Greece: Latest working life developments – Q2 2017

Political action around the financial assistance programme, new legislation on collective bargaining, the decision to open shops on Sunday and a pilot programme on combating undeclared work are the main topics of interest in this article. This country update reports on the latest developments in working life in Greece in the second quarter of 2017.

Political background

Throughout the second quarter of 2017, political developments have focussed almost exclusively on continuing negotiations between the government and the institutions: International Monetary Fund (IMF), European Union, European Central Bank and (ECB) and European Stability Mechanism (ESM). Their aim has been to finalise the second assessment of the financial assistance programme, and to disburse the third tranche of €8.5 billion.

Agreement on the assessment, the tranche and the debt was finally reached at the meeting of the Eurogroup on 15 June 2017 (PDF), and only after passing Law 4472/2017 (19 May 2017), which contained all the measures agreed in the staff-level agreement. The law ensures a primary surplus of funds (by cutting pensions from 1 January 2019 and by reducing the tax-free threshold from 1 January 2020), while at the same time proceeding to the adoption of actions in a number of areas, including the labour market.

New labour market legislation

The passing of Law 4472/2017 included a series of regulations concerning the labour market, the most important of which are:

Collective bargaining: suspension of the favourability principle and the obligatory extension of collective agreements (sectoral and national, introduced in Law 4024/2011) will apply only after the end of the current programme, but without a specific end date.

Collective redundancies: Administrative/political approval for collective redundancies by the Minister of Labour has been abolished. This was the ministerial veto for which there were three criteria for either extending negotiations or not approving collective redundancies in whole or in part:

  • labour market conditions;
  • the state of the enterprise;
  • the interests of the economy.

Under the new law, the body responsible for collective redundancies is the Supreme Council of Labour (ASE) with equal tripartite representation. The ASE establishes whether the employer has met only the typical obligations to inform and consult with employees’ representatives. The employer is also not obliged to implement a social protection plan for those made redundant, which is at his discretion.

Right to strike: Under the new law, where not all employees participate in strike action, the employer may refuse to allow non-strikers to work (and is not obliged pay their wages) on the grounds that the enterprise would be operating at a loss.

Sunday working

Law 4472/2017 extends the right to open shops on Sundays (currently eight times per year), regardless of size, from May to October (32 Sundays) in five specific regions of ‘tourist interest’. The justification for this new legislation is that it serves the tourism industry.

At the beginning of the year, the Supreme Administrative Court ruled that a previous Ministerial Decision of 2014 (100/2017), which allowed a pilot project whereby shops were allowed to open every Sunday of the year in three regions of the country, was deemed unconstitutional. The judgment records the constitutional rights of workers and citizens to keep Sunday as a non-working day.

Undeclared work

On 27 April 2017, the Ministry of Labour presented the pilot programme on combating undeclared work, including the roadmap ratified at the tripartite level on 26 October 2016. In this context, targeted inspections will be carried out on enterprises in sectors with high rates of illegal activity. For the first time, four monitoring mechanisms will work together: the Labour Inspectorate, the newly established Single Social Security Institution (EFKA), the Economic Crisis Enforcement Agency (SDOE) and the Financial Police department. Also, under a legislative provision, there will be a new tripartite body to combat undeclared work.

Commentary

The supplementary memorandum of May 2017 between the government and the institutions introduced new legislation in the labour relations system. This is a small step forward in easing the collective dismissals procedure, in extending shop opening hours and in reviewing the right to strike.

There was little social dialogue on the new legislation except for the usual public hearing for the social partners in parliament. Trade unions – the General Confederation of Greek Workers (GSEE) and the Civil Servants' Confederation (ADEDY) – were strongly opposed to the overall measures and organised a general strike for 17 May 2017. Among the employers, the National Confederation of Hellenic Commerce (ESEE) and the Hellenic Confederation of Professionals, Craftsmen and Merchants (GSEVEE) were also opposed to the new legislation, and the GSEVEE participated in the general strike. Also, shortly after the passing of the law, the Hellenic Federation of Enterprises (SEV) asked for a new round of social dialogue for reforming the trade union law.

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