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Collective Bargaining

Collective bargaining takes place at national, industry and company level, and in the past the national agreement, normally negotiated every two years, provided a basis from which improvements could be negotiated. However, changes introduced following the 2010 crisis and the provision of IMF and EU financial support, have fundamentally altered the bargaining structure.

The framework

The main levels of collective bargaining in Greece have been: national level, covering the whole economy; industry/occupation level, covering specific industrial sectors or specific occupations; and company level. Until 2010, the framework for negotiations was provided by legislation passed in 1990, which introduced free collective bargaining in which conciliation, mediation and arbitration through the official organisation for mediation and arbitration OMED played an important role.1

Under this structure, national level bargaining produced a national collective agreement, known under its Greek initials as the EGSSE, which set the national minimum wage, as well as dealing with other broader issues like training or teleworking. Bargaining at industry or occupational level built on this basis to provide better pay and conditions for individual groups of workers. A study undertaken at OMED shows that there were around 100 industry level and 90 occupational level agreements, covering groups such as employees in the chemical industry or the hospitality industry (industry agreements) or those working as graduate designers or musicians and performers (occupational agreements).2 Below this, company-level agreements could produce further improvements for employees of particular companies.

However, this structure has been fundamentally changed by the legislation introduced since the start of the crisis, which almost overwhelmed the Greek economy and led to the IMF and EU financial bail-out in May 2010. All levels of bargaining have been affected as the government sought, through wave after wave of legislation, to meet the conditions imposed by the troika (the International Monetary Fund, European Commission and European Central Bank) in return for financial support.



At national level, the national collective agreement has much less importance than it had in the past. Legislation passed in November 2012 (Law 4093/2012) removed its role in setting the national minimum wage. This is now set by the government after consultation with employers and unions. Already in February 2012, under Law 4046/2012, the government had cut the level of the minimum wage agreed in the existing national collective agreement by 22% (32% for those under 25). The minimum wage is to be frozen at this lower level until at least the end of 2016 (although the SYRIZA-led government elected in January 2015 has promised to reverse this and other changes – see below). More generally, under the November 2012 legislation, the terms of the national collective agreement relating to pay will in future only apply to those employers who are members of employers’ associations belonging to the national employers’ associations signing the agreement – previously they applied across the whole of the private sector. Only terms relating to issues other than pay will continue to apply across the private sector. The most recent national collective agreement, signed on 26 March for the period 1 January to 31 December 2014, reflects this reduced status. It is largely limited to confirming that the existing arrangements covering issues such as overtime and leave will continue to apply.



The impact of industry and occupational level agreements has also been much reduced, while that of company agreements has been enhanced. Legislation passed in October 2011 (Law 4024/2011) permits company level agreements to set terms and conditions that are worse than those applying in the industry or occupational level which they cover, at least until the end of 2015. Where workers are covered by both industry/occupational agreements and company agreements, the company agreement takes precedence, even if the terms it sets are less favourable. The only downward limit on company agreements (other than legal requirements) is that they must at least match the terms and conditions set in the national collective agreement, in as far as they still apply. The October 2011 legislation follows previous legislation (Law 3899/2010), which allowed companies to sign agreements setting worse terms than in industry or occupational agreements, but only in companies facing financial difficulties.3



In addition, the October 2011 legislation introduced another significant change, allowing groups of employees, known as “associations of persons”, to sign agreements in companies without a union (see below).



These changes have produced a massive shift away from industry and occupational agreements to company-level deals, as shown by the figures of collective agreements registered with the ministry of labour.



Between 2010 and 2013, the number of industry-level or occupational-level agreements covering the whole country has fallen from 65 to 14, while the number of company agreements has increased from 227 to 409 (after reaching a peak of 976 in 2012). There are also a small number of local occupational agreements and their number has also fallen from 14 to 10 over the same period. The figures for the first six months of 2014 show this trend continuing with only six industry and occupational agreements being signed, compared to 188 company-level deals and three local occupational agreements.4 Analysis of the 976 company-level agreements signed in 2012 found that almost three-quarters (72.6%) had been concluded by non-trade union “associations of persons”, 17.4% by company-level union bodies and 10.0% by higher union bodies.5 The same analysis also showed that, where company agreements had been signed by “associations of persons”, in two-thirds of cases they had cut pay to the new national minimum wage – in other words, 22% lower than the previous rate.



The decentralisation of bargaining shown by these figures has not been the only change in the framework of collective bargaining in Greece. Law 4046/2012 introduced changes to the length of time that collective agreements can last, as well as the period their terms continue to have effect after the agreement itself has expired (see below). It froze all incremental or other types of automatic increases within existing agreements for the foreseeable future (until unemployment falls below 10%.) It also changed the circumstances under which unions and employers can access arbitration from the official mediation and arbitration body (OMED). Now both sides must agree before the process can be used. This follows earlier legislation (Law 3871/2010), which limited the wage increases which could be awarded as a result of arbitration.



In addition, the October 2011 legislation (Law 4024/2011) also removed, at least until the end of 2015, the right of the minister of labour to extend industry and occupational agreements to employers who were not members of the employers association which signed them. This power had previously been widely used. Companies can also opt out of their employers’ association if they are unhappy with the agreements signed.



It is increasingly clear that these fundamental changes in the Greek system of industrial relations are affecting the coverage of collective bargaining in the country, and it seems likely that it is falling sharply, particularly as agreements expire and are not replaces (see below). In the past the unions estimated that 85% of employees were covered by agreements other than the national EGSSE agreement, although other academic estimates were lower at around 65-70%.6 Before the crisis, a figure of 65% seemed reasonable.6 Now the figure is likely to be much lower and one expert estimates that the current figure may be as low as 10%.



The Greek government led by the left-wing SYRIZA party, elected in 2015, has promised action to reverse many of these changes, with the intention of reviving collective bargaining. Specifically, on 28 January, the new labour minister told the parliament the government would: restore priority to industry-level rather than company-level collective agreements; allow industry-level agreements again to be extended to all the companies in that industry; ensure that collective agreements continue to be valid, even when the period they were signed for has ended without replacement; and allow unions to access the arbitration and mediation service OMED.



In addition the government said that it planned to end the 22% cut in the minimum wage introduced in 2012.



It remains to be seen how quickly legislation to implement these measures can be introduced.



There is an economic and social council in Greece (OKE), which consists of an employers’ and employees’ group (from the union confederations GSEE and ADEDY), as well as a group representing other interests, such as the professions, agriculture and the disabled. Its role in the crisis has been limited, as governments have frequently acted without consulting unions or employers.7


Who negotiates and when?

Collective bargaining, in most cases, takes place between employers’ federations or individual employers on one side and the unions on the other. The national level EGSSE agreement is signed on the union side by GSEE, although this no longer sets the minimum wage (see below).

As stated above, the legislation on who is entitled to bargaining and the hierarchy of agreements has been changed, introducing much greater flexibility at company level. One change is that, in certain circumstances, groups of employees, rather than unions, can sign company-level agreements. Under Law 4024/2011 these “associations of persons” can sign company level collective agreements, provided that 60% of the employees belong to them. They also take precedence over a union outside the company.8 The evidence shows that “associations of persons” have signed the majority of company-level agreements from 2012 onwards, and that, in 2012 at least, most resulted in wage cuts.9

In the past, agreements normally lasted for a year, although longer agreements of two years or more were also possible and there were no fixed limits. However, Law 4046/2012 changed this, setting a minimum length of one year and a maximum of three. Potentially more significant, this legislation also reduced the length of time that the terms of collective agreements apply after the agreements themselves expire from six months to three months. In addition, whereas in the past the individual terms remained in force until new arrangements were agreed, under Law 4046/2012 most of the individual terms cease to apply after three months. Individuals are only entitled to their basic pay, payments linked to service and allowances related to dependent children, education and hazardous work. Other benefits, such as bonuses or responsibility payments, are lost.10



National agreements used to last two years, but the agreement signed in 2010 ran for three years and the agreements signed in 2013 and 2014 were both for 12 months.

The subject of the negotiations

Negotiations can cover a wide range of topics, including issues like training or works regulations.

Greece has a national minimum wage. This used to be fixed by agreement between the unions and the employers at national level. However, this has changed as a result of the crisis. It will in future be set by the government rather than through negotiation, although employers and unions will be consulted.11

L. Fulton (2015) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.