Greece: Latest working life developments Q3 2018

The reinstatement of sectoral collective bargaining extensions, new procedures for imposing financial sanctions on employers with undeclared workers, the recognition of a new national social partner, and a new national minimum wage are the main topics of interest in this article. This country update reports on the latest developments in working life in Greece in the third quarter of 2018.

Sectoral collective bargaining receives a boost

In August 2018, the extension of sectoral collective agreements and the favourability principle (where the most favourable arrangement for a worker applies when an individual contract of employment exists alongside more collective labour agreements) were reinstated. From then until the end of September, seven existing national sectoral collective agreements were declared compulsory for all banks, hotels, travel agencies and shipping employers/companies. Two local collective agreements were also declared compulsory for hotels in Chania and Lasithi in Crete. According to the Ministry of Labour, Social Insurance and Social Solidarity these agreements cover about 185,000 employees.

The extension mechanism and the favourability principle have existed since 1990, but were suspended in 2011. When they were re-established in 2017, the end of the suspension period was set to coincide with the official end of the Third Economic Adjustment Programme for Greece (20 August 2018).

Fighting the exploitation of undeclared workers

As part of the implementation of the ‘Roadmap for combating undeclared work 2017–2020’, the Ministry of Labour, Social Insurance and Social Solidarity passed new legislation to tackle undeclared work on 18 July (Law 4554). The legislation detailed conditions for the implementation of financial sanctions for employers who are discovered to have undeclared workers.

A ministerial decision of 9 August set out the procedures for imposing these financial sanctions. Employers in this situation will be required to pay back-dated social security for three months for each undeclared worker and will be subject to a €10,500 fine per worker, with the fine reduced if they offer these workers a full-time contract. The fine reduction is annulled if the employer does not retain the same number of employees or changes the terms of employment of the existing staff. If the employer repeats the infringement within three years of the initial inspection, the fine per undeclared worker increases by 100% on the first occasion and by 200% for each subsequent infringement.

Contacted and subcontracted employees receive protection

Law 4554 also includes additional provisions designed to protect employees in cases of contracting and subcontracting. These changes establish that the contracting entity and the contractor (or the contractor and subcontractor) are jointly responsible for paying salaries and safeguarding labour law, and include provisions for the relevant procedures and sanctions. This law does not apply to the public sector.

All four national employer organisations reacted negatively to this specific law provision, while the Economic and Social Council of Greece (OKE) proposed to review the provision and engage in more substantive social dialogue on the issue.

SVVE recognised as new social partner

A new employer organisation, the Federation of Industries of Northern Greece (SVVE), was recognised as a new and equal national social partner with article 41 of Law 4554. This recognition increases the number of social partners from four to five, and changes the composition of every committee or forum in which the social partners participate (six members: one employee organisation representative and five employer organisation representatives).

The five existing social partners, including trade unions, announced that they strongly disagreed with the recognition of the SVVE, as they felt the decision had taken place without sufficient consultation. The General Confederation of Greek Workers (GSEE) argued that recognising the SVVE as a national social partner upgrades a regional employer organisation for Northern Greece to a central social negotiator. The GSEE also claimed that the SVVE does not meet the criteria required by the legislation of large-scale coverage and representation.

National minimum wage fast-tracked

In September 2018, the government passed a one-off amendment to Law 4172/2013 regarding the process and timetable of setting a national minimum wage. While the normal procedure would involve a six-month consultation period starting in February, the government chose to launch the process in September with a view to introducing a new minimum wage after January 2019 (following a series of consultations with social partners and other institutions).

Commentary

With the Third Economic Adjustment Programme for Greece ending on 20 August, the third quarter of 2018 saw the government abolish a number of major reforms to the labour market that were implemented as part of measures to tackle the economic crisis. The government also committed to creating a more protective environment for workers by proposing certain changes to the labour relations system.

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