Greece: Latest working life developments – Q1 2017
Continuing negotiations with the Troika on the Greek labour market and pensions system, the conclusion of a national collective employment agreement and a judgement on human trafficking are the main topics of interest in this article. This country update reports on the latest developments in working life in Greece in the first quarter of 2017.
Negotiations continue between government and lenders
Throughout the first quarter of 2017, negotiations continued between the Greek government and the Troika (the European Commission, the European Central Bank and the International Monetary Fund), but without agreement being reached. The content and the course of the negotiations have not formally been revealed, but the statements of officials and reports in the media suggest that the discussions focused on cutting pensions, reducing the tax-free threshold and denationalisation.
Cutting pensions: The Troika is apparently seeking to cut the main pensions of more than one million people, which are over €600–€700, by up to 30% from 1 January 2019. This would save the State budget €1.8 billion. However, the Greek government wants to introduce the cuts in at least two phases, with the first on 1 January 2019 and the second on 1 January 2020.
Reducing the tax-free threshold: The tax-free threshold is currently €8,636, rising to €9,545 for a family with children. The IMF is reportedly insisting on cutting this threshold to €5,000, with the government wanting it set at no less than €6,000. Even so, the government’s suggestion would mean taxpayers losing €600 with the government saving €1.5 billion.
Denationalisation: One of the main issues said to have been raised by the Troika is the proposal to sell 17% of the share capital of the Public Power Corporation and 65% of the share capital of the Public Gas Corporation, which currently belong to the Hellenic Republic Asset Development Fund.
Signing of the 2017 collective agreement
In March, social partners representing employers and employees in the country’s private sector signed a new National General Collective Employment Agreement (EGSSE) effective as of 1 January 2017 and lasting one year.
The EGSSE is renewed every one or two years following collective bargaining between:
- General Confederation of Greek Workers (GSEE), which represents private-sector employees
- Hellenic Federation of Enterprises (SEV)
- Hellenic Confederation of Professionals, Craftsmen and Merchants (GSEVEE)
- National Confederation of Greek Trade (ESEE)
- Association of Greek Tourist Enterprises (SETE).
The role of the EGSSE was diminished following the country’s admission to the European Stability Mechanism and the passing of Law 4093/2012. The EGSSE no longer has the power to set the national minimum wage, which is now set unilaterally by the government, based on economic forecasts. However, in the 2017 agreement, the parties agreed that they will jointly re-set the minimum wage if there is a change in the law.
The social partners agreed several other major points.
- They agreed to cooperate under the aegis of the Ministry of Labour to combat undeclared work, building on ILO proposals in the 2016 Diagnostic report on undeclared work in Greece (PDF).
- They declared their intention to adopt new measures to combat racism and discrimination in the workplace.
- They approved the text of the National Strategy on Health and Safety at Work from the Hellenic Institute for Health and Safety at Work (ELINYAE) and agreed to submit it jointly to the government for adoption.
Human rights judgement on forced labour in Manolada strawberry fields
The government was severely criticised for failing to prevent human trafficking by the European Court of Human Rights (ECHR) in a judgement on 30 March 2017. In April 2013, foremen at the farm near the village of Manolada shot at 42 Bangladeshi strawberry pickers (who had no permits) when they claimed unpaid wages. The ECHR unanimously held that there had been a violation of Article 4.2 of the European Convention on Human Rights prohibiting forced labour. It found that the applicants’ situation was one of human trafficking and forced labour, given that exploitation through labour is ‘one aspect of trafficking’. The Court found that the State had not only failed in its obligations to prevent human trafficking, but also in its duty to protect the victims, to conduct an effective investigation into the offences committed and to punish those responsible.