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Collective Bargaining

Collective bargaining takes place at national, industry and company level, and in the past the national agreement 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, although some of the crisis measures were reversed in 2018.

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 was fundamentally changed by the legislation introduced during the crisis, which almost overwhelmed the Greek economy and led to the initial IMF and EU financial bail-out in May 2010. All levels of bargaining were affected as governments sought, through wave after wave of legislation, to meet the conditions set out in three separate economic adjustment programmes which the EU and IMF imposed in return for financial support.

 

At national level, the national collective agreement (EGSSE) now 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 (see below}.  More generally, under the November 2012 legislation, the terms of the national collective agreement relating to pay 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 continue to have universal application across the private sector.

 

The 2018 national collective agreement, signed on 28 March 2018, 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, and that the parties will work together on policies to aid a fair transition to a low carbon economy. It also includes a commitment to set up a series of working groups, including one on collective bargaining.

 

The impact of industry and occupational level agreements has also been much reduced, although some of the changes have subsequently been reversed.

 

Legislation passed in October 2011 (Law 4024/2011) permitted company level agreements to set terms and conditions which were worse than those applying in the corresponding industry or occupational level agreements. This, together with other changes, produced a major shift away from industry and occupational agreements, as shown by the figures of collective agreements registered with the ministry of labour. There were 65 industry and occupational agreements in 2010, but this fell to 14 in 2018 (see table). Initially the number of company-level deals rocketed, reaching 976 in 2012, after the new legislation was introduced, but they subsequently fell away and returned to earlier levels, for example just 155 in 2018.

 

Number of collective agreements: 2010 to 2018

Year

Industry and occupational

Company

Local occupational

2010

65

227

14

2011

38

170

7

2012

23

976

6

2013

14

409

10

2014

14

286

5

2015

12

263

7

2016

10

318

6

2017

15

244

6

2018

14

155

3

Source: Συλλογικεσ Συμβασεισ Εργασιασ (Collective Labour Agreements) http://www.ypakp.gr/ (Accessed 31.07.2019)

 

However, these figures relate to a situation which has now changed because of new legislation (Law 4472/2017) passed in 2017.This stated that the previous principle under which employees would always benefit from the most favourable contract applying to them – in other words that company agreements could not set worse terms and conditions than those in the industry agreement – would again come into force at the end of economic adjustment programme.

 

As the economic adjustment programme ended on 20 August 2018, the favourability principle started to apply again on 21 August 2018. (The rules on the extension of collective agreements also changed at the same time – see below.) It is too early to judge the impact of the restoration of the favourability principle in August 2018 but it may mean an increase in the number of industry and occupational agreements.

 

This is not the only area where legislation introduced during the crisis has subsequently been reversed. In 2011, legislation (Law 4024/2011) removed 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. However, this also changed with the 2017 legislation referred to above (Law 4472/2017). As with the favourability principle, the right to extend collective agreements was restored at the end of the economic adjustment programme – that is from 21 August 2018 onwards.  

 

In order to be extended, an agreement must be signed by employers employing at least 51% of the workers in the industry concerned, with a largely government appointed body determining whether this threshold has been met. The request can be made by either the unions or the employers in the industry concerned but the decision is in the hands of the minister of labour.

 

The government extended four agreements in September 2018 and by the end of June 2019 13 agreements had been extended, including those covering the tobacco industry, shipping agency staff, banking, employees of foreign airlines, and hotel staff in a number of local areas, including Rhodes.

 

The changes described above (reducing the importance of the national agreement, ending the favourability principle and halting the extension of agreements) were not the only measures introduced during the crisis, which affected bargaining. The government also changed the law on who could bargain and how long agreements continued to be effective (see next section) and in both areas the measures introduced during the crisis continue to apply. However, legislation (Law 4046/2012) limiting access to the OMED arbitration service – requiring both sides to agree – was found to be unconstitutional in 2014, and each side still has a unilateral right to ask OMED to become involved.

 

There are no official figures on the proportion of employees covered by collective bargaining. But 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%.[3] Before the crisis, a figure of 65% seemed reasonable.[4] However, the fundamental changes in the Greek system of industrial relations during the crisis  sharply affected the coverage of collective bargaining in the country, particularly as agreements expired and were not replaced (see below). This led one expert to estimate that coverage in the private sector fell to as low as 10%.[5] Unions are present across the whole of the public sector, but pay has been set by the government rather than through collective bargaining.

 

Overall the ICTWSS database estimated bargaining coverage at 25.5% in 2016 but considered that this might be an overestimate because of overlapping agreements.

 

The impact on coverage of the reversal of some of the changes introduced during the crisis remains uncertain. However, it is likely that the reintroduction of the possibility of extending agreements will have the largest immediate numerical effect.

 

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 was limited, as governments frequently acted without consulting unions or employers.[6]

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. Each agreement is signed by the most representative union in the company or industry, defined as the union with the largest number of voting members. The national level EGSSE agreement is signed on the union side by GSEE, although this no longer sets the minimum wage (see below).

One of the changes introduced during the crisis was to allow groups of employees, rather than unions, to sign company-level agreements. Under Law 4024/2011 these “associations of persons” can sign company level collective agreements, irrespective of the size of the company, provided at least 60% of the employees belong to them, and there is no union in the company.  At the height of the crisis they played a major negotiating role. 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.[7] The same analysis also showed that they mostly led to lower wages. In two-thirds of cases where agreements were signed by “associations of persons”, pay was reduced to the new national minimum wage – in other words, following the cut in the value of the minimum wage, 22% lower than the previous rate.

 

It is unclear whether associations of persons are still playing such a prominent role, as the number of company agreements has fallen sharply.

 

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. Terms relating to basic pay, payments linked to service and allowances related to dependent children, education and hazardous work continue to apply after three months, but only as part of each individual’s contract of employment.   

 

National agreements used to last two years, but since 2013 they have been for a year (although the 2014 agreement was extended in 2015). In contrast to other agreements, the national agreement lasts for six months after its expiry date (Law 4320/2015).

 

The subject of the negotiations

 

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

 

Greece has a national minimum wage. This used to be fixed by agreement between the unions and the employers at national level. However, this changed as a result of the crisis. It is now set by the government rather than through negotiation, although, following changes to the legislation in 2018, there is a precise process for consulting employers and unions, as well as labour market and industrial relations experts.[8] The first national minimum wage under this new procedure was introduced on 1 February 2019, the first increase since 2012. The lower rate for the under-25s, which was introduced in 2012, was abolished at the same time.

 

[1] Trade Unions in Greece, Development, Structures and Prospects, Friedrich Ebert Foundation, Athens 1999, by Christos A Ioannou http://library.fes.de/fulltext/bueros/athen/00740toc.htm

[2] Ch. Ioannou, K. Papadimitriou. Collective bargaining in Greece in 2011 and 2012: Tendencies, disruption and prospects, 2013 (Organisation for Mediation and Arbitration – OMED). In Greek.

http://www.omed.gr/el/files/meleti2Iwannou.pdf

[3] The evolving structure of collective bargaining in Europe: Greece, Matina Yannakourou, 2005

[4] This is based on  an estimate  made  by Ioannou 2004 (Indicators Figures and Estimates on Greek Industrial Relations – Report for the project 'Quality industrial relations' (ZKB2327), HIVA - Work and Organisation Sector, Atrecht College, Catholic University of Leuven, March 2004) for the year 1996.  There has been no new estimate since.

[5] Collective bargaining decentralisation and wage adjustment for internal devaluation, by Christos A. Ioannou, in Greek Employment Relations in Crisis edited by Horen Voskeritsian, Panos Kapotas, Christina Niforou

[6] The Role and Impact of Economic and Social Councils and Similar Institutions (ESC‐Sis) in the Response to the Global, Financial, Economic and Jobs Crisis, Draft Working Document, ILO, December 2013

[7] Ch. Ioannou, K. Papadimitriou. Collective bargaining in Greece in 2011 and 2012: Tendencies, disruption and prospects, 2013 (Organisation for Mediation and Arbitration – OMED). In Greek.

http://www.omed.gr/el/files/meleti2Iwannou.pdf

[8] See Greece: Latest working life developments Q4 2018, Eurofound by Penny Georgiadou  https://www.eurofound.europa.eu/publications/article/2019/greece-latest-working-life-developments-q4-2018 (Accessed 01.08.2019)  

[9] Eurofound (2015), Third European Company Survey – Overview report: Workplace practices – Patterns, performance and well-being, Figures for Table 44

[10] Interpretation Circular 819/50, Ministry of Labour and Social security (in Greek),16 January 2012 http://www.ydmed.gov.gr/wp-content/uploads/20120216_rithmiseis_sillogikon_diapragmateuseon_tou_N4024.pdf

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.