each EU Member State (plus Norway), were asked, in response to a questionnaire, to give a brief overview of: the procedures and costs involved in collective redundancies - ie the dismissal of a number of employees for economic/organisational reasons (rather than reasons related to the individuals concerned); the levels of, and reasons for, redundancies over recent years; and current debate on the issue. The Greek responses are set out below (along with the questions asked).

Redundancy procedures

Please outline briefly the statutory procedures involved in making 'collective redundancies' (please indicate how these are defined) in your country, in terms of: information and consultation of employee representatives/trade unions; notification of (or obtaining permission from) public authorities; notice periods to be given to the redundant employees; rules on the order of priority for redundancy or giving special protection to particular groups of employees; and obligations to mitigate the planned redundancies or provide assistance in the form of redeployment, training, outplacement etc (including provisions on 'social plans'). Where collective agreements add to or improve on these statutory provisions, please provide a brief overview of such additional procedures (with examples).

The basic legislative framework determining the procedures for carrying out collective redundancies in Greece is provided by Law 1387/1983, since amended in some aspects by Laws 2736/1999 (GR9907142N) and 2874/2000 (GR0104104N). According to the provisions currently in force, collective redundancies are deemed to be dismissals carried out by companies employing more than 20 workers, for reasons unrelated to the individuals being dismissed, and exceeding the limits set by the law in any one calendar month. These limits are set on the basis of the number of persons employed at the beginning of the month. On the basis of Article 9 of Law 2874/2000, these limits are:

  • four employees in undertakings or establishments employing between 20 and 200 people; and
  • 2%-3% of staff, or at least 30 employees, in undertakings or establishments employing over 200 people. The precise percentage is set for each calendar year by decision of the Minister of Labour, according to the conditions prevailing in the labour market.

Before carrying out collective redundancies, employers should enter into information and consultation procedures with the workers’ representatives for the purpose of exploring the possibilities of preventing or reducing the number of redundancies and their adverse consequences. More specifically, an employer must successively take the following actions:

  • inform the workers’ representatives of its intention to carry out collective redundancies;
  • communicate this intention in writing, expressly setting out the reasons, the number of people it intends to dismiss and their sex, age and occupation, as well as the number of people employed by the company. At the same time it is obliged to provide all additional information justifying its intention that could be useful in formulating constructive proposals; and
  • submit the abovementioned documents to the Prefect’s office and the Labour Inspectorate. In the event that an undertaking/establishment has branches in more than one prefecture, copies of the documents should be submitted to the Minister of Labour and the Labour Inspectorate in the area where the establishment in which all or most of the dismissals are planned is located.

The workers’ representatives who take part in the aforementioned consultation and information procedures may include the following:

  • legal representatives of a trade union represented in the company of which at least 70% of all workers and the majority of the redundant workers are members;
  • a group of workers who are members of the unions represented in the company, designated by the executives of all the unions, taking into account the principle of proportionate representation. This applies where there are a number of unions, none of which represents 70% of all workers or the majority of the redundant workers;
  • where there are no unions represented in the company, a three-member committee of workers for undertakings employing 20-50 people and a five-member committee for undertakings employing over 50 people. Such committees must be elected by a secret ballot taken at an assembly of workers. The ballot shall be held not more than one week from the date that the employer initiates the process;
  • a three- or five-member committee made up of workers having the greatest length of service with the company. If this is not feasible, representatives should be selected by the procedure described above;
  • the company-level works council (GR0309106T); and
  • representatives of occupational-level or industry-based unions, when the planned collective redundancies affect specific occupations and categories of staff, and when there are special normative provisions to this effect emanating from the works rules and the relevant collective agreements.

Consultations between the employer and the workers’ representatives last about 20 days, beginning on the date of the relevant invitation from the employer. The outcome of their discussions is kept in a special set of minutes, which is signed by the two contracting parties and then sent to the Prefect’s office. In the event that the undertaking has branches in more than one of the country’s prefectures, the minutes are also sent to the Minister of Labour. At this point, two possible situations may arise, if agreement is reached between the employer and the workers’ representatives:

  • the whole procedure is stopped and the employees threatened with redundancy continue to work normally, if it is decided in the consultations to prevent the redundancies; or
  • the collective redundancies are carried out after a period of over 10 days has elapsed from the date the relevant minutes were submitted to the Prefect or to the Minister of Labour, if the outcome of the consultations is negative.

In the event that no agreement is reached between the sides, the Prefect or the Minister of Labour may, upon request from one of the contracting parties (workers’ representatives or employer), either extend the consultation period for a further 20 days or withhold approval for all or some of the intended redundancies - such approval is required. In this situation, the employer must comply with the decision of the Prefect or the Minister of Labour. However, if no relevant decision is issued within the prescribed deadlines, then the collective redundancies agreed upon during the consultation procedure shall be carried out.

Even in the event that the collective redundancies are carried out, employees are entitled to seek to have their dismissals declared invalid for other reasons, such as violation of the protective legislation regarding the dismissal of trade union officials (Law 1264/1982), women in breach of the relevant legislation protecting maternity (Law 1483/1984), workers on leave etc. However, many of the protective provisions regarding the validity of the dismissal of certain individuals and the applicability of the collective redundancies procedure cease to have effect when an undertaking ceases operations.

Redundancy payments

Please outline the statutory rules on compensation for employees affected by collective redundancies, in the form of minimum notice periods, redundancy pay, severance pay etc - ie what is the level of payment, how does it vary with age, service etc. Where collective agreements add to or improve on these statutory provisions, please provide a brief overview of such additional payments (with examples). Overall, please provide any figures or estimates which may be available on the 'average' or 'typical' level of redundancy pay per employee. Where company practice and/or collective agreements provide for accompanying measures (ie set up an recruitment agency, retraining schemes with employer’s contribution, etc) please give an overview of such schemes.

The regulations regarding workers’ compensation are the same in the case of collective and of individual dismissals. The amount of severance pay varies according to the manner of calculation and according to whether the dismissed workers are white-collar or blue-collar workers. By and large, the amount of compensation due to white-collar workers is higher than the amount due to blue-collar workers. Furthermore, only white-collar staff must be notified of dismissals in advance. It should be noted that an employer is obliged to pay compensation only when an employee has been working for the company for a period of over two months from the date of recruitment.

Tables 1 and 2 below summarise the conditions governing the dismissal of white- and blue-collar workers with regard to the amount of compensation, the level of seniority in the company and the length of advance notice required for white-collar staff.

Table 1. White-collar workers’ severance pay and notice periods
Length of service with the same employer Compensation (in months' pay) Advance notice
From 2 months to 1 year 1 month 1 month
From 1 year to 4 years 2 months 2 months
From 4 years to 6 years 3 months 3 months
From 6 to 8 years 4 months 4 months
From 8 to 10 years 5 months 5 months
From 10 to 11 years 6 months 6 months
From 11 to 12 years 7 months 7 months
From 12 to 13 years 8 months 8 months
Rising to: . .
28 years or more 24 months 24 months
Table 2. Blue-collar workers’ severance pay
Length of service with the same employer Compensation ( in days' pay)
From 2 months to 1 year 5 days
From 1 year to 2 years 7 days
From 2 years to 5 years 15 days
From 5 to 10 years 30 days
From 15 to 20 years 90 days
20 years or more 105 days

With regard to special measures taken to reduce the number of collective redundancies or alleviate their consequences through social partner initiatives ('social plans'), such initiatives are extremely limited in scope in Greece. One example is the recent cessation of operations at Schiesser-Pallas, a Greek subsidiary of the German-based clothing multinational Schiesser AG, which was not accompanied by a full plan for redeployment of the workers who were made redundant (GR0306105F). The only advantage the 500 or so redundant workers were able to achieve after repeated industrial action was the ability to be included in a six-month subsidised training programme during the first half of 2004, following agreement with the Labour Force Employment Organisation (OAED). Nevertheless consultations with Ministry of Labour officials are continuing regarding the implementation of a broader package for support and integration in the labour market.

Redundancy levels

Where this is possible, please give statistics on the number of collective redundancies effected in your country each year from 1990 to 2003 (or the latest year for which data are available). If available, please break down by sector, and the jobs, age and gender of the workers affected. Also, please provide any information on the grounds for collective redundancies - eg company restructuring, closure or transfer/relocation. In response to this question, please give an assessment of trends and developments, even where full statistical information is not available.

A study by the National Labour Institute (NIL) covering the period between 1990 and 1998 found that the administrative system was not able to intervene effectively in redundancies or satisfactorily to monitor developments in the labour market. For example, the study pointed to a lack of relevant statistical records and of analysis of data from the cases of collective redundancies dealt with by the central authorities of the Ministry of Labour and the corresponding authorities of the Labour Inspectorate at regional level (GR9904122F). In addition, the study found that the available data indicated the failure in most cases of the competent mechanisms and procedures to prevent the initially planned redundancies from occurring.

Based on the findings of this study, it would appear that in the last 10 years collective redundancies have occurred in practically all sectors of production and services, with the exception of the banking sector, where the isolated, limited instances of collective redundancies (eg at the Agricultural Bank and Hellenic Industrial Development Bank) were accompanied by early retirement incentives. A feature of collective redundancies is that they are to be found both in dynamic, emergent industries and services, such as catering and food and beverages (GR0003165N), as well as in declining labour-intensive traditional industries, such as clothing and paper (GR0306101N).

In addition, a significant portion of the collective redundancies that have taken place since 1990 are associated with undertakings which gradually came under government control due to structural problems. These include various ailing enterprises such as the Syros, Elefsina and Skaramangas shipyards. With regard to the job categories affected by collective redundancies, it seems that the decline of the sector in which workers are employed and the particular economic and technical problems of the company employing them are most likely to be the basic causes of their being included in collective redundancy procedures. Thus it does not follow that their degree of skill or job category is associated with their likelihood of being included in such procedures. The same is true of the gender, marital status, and length of service and age of the redundant workers. Although the available statistics are insufficient to describe trends in collective dismissals in Greece precisely, it is worth noting that 2003 has been marked by a cluster of company shutdowns - as at Schiesser-Pallas, Yvonne Stores, Hippocampus and TVX.

Debate

Please summarise any current debate on the issue of collective redundancies in your country. For example, is this an important topic for trade unions and employers’ organisations and in collective bargaining? Has there been any recent new legislation or proposed legislation on the subject, or the prospect of new legislation - eg to implement EU legislation such as Directive 2002/14/EC on national information and consultation rules (EU0204207F), which requires 'information and consultation on the situation, structure and probable development of employment within the undertaking or establishment and on any anticipatory measures envisaged, in particular where there is a threat to employment'? Has there been any debate on the cost met by the government as a consequence of collective redundancies (ie what is the cost associated with unemployment benefits, training schemes funded by the government etc).

The amendment of the provisions of Law 1387/1983 in 2000, particularly those setting limits for defining collective redundancies, along with the recent wave of job losses in the first half of 2003, have rekindled interest in the issue. The 2000 amendment 'rationalised' the thresholds for the definitions of collective redundancies by raising the limit in enterprises employing 50-200 workers. These changes were satisfactory to the employer side, which places particular importance on the redundancies procedure. In the opinion of the Federation of Greek Industries (SEV), white-collar workers’ severance pay should be reduced to the levels applying to blue-collar workers and the requirement for government approval of collective redundancies should be abolished (GR9708124N).

By contrast, the trade unions saw the process of 'rationalising' the limit for defining collective redundancies as making it more difficult to save jobs, particularly in sectors in the process of restructuring production, which react passively to competition. At the same time, the unions think that measures need to be taken relating to redundancies and/or adverse changes in terms and conditions of employment in the event of company mergers and takeovers (TN0102401S).

Collective redundancies in Greece have been a major arena of confrontation between trade unions and management. Commentators state that employers frequently resort to practices whereby the relevant provisions are not applied to redundancies. For their part, unions often put forward arguments about the legality of planned redundancies and resort to the supreme executive authority of the Ministry of Labour. In this context, the forthcoming transposition of the EU information and consultation Directive or the introduction of other provisions may further enrich the discussion on collective redundancies. (Lefteris Kretsos, INE-GSEE/ADEDY)

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment