Greece: Tripartite social dialogue to combat undeclared work
Although official statistics show that undeclared work in Greece is falling, social partners and the Labour Inspectorate fear that the full extent of illegal work is not being accurately measured. They feel this is a threat to the sustainability of the social security system and are calling for the inspectorate to be strengthened.
Draft bill discussions
The Secretary of the Labour Inspectorate (SEPE) and the social partners met several times in the second quarter of 2015 to discuss the problem of undeclared work. In an interview on 18 May 2015, the Secretary said the overall decrease in undeclared work recorded in official statistics was largely due to the introduction of high fines, which are under review. However, other forms of illegal work, such as pseudo self-employment and partially declared employment are still a problem, which means that the extent of undeclared work in Greece is not being accurately recorded. This threatens the sustainability of the social security system and means that the concept of uninsured labour ought to be redefined. The competence of the Labour Inspectorate also needs to be strengthened.
In April 2015, the inspectorate met with all the national social partners, representing both employers and unions, to discuss how the inspectorate’s methods could be improved. A draft bill based on the meeting is being drawn up by the government. It will include proposals to reorganise and strengthen the inspectorate and was expected to become law during autumn 2015.
Nonetheless, the initiative was postponed after a new third loan agreement was signed on 12 July 2015 between Greece and its creditors – the European Commission, the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Stability Mechanism (ESM). The agreement foresees that the new draft bill will be introduced only after new consultations and negotiations take place between the Greek government and the four institutions.
The government also agreed to launch by October 2015 a consultation process led by a group of independent experts to look at a number of existing labour market frameworks, such as collective dismissal, industrial action and collective bargaining, taking into account best practices internationally and in Europe.
At a press conference held by the Ministry of Labour on 18 May 2015, an action plan was announced to combat:
- illegal work;
- evasion of taxes and social contributions;
- uninsured and undeclared labour.
One important initiative was the establishment of a permanent tripartite committee to monitor and combat illegal work. The committee included representatives from the social partners and from a committee of experts.
What the data show
According to the Ministry of Labour's Artemis database (in Greek), checks by labour inspectors showed that companies using undeclared work increased to almost 16.5% in February 2015, from 14.4% in January. Over the two months, inspections were carried out in a total of 4,638 companies with a total of 18,020 employees. They found 1,367 uninsured employees and the companies were fined a total of €14.4 million.
In September 2013, a fine of €10,550 per undeclared worker was introduced. According to a report on combating undeclared work, during an audit period carried out from September 2013 to February 2015, a total of 38,788 company inspections have been carried out across all sectors of activity. Some 5,129 companies were found to have employed undeclared workers (13.2%), and of 193,198 employees, 8,450 (4.4%) were found to be undeclared. Fines imposed on companies amounted to around €88.2 million, although the inspectorate reports that only 20% of the fines have so far been collected.