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The second evaluation of Greece’s current financial support programme (Third Memorandum) was completed in May 2017 with the introduction of new legislation affecting pensions, taxes, collective redundancies, collective bargaining and collective agreements, strike action and Sunday opening. Unions and employer associations expressed their opposition to the new measures.
Law No. 4472/17 implemented the agreement, between the Greek government and its lenders, to finalise the second assessment of the country's fiscal adjustment programme by the four ‘Institutions’ – the International Monetary Fund (IMF), the EU, the European Central Bank (ECB) and the European Stability Mechanism (ESM). This law, together with Law No. 4475/17, contains a series of regulations regarding changes in the labour market.
Pensions will be cut from 1 January 2019 to reduce pension expenditure by €2.13 billion for the year. This means cuts of up to 18% in state pensions will affect around 1 million pensioners.
From 1 January 2020, taxes of employees and pensioners will be increased by up to €650 per year.
The collective dismissals procedure was simplified by abolishing the need for administrative/political approval of collective redundancies by the Minister of Labour. The ministerial veto previously had three wider criteria for either extending negotiations, or not approving collective redundancies in whole or in part:
Under the new law, the body responsible for collective redundancies is the Supreme Council of Labour (SCL) and its Department for the Control of Collective Redundancies, with equal tripartite representation of the state, employees and employers. The new body has the power to ascertain whether the employer has complied with the obligations to inform and consult employees’ representatives and to communicate the relevant documentation. Even if the employer does not comply with these obligations, collective redundancies can be made 60 days after the minutes of the consultation have been sent to the SCL, and 90 days after the invitation to enter into consultation (the consultation period is 30 days). Finally, the employer is not obliged to implement a social protection plan for those made redundant; this is at the employer’s discretion.
The law stipulates that the suspension of the favourability principle and the obligatory extension of sectoral collective agreements (introduced in Law No. 4024/11) will apply until the end of the economic adjustment programme (Article 5 of Law No. 4475/17), and not at the end of the current programme on a specific date (as laid down in the initial Law No. 4472/17). As yet, no specific end-date has been set for the freezing of the above principles.
Law No. 1264/82 prohibits lockouts, where employers exclude employees from their place of work until certain terms are agreed. With the new law, a lockout is still prohibited, but it allows the employer – in the case of strike action in which not all employees participate – to refuse to accept (after a rapid court process), the work of non-strikers and therefore not pay their wages.
The list of reasons for which elected trade union representatives can be dismissed now includes:
The new law sets out in a single article all the existing legislation for trade union leave in the private and the public sector.
Law No. 4472/2017 extends the right of shops to open on Sundays from May to October each year (32 Sundays), in regions specified for ‘touristic reasons’:
This legislative intervention is at odds with the recent decision (Law No. 100/17) of the Supreme Administrative Court, which recognised that Sunday as a day off is ‘a constitutional, inviolable and irreplaceable right of professionals and employees, associated not only with the need to rest, but with the preservation and development of their personality and the possibility of organising their personal and family life overall’.
The new measures provoked strong reactions from employees, pensioners, small businesses and freelancers. The government introduced the new measures in agreement with the four institutions, while the social partners participated in only the public hearing held in parliament – just before the passing of the law.
The General Confederation of Greek Workers (GSEE) and the Civil Servants' Confederation (ADEDY) expressed their total opposition to all the new measures of Law No. 4472/17 (such as labour market changes, pension cuts and tax reform) and organised a day of national strikes on 17 May, which attracted large-scale participation.
Employer organisations for small and medium-sized enterprises (SMEs) – the National Confederation of Hellenic Commerce (ESEE) and Hellenic Confederation of Professionals, Craftsmen and Merchants (GSEVEE) – also expressed their disagreement with the new measures, (mainly the cuts in pensions and tax increases) arguing that none of them provided a way out of the crisis, while GSEVEE also participated in the national strike.
During this period, pensioners in the private and public sectors also held major protests against cuts, demanding decent pensions and better healthcare.
On 3 May, a joint press conference was held by ESEE and GSEVEE and the Federation of Private Employees (OIYE) protesting against the extension of Sunday trading. The organisations claimed that the current level of Sunday trading (eight times per year), has contributed neither to the development efforts of the country nor to the creation of new jobs. They also pointed out that any attempt to liberalise Sunday trading will be unconstitutional, according to the recent decision of the Supreme Administrative Court.
Changes in labour legislation resulting from negotiations between the government and the lenders are mandatory conditions for the implementation of the support programme. Nevertheless, they were not based on social dialogue and in many cases were also at odds with the positions of most of the social partners. The new measures have seemed to create an even less favourable environment for employees and their rights, while there is no evidence as yet that the labour market has been consolidated and rationalised by the results.