Report in which the committee requests to be kept informed of development - Report No 365, November 2012

Case No 2820 (Greece) - Complaint date: 21-OCT-10 - Closed

Allegations: The complainants allege that numerous violations of trade union and collective bargaining rights have been imposed within the framework of austerity measures implemented in the context of the international loan mechanism of the Greek economy

1. 784. The complaints are contained in communications from the Greek General Confederation of Labour (GSEE) dated 21 October and 2 December 2010, 18 November 2011 and 16 July 2012. The Civil Servants’ Confederation (ADEDY), the General Federation of Employees of the National Electric Power Corporation (GENOP–DEI–KIE) and the Greek Federation of Private Employees (OIYE) associated themselves with the complaint and provided additional information in a communication dated 9 March 2011. The International Confederation of Trade Unions (ITUC) associated itself with the complaint in a communication dated 30 October 2010.
2. 785. The Government sent its observations in communications dated 16 May 2011 and 16 May 2012.
3. 786. Greece has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Labour Relations (Public Service) Convention, 1978 (No. 151), and the Collective Bargaining Convention, 1981 (No. 154).

A. The complainants’ allegations

1. 787. In its communication dated 21 October 2010, the GSEE alleges that the measures imposed within the framework of austerity measures implemented in the context of the international loan mechanism of the Greek economy have significantly affected workers’ fundamental right to free collective bargaining as well as the right to set uniformly binding minimum standards of decent work through national general collective agreements (NGCAs).
2. 788. In this regard, the GSEE refers to Law 3833/2010 on the “Protection of national economy – Emergency measures to tackle the fiscal crisis” which was adopted by the Greek Parliament on 5 March 2010. According to the GSEE, this Law, among other measures (i.e. the major reductions in the wages of all public employees), provides for:
   • (a) important reductions and cuts in the wages of all workers under private law contracts, employed in the public and broader public sector (central Government, municipalities, public companies, local governments, state agencies and other public institutions, except banks):
     • (i) by 7 per cent in regular wages, allowances, remuneration and payments in general that are already provided for by general or specific provisions of law, clause or provision of a collective agreement or arbitration award or an individual employment contract or agreement; and
     • (ii) by 30 per cent in the workers’ regular payments relating, under the law, to the annual leave and the Christmas and Easter period.
   • (b) the prohibition also for the abovementioned workers, from the entry into force of this Law until 31 December 2010, to exercise their right to free collective bargaining and to conclude collective agreements that could provide increases in their wages (article 3, paragraph 1).
3. 789. The GSEE also refers to Law 3845/2010, enacted as a framework instrument, which includes measures of direct implementation relating, among other things, to:
   • (a) permanent measures through which the State intervenes in the system of free collective bargaining and alters the existing mechanism for fixing through the NGCA the generally binding minimum wages and working conditions applicable to all workers on Greek territory with dependent work contracts under private law (article 2, paragraph 7);
   • (b) provisions that directly exclude or provide a basis for legal authorization to introduce measures that allow the exclusion of groups of workers, and particularly the most vulnerable such as young workers, from the scope of the NGCA and from the generally binding provisions on minimum wages and conditions of work that are in force (articles 2 and 9, paragraph 6, points (e) and (f));
   • (c) permanent measures (not related to the income policy of the year 2010), that impose further reductions as from 1 June 2010:
     • (i) by 3 per cent in the regular wages of all workers under private law contracts in the broader public sector and in public enterprises in breach of collective agreements already in force;
     • (ii) by eliminating the abovementioned workers’ regular payments relating to the annual leave and the Christmas and Easter period and replacing them with a very small flat amount;
     • (iii) provisions that serve as a basis for legal authorization to introduce additional measures that raise the minimum threshold for activating rules on collective dismissals and at the same time drastically reduce both the amount of severance pay and the notice periods; and
     • (iv) permanent measures that significantly cut pensions granted to pensioners of all principal social security funds.
4. 790. The complainant underlines that, by adopting and imposing the following permanent measures the Greek Government has failed to observe and fulfil the country’s international commitments. The complainant refers in this regard to the statutory restriction (abolition) of the system that hitherto set minimum wages and conditions of work (applied without discrimination to all workers employed in the Greek territory) through the NGCA and the withdrawal of the core labour law principle that the provisions of the other collective agreements (sectoral, professional, enterprise) cannot be less favourable than the minimum standards introduced at national level. Article 2 of Law 3845/2010, paragraph 7, provides:
   • 7. Professional and enterprise collective agreements’ clauses can (from now on) deviate from the relevant clauses of sectoral and general national agreements, as well as sectoral collective agreements’ clauses can deviate from the relevant clauses of national general collective agreements. All relevant details for the application of this provision can be defined by Ministerial Decision.
5. 791. The GSEE points out that freedom of association is further violated by the exception of young unemployed persons up to 24 years of age from the minimum standards of wages and conditions of work of the national agreement, who through “apprenticeship” contracts and extended probationary periods will be remunerated with 80 per cent of the minimum basic wage with relatively reduced social security contributions and protection, which is set out in article 2, paragraph 2, of Law 3845/2010.
6. 792. The following measures also are not in compliance with freedom of association principles: the abolition of the generally applicable and mandatory minimum wage provided for by the national agreement to both young workers up to 25 years of age entering the job market for the first time who are henceforth remunerated with 84 per cent of the minimum wage, but also for employed minors, who – through the right granted to employers to employ minors under “apprenticeship” contracts without any protection safeguards – are now remunerated with 70 per cent of the minimum wage, have their social security coverage reduced, while being excluded from the protective framework of the NGCA and the protective provisions of labour legislation (including permitted working hours, the start and end of working hours taking into account course schedules, obligatory periods of rest, obligatory paid annual leave, time off for attending school, studying, sick leave, etc.) (article 73, paragraphs 8 and 9, of Law 3863/2010).
7. 793. The GSEE alleges that these measures demonstrate a lack of due respect for and implementation of, as well as the intervention in, collective agreements in force that results from drastic reductions in wages (through permanent measures effected twice within six months) of workers under private law contracts in the wider public sector that is governed entirely by collective agreements, the negotiation and conclusion of which has been henceforth prohibited (articles 1, paragraph 1, and 3, paragraph 5, of Law 3833/2010, and articles 3, and 6, paragraph 4, of Law 3845/2010).
8. 794. The GSEE criticizes the commitment of the Government in the loan memorandum to further interfere in collective bargaining in the private sector:
   • In line with the lowering of public sector wages, private sector wages need to become more flexible to allow cost moderation for an extended period of time. Following consultation with social partners and within the framework of EU law, the government will reform the legal framework for wage bargaining in the private sector, including by eliminating asymmetry in arbitration. The government will adopt legislation for minimum entry level wages in order to promote employment creation for groups at risk such as the young and long-term unemployed.
9. 795. Further agreements and commitments in the original text of the “Memorandum of Understanding on Specific Economic Policy Conditionality” provide that:
   • by the end of the 2nd quarter of 2010 and in order to strengthen labour market institutions, Government starts discussions with social partners in order to revise private sector wage bargaining and contractual arrangements.
   • by the end of the 4th quarter of 2010 and in order to strengthen labour market institutions
     • ... Adopt legislation to reform wage bargaining system in the private sector, which should provide for a reduction in pay rates for overtime work and enhanced flexibility in the management of working time. Allow local territorial pacts to set wage growth below sectoral agreements and introduce variable pay to link wages to productivity performance at the firm level.
     • ... Adopt legislation on minimum wages to introduce sub-minima for groups at risk such as the young and long-term unemployed, and put measures in place to guarantee that current minimum wages remain fixed in nominal terms for three years.
     • ... Amend employment protection legislation to extend the probationary period for new jobs to one year, to reduce the overall level of severance pay and ensure that the same severance pay conditions apply to blue- and white-collar workers, to raise the minimum threshold for activation of rules on collective dismissals especially for larger companies, and to facilitate greater use of temporary contracts and part-time work.
10. 796. The GSEE recalls the reiteration of the commitments included in the Updated Memorandum of Economic and Financial Policies with regard to the Structural Reform Policies, as follows:
    • 20. Labor market reform is almost completed. Substantive legislative changes were introduced in July easing employment protection legislation and collective dismissals, reforming minimum wages, reducing overtime premia, and allowing firm-level agreements to prevail over other levels. Alongside reforms in public employment to reduce labor-market distortions, these will increase adjustment capacity of firms, ultimately boosting employment. Further measures will be taken to reform collective bargaining, including the elimination of the automatic extension of sectoral agreements to those not represented in the negotiations ... .
11. 797. This approach has been pursued in the memoranda so that, by the end of the third quarter of 2010 and in order to strengthen labour market institutions:
    • Following dialogue with social partners, Government adopts and implements legislation to reform wage bargaining system in the private sector, which should provide for a reduction in pay rates for overtime work and enhanced flexibility in the management of working time ... . Government ensures that firm level agreements take precedence over sectoral agreements which in turn take precedence over occupational agreements. Government removes the provision that allows the Ministry of Labour to extend all sectoral agreements to those not represented in negotiations ... . Government amends employment protection legislation to extend the probationary period for new jobs to one year, and to facilitate greater use of temporary contracts and part-time work.
12. 798. The GSEE emphasizes that, according to the national institutional framework in force for the last 20 years, the minimum standards of wages and working conditions are defined by the national collective agreements, which are concluded after free collective bargaining between the most representative employers’ organizations and the GSEE (that is the most representative unitary organization of all workers employed under private law contracts), while all other types of collective agreements (sectoral, enterprise, professional) cannot include provisions less favourable than those set at the national level. This ensures a very important and generally applicable safety net for all workers without discrimination.
13. 799. By adopting the abovementioned legislation, the State not only violates its statutory obligation to respect the collective agreements, but essentially intervenes with permanent provisions of law in the free collective bargaining system by setting the minimum wages and working conditions in terms less favourable than those provided for by the minimum provisions of the national agreement. This directly contradicts the Government’s obligation under Convention No. 98 “to encourage and promote” such a mechanism “with a view to regulating the terms and conditions of employment by means of collective agreements”, under Convention No. 154 to refrain from taking inappropriate or inadequate measures that prevent free collective bargaining and the conclusion of collective agreements and under Convention No. 87 “to take all necessary and appropriate measures to ensure” that the right to organize is freely exercised.
14. 800. The complainant recalls that Law 1876 on “Free Collective Bargaining” has been in force since 1990 and constitutes the legislative framework regulating free collective bargaining and the conclusion of collective agreements, in accordance with ILO core Conventions Nos 98 and 154.
15. 801. According to Law 1876/1990, collective agreements, through their scope and field of application, set the binding provisions for terms and conditions of work. The NGCA takes precedence over all statutory provisions for every category of collective agreement. According to the provisions of Law 1876/1990:
    • (a) national agreements are concluded between GSEE, as the third-level trade union organization and the most representative or nationwide employers’ organizations;
    • (b) national agreements apply to all workers on Greek territory – regardless of their affiliation to a trade union or not – who are bound by an employment relationship under a private law contract to any employer (Greek or foreign), or to an undertaking, enterprise or service in the public or private sector of the national economy, including workers engaged in agriculture, livestock husbandry and related occupations, and homeworkers, as well as to persons who, while not bound by an employment relationship, perform their work in a situation of dependence and require protection similar to that enjoyed by employed workers; and
    • (c) national agreements set minimum standards of wages and conditions of work and are binding uniformly on all employers throughout the country.
16. 802. The institutional added value granted to national agreements as the statutory machinery for setting minimum standards for wages and working conditions for the protection of workers, was further reinforced by the protective principles set out in two key provisions of Law 1876/1990 which have now been derogated from:
    • (a) Article 3.2: No sectoral or enterprise agreement, and no national or local occupational agreement shall contain provisions which are less favourable to workers than those set out in national general agreements.
    • (b) Article 10: Where an employment relationship is governed by more than one collective agreement in force, the agreement containing the terms most favourable to the workers shall prevail. In comparing and opting for the terms to be applied in this case, account shall be taken: (a) of uniformity of remuneration; and (b) of uniformity of other conditions.
17. 803. It should also be emphasized that Law 1876/1990, which wholly regulates, secures and promotes a system of free collective bargaining, is the result of a “Social Pact” endorsed unanimously in 1990 by all political parties in the Greek Parliament and empowered by the consensus of the high-level representative employers’ and workers’ organizations following intense social dialogue. In this context, the law in question had succeeded in creating a fully integrated and balanced system proving its validity, effectiveness and force throughout time. The standing of the NGCA concluded through free collective bargaining works as a mechanism to set the mandatory minimum wage standards and provides a national legitimate guarantee that largely justifies the non ratification by Greece of the ILO Minimum Wage Fixing Convention, 1970 (No. 131).
18. 804. Yet, the Greek Government has now intervened in the free collective bargaining process and in the collective agreements already in force in order to bindingly regulate wages and conditions of work for workers employed in the wider public sector by multiple reductions in their wages (article 3, paragraphs 4, 6 and 8, of Law 3845/2010, and article 1, paragraph 5, of Law 3833/2010).
19. 805. The complainant further emphasizes that following the entry into force of article 2, paragraph 7, of Law 3845/2010, employers and their organizations have intensified pressure during collective negotiations with a view to arrive at wages below the hitherto binding minimum standards of wages set by the NGCA, which were already low. This particular trend is exemplified by:
    • (a) the enterprise collective agreement that set terms of pay and work in a prominent multinational company that provides security services (G4S SECURE SOLUTIONS SA) for the private as well as the public and wider public sectors, where the company has pursued and finally achieved to pay “new-comer” employees below the minimum wage standards set out by the national agreement in force, by including in this collective agreement an explicit clause which for the first three years of employment sets wages at €640 instead of the €739.56 of the national agreement. Furthermore, the detrimental pressure to suppress labour cost wholly affects workers employed under a contract to provide security services that was awarded to the aforementioned company by one of the most important state-controlled public utility companies of mass transportation, the Athens Piraeus Electric Railways SA;
    • (b) the enterprise collective agreement setting terms of pay and work in a company of the secondary agricultural sector (Greek Animal Feeding Stuffs Industries SA). This particular agreement sets, for their first eight years of work, “new-comer” pay below the minimum standards provided by the national agreement at the amount of €701.79. Thus the agreement in question regrettably violates not only the minimum wage, but also the negotiated and agreed rule to grant wage increases by three-year seniority periods, which from 1975 onward is an integral part of the national agreements.
20. 806. The GSEE condemns the intervention of the State in the collective autonomy by the adoption and imposition of permanent “structural” measures with the invocation of the national interest alongside the obvious violation of the principles of proportionality and the necessity of moderation, which has resulted in considerably weakening the fundamental institution of the national collective agreement and in less favourable regulation of the minimum standards of work in a way that is detrimental to all workers.
21. 807. The GSEE emphasizes that the scope, the effect and the wider implications of this intervention should be appraised in conjunction with the widespread precariousness in the labour market, the considerable volume of unregistered and/or flexible work and the steadily increasing unemployment that render applicants for work more vulnerable, inducing involuntary acceptance of reduced working rights and/or excessively flexible job positions.
22. 808. Such an intervention furthermore should be assessed by also taking into account the broad authorization – without the clarity required by the State’s Rule of Law – to further regulate crucial terms of work included in Law 3845/2010 and the memoranda (e.g. the increase of the minimum threshold for collective dismissals, reduction of severance pay, State determination of the minimum standards of wages and working conditions for young workers up to 25 years of age, the reduction on the sum unemployment benefits). Moreover, the same Law 3845/2010 stipulates significant increases in all types of VAT triggering substantial increases in the prices of consumer goods, fuel and public utility services. These obviously disproportionate measures disempower and render workers more vulnerable vis-à-vis the combined spillover effect of lay-offs, wage freezes and the abolition of the minimum standards of wages. Such measures annul the State’s fundamental obligation to provide and protect decent work, violate the core of individual and social rights and endanger social peace and cohesion.
23. 809. The argument pertaining to the necessity of the imposed austerity measures advanced by the Government cannot be extended to the point of violating the core of individual and social rights, as “necessary” should denote the sense of measure and moderation considered essential, applicable and suitable for a democratic society that respects and secures the value of the human being as well as the principles of equity, decent work and collective autonomy.
24. 810. There is furthermore no reasonable relationship nor a quantifiable economic result between the extent, the intensity and the duration of such restrictions in the private sector adopted and implemented to the detriment of collective autonomy, collective agreements and workers’ rights and the pursued goal, which is primarily to ensure the fiscal discipline required to address the country’s sovereign debt and budgetary deficit problem, the implementation of the stability programme and the re-establishment of trust to Greece vis à vis its European partners and the global financial markets. The unjustified policy of uneven austerity at the expense of workers that aspires to hold down wage costs weakens the entire process of free collective bargaining and minima contained in the NGCA. Even if in the future the Government were to take measures for the socially vulnerable groups, these measures would not suffice to address and provide restitution for the irreversible damage done to workers’ occupational and economic interests through the radical reversal in the minimum standards of wages and working conditions.
25. 811. Furthermore, as the economic and income policy is defined on a yearly basis, the reduction or the non-regular readjustment of provisions of work and especially wages results not only in the real reduction of the wage itself but also in “freezing” workers’ pay and in the ensuing permanent reduction of their real income. Notably, according to data by the Labour Institute of the GSEE, the freeze in wages will diminish the purchasing power of lower wage categories back to the levels of 1984. The major implication, among others, is the refutation of the subsistence function of the wage compounded by the grave impact on the country’s economy that depends on domestic demand: the ability of the population to consume.
26. 812. The complainant further points out that the level of wages in Greece does not constitute a competitive disadvantage but rather an advantage for the businesses operating in the country, a fact recognized by the three representative Greek employers’ organizations whose leaders have recently expressed the opinion that the wages in Greece are not high. Indeed the view is commonly held that, as grounded in the general national collective agreement, the national system of collective bargaining is well balanced and protects the healthy competition between businesses by not allowing the acquisition of competitive advantages through competing to compress ad infinitum the wage cost.
27. 813. The aim of collective autonomy as well as of freedom of association is the preservation and promotion of the economic and working interests of the workers. The realization of this objective is now significantly hampered by the intervention of the State, as: collective agreements are not respected and observed; the conclusion of collective agreements is either prohibited or not possible, or their role is limited; and consequently any intention of workers to be members of trade unions is seriously affected as the trade unions’ bargaining power is weakened.
28. 814. Finally, the GSEE contends that the spillover effects of these laws have led to infringements of other ratified international labour standards. These measures were not the subject of social dialogue, but were rather forwarded to the Greek Parliament for adoption with urgent procedures. Only Law 3846/2010 on guarantees against work insecurity went through a social dialogue process, concluded in March 2010, but neither information nor consultation occurred, even though the country was already under pressure due to the economic crisis. It should be noted that the intense pressure of the employers’ organizations during this particular social dialogue led to significant and substantial changes in their favour including in the form of flexible employment. The outcome was that this particular law, despite efforts to improve the institutional framework, did not respond adequately to its initial aim, combating work insecurity.
29. 815. Law 3863/2010 constitutes a further elaboration of the commitments undertaken by the Government and agreed upon in the memoranda in which there was no room for improvement within a framework of nearly non-existent due consultation. The Government did not respond to its obligation to conduct proper social dialogue. Rather, the Ministry of Labour and Social Security told the social partners that in a very short period of time they had either to decide unanimously on the issues in question or there would be an immediate adoption of the measures (that affected substantially workers’ rights) as they first stood in the draft Bill.
30. 816. The GSEE further alleges that there had been an undue delay on the employers’ side to conclude the national agreement (15 July 2010) only after the adoption of Law 3863/2010 so that employers could benefit from the provisions increasing the threshold for collective dismissals, reducing severance pay and pay rates for overtime work, reducing young workers’ wages, etc., whereas the union had hoped that it would have been able to negotiate important provisions for the protection of workers during the economic crisis.
31. 817. The complainant concludes that the Government did not pursue real and substantial social dialogue that could have promoted alternative and more acceptable solutions and proposals as repeatedly advanced by the GSEE or other social partner organizations regarding, among others, the social dimension and the long-term effectiveness of measures to lead out of the financial crisis. The pressure that accompanied the imposition of the legislation in question cannot in any way retract or diminish the need to maximize social cohesion and mutual understanding. On the contrary, the urgency, the scope and the impact of the measures accentuated the need to pursue the maximum legitimization of the legislative power and emphasize the importance of substantial social dialogue.
32. 818. The GSEE considers that the Government has gone beyond what might be considered as acceptable limitations in urgent circumstances as these provisions: have not been imposed for an explicitly defined and limited period of time; are neither proportionate nor adequate; have been adopted without examining sufficiently other well-weighed and more appropriate alternatives; there is no perceivable causal relationship between the extent, the strictness and the duration of the imposed restrictions and the pursued aim; and they were not accompanied by adequate and concrete safeguards and guarantees to protect the living standard of workers and reinforce the ability of vulnerable groups in the population to address the combined direct impact of the economic austerity measures with the multiple, spillover and collateral side effects of the economic crisis.
33. 819. In its communication of 2 December 2010, the GSEE provides a letter from the President of the Economic and Social Council of Greece to the Prime Minister, which it considers reinforces its arguments about the impact of destabilization and the resulting abolition of the collective bargaining and collective agreement system. This letter calls upon the Prime Minister to proceed to the re-examination of the changes undertaken and engage in a structured dialogue focused on these crucial issues before any legislative initiatives are taken.
34. 820. In their communication dated 9 March 2011, the ADEY, GENOP–DEI–KEI and the Greek Federation of Private Employees (OIYE) join the abovementioned complaint observing that they represent both private and public sectors that have been affected by the legislative measures in question. In particular, the complainants emphasize that a law which derogates from the imperative that higher level collective agreements must set the minimum with lower level agreements only diverging in a manner favourable to the employees necessarily violates the obligation under international Conventions to promote and encourage collective bargaining at all levels.
35. 821. In this regard, the complainants point out that Law 3845 of 6 May 2010 permits derogations, including those less favourable to workers, from the national inter-professional agreements by local territorial pacts. Branch-level and sectoral agreements may similarly be derogated from by enterprise-level agreements. The objective of this law is clearly declared and revealing: a framework for a free market under conditions of development and competition. These clear violations of Conventions Nos 87, 98 and 154, moreover, have paid no heed to the important principles elaborated for any exceptions which should be limited in time, ensure appropriate guarantees for the most vulnerable and be the result of consultations with the employers’ and workers’ organizations with a view to finding agreement. Law 3845/2010 was voted without prior dialogue with the unions.
36. 822. The complainants also raise deep concern about Law 3899/2010 which permits bargaining with the branch union if no union exists at the enterprise level. Given the possibility of any party bringing the matter to arbitration, the complainants are concerned that the branch-level organization would be placed in a situation where compulsory arbitration will force upon enterprise employees an agreement that no one accepted.
37. 823. As regards Law 3871 of 17 August 2010, the complainants state that this in effect places a salary freeze as it nullifies any arbitration decision that would provide an increase in wages for 2010 and the first semester of 2011. Similarly, it nullifies any provision in a collective agreement that would raise the wages by more than the increase provided in the NGCA, which is restricted to European inflation. According to the complainants, this would mean a decrease in wages as Greek inflation is higher than that at the European level. These restrictions, which first make reference to 2009, result in constraints on collective bargaining for over three years, largely exceeding the limited duration set out by the Committee on Freedom of Association in such cases.
38. 824. Finally, the complainants refer to Law 3863 of 15 July 2010, which provides special apprenticeship contracts for young workers between 15 and 18. This deprives young workers of the protective coverage of collective agreements and thus violates their trade union rights.
39. 825. In its communication of 18 November 2011, the GSEE provides additional information concerning recent provisions introduced by Law 4024/2011 which, it alleges, consolidates further the deconstruction of an industrial relations system that was working effectively to set minimum standards of work for all workers through collective agreements concluded after free negotiations in the private and the wider public sector. The new measures, among others, include provisions that abolish the fundamental protective principle of favourability, as well as the prevalence of less favourable firm-level agreements over the uniform standards of pay and work conditions provided in binding sectoral agreements. In addition, the new legislation eliminates the extension of the scope of sectoral collective agreements and introduces legislative intervention – beyond the unilateral drastic reduction in wage and salaries – to fully abolish binding collective labour agreements in force and to implement a uniform pay scale in public utility enterprises in the broader public sector, where collective agreements are universally applicable and collective bargaining has already explicitly been prohibited by law from setting pay increases. Another highly questionable aspect of this recent legislation is the imposition of the so-called process of “labour-reserve”, which initiates concealed collective dismissals of thousands of workers in the public and the broader public sector.
40. 826. Other provisions in Law 4024/2011 overtly interfere in the structure and the operation of trade unions and contravene the right of workers to collective representation vis-à-vis their employers by persons that are freely and democratically elected. This essentially anti-union legislation extends the right to negotiate and conclude enterprise-level agreements to nebulous non-elected “associations of persons” and seriously undermines the principle of collective representation. In this context, the employer is relieved of any obligation he has towards a trade union organization, while the representatives of such “association of persons” do not have a permanent mandate to represent workers vis-à-vis the employer on collective issues of work and do not have the trade union rights and protection that lawful elected representatives of workers are entitled to. Under the pretext of facilitating the small and medium-sized enterprises to use the working-time arrangement system (increased and reduced work periods without an increase or reduction corresponding to pay at the relevant periods), the State allows an “association of persons” to be formed by 25 per cent of the personnel (in firms with more than 20 workers), or by 15 per cent of the personnel (in firms with less than 20 workers). Any agreement between the employer and such an “association of persons” – which could be composed even by one person in enterprises with ten workers – is binding on all workers. At the same time, this provision abolishes the employer’s obligation to observe the hierarchy of consultation and firstly address the representative enterprise trade union or, in the absence of a firm-level union, address the sectoral trade union that represents affiliated workers in order to agree upon a system of working-time organization. The complainant raises a particular concern that these latest actions have superseded article 13 of Law 3899/2010 on special firm-level collective agreements, which was a provision negotiated with the social partners in response to the memorandum conditions.
41. 827. By granting to these spurious formations of virtual representation the vital trade union right to conclude collective agreements, which under the Greek Constitution and the national legislation, is recognized exclusively as a right and responsibility of trade unions, the Greek Government violates the fundamental guarantees of the right to organize and collective bargaining enshrined in core ILO Conventions Nos 87, 98 and 135, diminishes substantially the role and the bargaining power of trade unions and paves the way for their marginalization. The danger is imminent for the creation at the enterprise level of “yellow” associations of persons and trade unions influenced/controlled directly by the employer, to facilitate the implementation of managerial decisions against the rights of workers and in particular allow the generalized implementation of enterprise-level collective agreements, that will reduce the level of protection of workers and will insert unequal pay and conditions of work.
42. 828. The GSEE states that there is already evidence that large enterprises – affiliated to sectoral employers’ organizations – with no enterprise union since workers were members of the relevant sectoral trade unions (i.e. hotels, supermarkets, security companies, etc.), will directly draw on these provisions to reduce wages by concluding “collective” agreements with the “yellow” company association of persons, established only for that reason.
43. 829. Furthermore, the threat to directly abolish the NGCA was repeatedly used as a leverage to pave the way for the imposition of new unilateral measures that “manipulate” the regulation of pay in the private sector. Thus, the following new additional measures were imposed cumulatively by article 37 of Law 4024/2011:
    • – Severe limitation of the duration of the binding effect of the extension of the collective agreements’ scope, in conjunction with the concurrent suspension of the procedure of the extension itself as regards sectoral and occupational collective agreements, imposed for an indefinite period namely “for the duration of the implementation of the Medium-term Fiscal Strategy Plan”.
    • – The suspension for an indefinite period, namely for “the duration of the implementation of the Medium-term Fiscal Strategy Plan” of the fundamental protective “favourability principle” that ensured the prevalence of those terms in collective agreements, which are more favourable for workers, with the ultimate aim to eliminate it as requested by Greece’s creditors.
44. 830. As sectoral and occupational collective agreements are henceforth binding only on the employer and worker signatory parties and their members, without the institutional possibility to extend the scope of a collective labour agreement and to declare it as universally binding, employers at their discretion can leave their sectoral organizations and opt out from the binding effect of the sectoral collective agreement. This unavoidably provides the conditions for unfair competition between enterprises, as well as between organized and unorganized workers. In addition, this creates a situation where there is no incentive for enterprises to participate in employers’ organizations with a view to influence the outcome of collective negotiations relevant to the regulation of labour cost in a sector or occupation. By suspending the extension for an indefinite period, the State abandons numerous categories of wage earners to the mercy of individual bargaining with employers.
45. 831. Considering that the institution of extension exists in most European Union (EU) countries, these developments would appear to show that a unique “experiment” to deconstruct the labour relations system and its sustaining institutions may well be under way. While collective agreements have not formally been forbidden and can be concluded, in practice employers are now entitled to multiple legitimate options by which they can avoid the binding effect of collective agreements and impose at their discretion on each of their workers less favourable terms of work. On the other hand, the favourability principle had created a “pyramid” of regulations at the sectoral level that, by assuring healthy competition around minimum labour cost in a sector, enterprises considering their capacity could determine better conditions of pay and work for their workers. For this reason, wages that were determined by enterprise-level collective agreements had steadily provided the basis for wages included in relevant sectoral collective agreements and were usually higher than the sectoral wage, which in turn were generally higher than the minimum wages set out by the national agreement. The abolition of this principle can only lead to an abrupt reduction of wages to the minimum wage level of the national agreement signalling reductions that will exceed 30 per cent.
46. 832. These new provisions not only disempower free collective bargaining and collective agreements, which constitute a main pillar of democracy, but will reduce greatly the wages in the private sector and intensify the recession, without any positive result for the competitiveness of the economy. Following the decisive weakening of sectoral collective agreements, the disempowerment of free, democratic and effective trade union representation of workers and the concurrent deficiency of labour inspection mechanisms, the terms of pay and conditions of work will be regulated henceforth unilaterally from the employers, under the threat of dismissal. The adoption of these new measures was inappropriately and prominently proclaimed as a “sine qua non” condition for the release of the sixth loan disbursement to Greece. The due timely social dialogue before the adoption of any measure hitherto remains deficient. Social dialogue is inevitably degraded as foregone decisions are dictated by the Troika, committing the Government.
47. 833. Moreover, in this context, a mesh of regulations gives to employers the equal right to unilaterally seek the binding process of arbitration, while simultaneously: (i) the obligation of bona fide attendance in the previous stage of mediation is lifted by suppressing the obligation to accept the mediator’s proposal before resorting to arbitration; (ii) the competence range of the arbitration is severely restricted to ruling only in cases concerning basic salary and daily wage determination; and (iii) the universal prohibition for trade unions to undertake strike action during arbitration is maintained, even when the employers unilaterally seek recourse to arbitration.
48. 834. These measures, that extend considerably beyond the scope of the recommendations of the Committee on Freedom of Association in Case No. 2261, substantially disempower trade unions and expose rights that workers acquired by collective agreements to potential definite elimination in a series of crucial matters including health and safety, the regulation of working time, personnel statutes, parental leave, elimination of gender discrimination at work, educational leave, trade union contribution regulations, as well as matters relating to the procedure and the terms of collective bargaining, mediation and arbitration.
49. 835. In this light, taking into account that the provision of work beyond its wage-cost aspect, integrally relates to the conditions under which work is provided, the content and the configurative frame of the arbitration award cannot be different from the general one constitutionally enshrined for the collective agreements that are concluded after collective bargaining.
50. 836. Critical further interference obstructs the work and the competence of the independent arbitrator, by additionally restricting the scope of rulings to disputes on basic wage terms and, in particular, by actually forbidding arbitrators, retrospectively from the beginning of 2010, to grant any wage increase for 2010 and the first half of 2011 whatsoever. For the period between 1 July 2011 and 31 December 2012, the scope of arbitration awards allows only increases limited to the base annual rate of European inflation and the law stipulates that failing to do so the arbitration award will be invalid without any legal effect while the same obligation is imposed to mediators. Additionally, the reform of the labour arbitration, the Organisation for Mediation and Arbitration (OMED), includes the ipso jure expiry of its current body of mediators’/arbitrators’ mandate on 30 March 2011 at which date they are all to be replaced, regardless of the pending cases under their responsibility.
51. 837. The GSEE also refers to measures affecting all types of remuneration and benefits of all workers regardless of the type of their contract (indefinite or fixed duration) in public utility enterprises, the perpetuation of the general freeze in wages as well as the explicit prohibition also for the year 2011 to trade unions active in these enterprises to exercise their right to free collective bargaining – in breach of collective agreements – to conclude collective agreements that provide increases in their wages, as they are now formed after the abovementioned reductions imposed by law. Additionally, Law 4024/2011 (article 31) has imposed the general abolition of collective labour agreements that set out the terms of pay and work in all enterprises of the wider public sector and has set a wage ceiling notwithstanding previous wage cuts. Workers in these enterprises from now on will be ruled by the public sector pay regime, regardless of their entirely different existing pay systems that were appropriately defined by the business and/or production level of each enterprise, workers’ occupational and/or educational profile and any specific work conditions (e.g. dangerous or unhealthy work). In addition, these measures provide for the abolition of all the collective agreements hitherto in force, the imposition of a compulsory start to collective negotiations with a content predefined by law and the obligation to conclude the collective bargaining process within a month after its commencement (failing which the terms of work will be exclusively determined by law), for workers in certain public utility enterprises. Most typical examples include Law 3891/2010 (articles 16–18) for the Hellenic Railways Organisation and Law 3920/2011 (articles 8–12) for the Athens Urban Transportation. Despite this process that was forcibly imposed on the workers concerned, these enterprises as well are subject to the mandatory provisions of article 31 of Law 4024/2011.
52. 838. In addition to relevant provisions of 2010, a new provision set out that all the young workers in this category will receive only 80 per cent even of the minimum wage. Such contracts of “apprenticeship”, despite the initial commitment of the Government that they must not exceed one year, can now last for 24 months, thus further weakening the due protection of this vulnerable category of workers.
53. 839. The dismissal of workers without severance pay has been further facilitated and the “recycling” of temporary workers, by substantially increasing the probationary period of work in the private sector from two to 12 months, is now provided. The worker is automatically dismissed, without notice and without severance pay (article 18, paragraph 5(a), of Law 3899/2010), in case the employer considers – without an obligation to justify it – that the worker does not match managerial demands.
54. 840. In this regard, the GSEE refers to the abolition of protective clauses in work statutes contained in collective labour agreements that had safeguarded workers against dismissal via fixed-term contracts engineered to expire concurrently with the worker’s retirement date. The abolition of these clauses stipulating that such employment contracts could only be terminated under valid justification, opens the way to unfair dismissals in certain categories of enterprises (mainly banks and public utility enterprises – article 40 of Law 3896/2011).
55. 841. New severe fiscal measures have been introduced with effect on the employment and the remuneration of workers in the public and broader public sector (central Government, municipalities, public companies, local governments, state agencies and other public institutions) including:
    • (a) an additional unilateral wage and salary reduction through the establishment of a special solidarity contribution of 2 per cent on regular pay to combat unemployment;
    • (b) a new wage freeze for workers in the public and in the broader public sector – notwithstanding previous severe wage cuts – this time by temporarily freezing career advancement premiums (change of remuneration grid); and
    • (c) the imposition of the new “labour reserve” scheme meaning that “surplus” staff in public enterprises and state agencies will be transferred to a labour reserve, after subjection to a re-evaluation process for job placement in the public or the broader public sector, paid on average 60 per cent of their base wage for one year (articles 37–38 of Law 3896/2010, and articles 33–34 of Law 4024/2011).
56. 842. These measures, including drastic steps with fiscal and tax costs, have been adopted without any effective reinforcement of the labour inspectorate mechanisms despite acute needs. To date, not only trade unions at large but the trade unions representing labour inspectors strongly complain about the labour inspectorate understaffing and emphasize that deficient training on numerous new legislation makes their task even harder.
57. 843. The revisions of both memoranda articulate the commitments undertaken by the Greek Government and illustrate the strong pressure by the country’s creditors, to promote and rapidly implement structural reforms in the labour market by weakening the institutional role of trade unions and their fundamental tool of action, namely the right to conclude binding collective agreements that set protective minimum standards of work (described as “obstacles in the labour market”), such as the NGCA and the national sectoral collective agreements. Equally visible is the intention to reinforce the managerial prerogative and fully promote labour market flexibility aiming chiefly at reducing labour cost and boosting greater wage flexibility at the firm level.
58. 844. The GSEE recalls the following Government commitments:
    • Further measures will be taken to reform collective bargaining, including the elimination of the automatic extension of sectoral agreements to those not represented in the negotiations ...
      • (a) in the Updated Memorandum of Understanding on Specific Economic Policy Conditionality of August 6, 2010 that:
        • ... by the end of the 3rd quarter of 2010 and in order to strengthen labour market institutions “Following dialogue with social partners, Government adopts and implements legislation to reform wage bargaining system in the private sector, which should provide for a reduction in pay rates for overtime work and enhanced flexibility in the management of working time.
        • Government ensures that firm level agreements take precedence over sectoral agreements which in turn take precedence over occupational agreements. Government removes the provision that allows the Ministry of Labour to extend all sectoral agreements to those not represented in negotiations.
        • Government amends employment protection legislation to extend the probationary period for new jobs to one year, and to facilitate greater use of temporary contracts and part-time work ...”.
      • (b) in the Updated Memorandum of Economic and Financial Policies of February 11, that:
        • (i) Implementation of labor market reforms is underway. Legislation covering arbitration and collective bargaining was passed in December. Concerning collective bargaining, in order to encourage greater wage flexibility, the government allowed for special firm-level collective agreements. These were subject to some conditions, including the non-binding evaluation by the Labor Inspectorate (gathering representatives of the government, social partners, and local authorities), and consent by sectoral unions in small firms. The government will closely monitor the implementation of this reform and underscore the right of social partners at the firm level to utilize special firm level agreements, as well as reaffirm the nonbinding nature of the Labor Inspectorate assessments. The government is prepared to amend the legislation by end-July if it proves necessary to support greater firm-level wage flexibility.
      • (c) in the Updated Memorandum of Understanding on Specific Economic Policy Conditionality of February 11, 2011 that:
        • (i) Government reforms legislation on fixed-term contracts and on working-time management. Government simplifies the procedure for the creation of firm-level trade unions.
        • (ii) By the end of the 3rd quarter of 2011 and in order to promote labour market structural reform Government promotes, monitors and assesses the implementation of the new special firm-level collective agreements. It ensures that there is no formal or effective impediment to these agreements and that they contribute to align wage developments with productivity developments at firm level, thereby promoting competitiveness and creating and preserving jobs. It provides a report on its assessment. Any necessary amendment to the law on sectoral collective bargaining is adopted before end-July 2011.
59. 845. This context is characteristically revealed in the NGCA Preamble, where the signatory parties – national social partners – state the following:
    • The collective negotiations for the current National General Collective Agreement have taken place in a context of irregular circumstances due to the fiscal derailment, which led the country to the activation of the financial aid mechanism IMF-EC-ECB and the implementation of the measures included in the relevant memorandum and the Law 3845/2010.
    • The impact of the crisis makes more than necessary the protection of workers’ and employers’ organizations from the traditional interventional role of the State and the strengthening of their role in the formulation of social and economic decisions and policies.
    • Our Organizations consider the National General Collective Agreement the most decisive means of regulating and formulating policies with mid/macro term perspective for the most prevailing issues such as the exit from the depression, the tackling of the growing unemployment rate, the creation of growth conditions and the preservation of social cohesion.
    • In the framework of these crucial circumstances for the country, the signatory parties of the NGCA consider that there is a need to support workers’ disposable income, especially the one of the lower paid workers, without ignoring the needs of the enterprises, for reasons of preserving social protection, as well as boosting the private economy, which suffocates from the lack of liquidity, that results to its decline and the great rise of unemployment.
60. 846. In this light, the GSEE would further like to emphasize that pressure by employers and their organizations during collective negotiations of 2010 has demonstrably intensified following the entry into force of article 2, paragraph 7, of Law 3845/2010, so as to arrive at wages below the hitherto binding – albeit low – minima set by the relevant agreements.
61. 847. As regards OMED, the GSEE observes that article 14 of Law 3899/2010 abolishes each party’s previous obligation to accept the mediator’s proposal before exercising its right to unilaterally have recourse to arbitration and simultaneously restricts the content of the arbitration ruling to the determination of the basic wage. Article 16 of Law 3899/2010 provides for the interruption of the mandate of the existing body of mediators and arbitrators in the beginning of 2011, despite cases pending for the resolution of collective disputes for the conclusion of collective agreements.
62. 848. Additionally the GSEE condemns the explicit reiteration of the Government’s commitment to abolish the institution of extending the scope of sectoral collective agreements that were declared as generally binding as having a negative impact on ongoing collective negotiations for the conclusion of dozens of collective agreements that expired in the beginning of 2010 – particularly sectoral agreements – which cover and protect thousands of workers. The majority of these collective negotiations led to the conclusion of collective agreements covering the year 2010, with great difficulty and delay at the end of 2010 or at the beginning of 2011, while many of them are still pending. For example, the collective bargaining of the national sectoral collective agreements of 2010 to determine terms of pay and work for the banking sector is still pending; for workers in the tourism sector negotiations were concluded in August 2010; for workers in the metal sector in October 2010; for workers in the petroleum products, refineries and liquefied gas industry in December 2010; for workers in the commerce sector in April 2011; and for medical sales representatives in June 2011.
63. 849. Furthermore, according to data by OMED, there were currently ten cases for the year 2010 and 17 cases for 2011 pending in the stage of mediation, and ten cases pending in the stage of arbitration for the year 2011.
64. 850. As already mentioned, a key issue causing delay in the collective bargaining process and the conclusion of collective agreements, is the duration of the binding force of the collective agreement. According to the legislation in force, the clauses of a collective agreement have an immediate and binding effect and remain in force for a period of six months after the expiration or the denunciation of the collective agreement. On expiry of this period of six months, the existing terms of work (included in the collective agreements) continue to apply as terms of the individual employment contract, until its termination or amendment. It is, therefore, obvious that the employers’ bargaining position is unduly reinforced by the delay in completing collective negotiations and concluding the collective agreement, since after the expiration of the six-month period not only can they press substantially for a bargaining from a zero point but they can also now legitimately obtain different and unequal terms of pay and work for the new workers they are about to hire.
65. 851. It should also be noted that in the case of collective bargaining for the conclusion of maritime collective agreements, under the combined impact of the austerity measures and the drive to reduce or freeze wages, the subsequent disruption and delay of the collective bargaining process was unduly severe resulting in an excessive reinforcement on the employers’ (shipowners) side and leaving no option to the Pan-Hellenic Seamen’s Federation (PNO) but strike action. The legitimate and fully justified collective action of the PNO were right away repressed by the Greek Government that imposed a civil mobilization order valid until further notice (i.e. for an indefinite period) applicable to crews employed on coastal passenger vessels: a total prohibition of the right to strike. For this illegal practice, the PNO and the International Transport Workers’ Federation (ITF) have submitted a complaint to the Committee on Freedom of Association, fully supported by the GSEE (Case No. 2838).
66. 852. The complainant alleges that, in the third review of Greece’s adjustment programme, the European Commission criticized the Government for not doing enough to eliminate sectoral agreements and to replace them by firm-level contracts. This fixation by the European Commission and the International Monetary Fund (IMF), among others, to determine by law the level of bargaining in Greece goes directly against the principle of free and voluntary collective bargaining embodied in Article 4 of Convention No. 98, whereby the determination of the bargaining level should essentially be left to the discretion of the parties and not be imposed by law, by decision of the administrative authority or by the case-law of the administrative labour authority.
67. 853. The scope, the effect and the wider implications of the State’s intervention in the collective bargaining system and the collective agreements should be appraised in conjunction with the dire impact of the economic policy implemented in Greece. This policy compounds the dire effect of deficiencies that existed in the Greek labour market before the crisis such as widespread precariousness in the labour market, the considerable volume of unregistered and/or flexible work and the steadily increasing unemployment that debilitate workers vis à vis the crisis and its effects.
68. 854. The main pillars of the economic policy implemented in Greece since October 2009 following the outbreak of the country’s public debt crisis are based on consecutive rounds of austerity and tax measures, which have led to the erosion of living standards of Greek workers and pensioners in the public and private sector. Hence, the combined effect of the measures magnifies the detrimental effects of legislative interventions in the labour market and further consolidates the disempowerment of workers and pensioners. The dramatic reduction in workers’ and pensioners’ income coupled with the excess burden of taxation (direct and indirect) has caused a sharp fall in purchasing power, in consumption and in the living standards of wage earners and pensioners, thus making them particularly vulnerable to conditions of labour market deregulation and unprecedented recession. These conditions understandably induce involuntary acceptance of reduced working rights and/or excessively flexible job positions such as reduced term work by rotation.
69. 855. As the Greek economy goes through the third year of recession, the process of internal devaluation, which is now well under way, has not reached its goals, notably Greece’s return to the markets in 2012, despite the painful sacrifices of workers and pensioners. Deep recession has prompted a strong divergence in per capita income levels in Greece (falling back to 2000 levels) from the average of the 15 most advanced EU countries, in the purchasing power of the average wage (regressing to 2001–02 levels), in the unemployment rate (falling back to the levels it was in the 1960s) and in domestic demand (back to 2003 levels). At the same time, in 2010–11, the Greek economy experienced a divergence of 9 per cent from the average of the 15 most advanced EU countries. Convergence rates were reduced in 2009 from 84.5 per cent of the EU–15 average to 75.9 per cent in 2011. This manifests a regression of real convergence by one decade, namely back to 2001 levels.
70. 856. In fact, the programme has trapped Greece in a vicious circle where austerity generates recession, followed by more austerity, new taxes and deeper recession that strangles prospects of economic growth, stifles job creation and tests social cohesion. This self-defeating shock therapy has failed to put Greece’s finances on a sustainable route or stabilize the Eurozone. It has damaged every indicator of the economy at huge human and social cost.
71. 857. Swamped in recession, EL.STAT (Hellenic Statistical Authority) figures show that the economy shrank by 7.3 per cent in the second quarter of 2011 exceeding all projections. The Labour Institute (INE) of the GSEE indicates that the spectacular fall (-16.4 per cent) in domestic demand in the period 2009–11 has led to a dramatic GDP reduction and to an explosive increase in unemployment. Moreover, the cumulative GDP reduction amounts to 10.2 per cent in the three-year period 2009–11. In the long term the fall in output is the biggest in the post-war period.
72. 858. In the period 2010–11, the reduction in private consumption has reached 11 per cent. The volume of private consumption is expected to continue to shrink in 2012 (-2.2 per cent according to the European Commission forecasts) while real consumption will regress to 2004 levels.
73. 859. The doubling of the unemployment rate for the period 2009–11 combined with the salary reductions for civil servants have caused a fall in real wages of 11.5 per cent in the whole economy and 9.2 per cent in the private sector for the period 2010–11. In addition, the combination of income reduction and unemployment increase has led a large part of working families and households with debt obligations to bankruptcy. The inability to pay back their loans would lead many households to a loss of their property rights.
74. 860. The INE/GSEE further shows that the rate of unemployment has doubled in the three-year period between 2009–11 registering a 95 per cent increase in the number of the unemployed between March 2008 and March 2011. The unemployment rate of 17.6 per cent in July 2011 is forecast to reach 18 per cent by the end of 2011 with real unemployment at 22–23 per cent. Youth unemployment is at 43.2 per cent with one out of two young people unemployed. Among women, a historically high rate of 20.3 per cent compared to male unemployment of 13.8 per cent indicates that austerity has also widened the gender pay gap. Greece is actually pushed back to the levels of the 1960s. For the first time in the post-war period Greece faces an employment crash: the number of the unemployed exceeds that of the economically active population.
75. 861. On the other hand, the sharp increase in unemployment drains vital resources from social security funds, thus making their sustainability uncertain in the future. According to estimates of the main Social Security Fund (IKA), the salaries of insured workers will fall by 6 per cent. This reduction will cause further losses in 2011 (€700 million just for IKA) and taking into account another 1 million uninsured and undeclared workers, pension funds will suffer an additional loss of €5 billion.
76. 862. The above data indicate that Greek workers have entered a long period of social and economic degradation, which, coupled with a decline in their living standards, will mainly hit low- and middle-income groups and lead to the marginalization of the most vulnerable social groups, particularly the long-term unemployed and pensioners. Most recent economic data show an increase in poverty rates and inequality levels as the 2010 income levels of 5 per cent of the population are pushed below the 2009 poverty line and added up on the top of the already poor 20 per cent of Greeks.
77. 863. Consequently, it is in the light of these developments that one should assess the extent, the impact and the wider implications of State intervention in the system of collective bargaining and collective labour agreements taking into account the growing precariousness in the labour market and the persistent rise in unemployment. The decline in workers’ standard of living and the economic and social regression of Greece are not accompanied for the time being by any visible prospect for economic recovery and improvement. The Greek economy has entered a process of disinvestment and shrinking productive structures rendering its workforce obsolete.
78. 864. The measures in force mentioned above which aim at the abolition of the universal protective minimum standards set out in the NGCA and in the national sectoral collective agreements, attest to the interference of the State in collective autonomy, in free collective negotiations, in the binding force and the content of the collective agreements (through the drastic restriction of the content of the arbitration ruling), as well as the sum of measures of permanent character exposed above.
79. 865. Furthermore, the State intervenes in the content of the collective agreements, by undertaking an international obligation for the adoption of measures to freeze wages in the private sector of the economy: an obligation with no straightforward and quantifiable causal relationship to resolving the country’s fiscal problem. Thus:
    • (a) the obligation of the Greek Government to take all appropriate and adequate measures to promote and protect effectively the process of free collective bargaining and its results, as manifested in the content of collective agreements and in particular those that relate to minimum standards of work, stands violated;
    • (b) the obligation of the Greek State to take all the necessary and adequate measures to ensure the free exercise of the right to organize, is violated, because the imposed measures:
      • – have a serious impact and damage the GSEE’s trade union action and function, that is primarily realized through the conclusion of the NGCA and the implementation of its provisions, which determine the universal minimum standards of protection of all workers in the Greek territory, resulting further in the reduction of the protection level and in the erosion of labour rights of workers it represents;
      • – have a serious impact and damage the most important trade union action and function of sectoral federations affiliated to the GSEE, that is primarily realized through the conclusion of the national sectoral collective agreements and the binding implementation of their provisions, which determine the uniform minimum standards of protection of all workers in the same sector, resulting further in the reduction of the protection level and in the erosion of labour rights of workers whom these organizations represent;
      • – influence negatively the intention of workers to join and be members of trade unions, while the bargaining power and the role of trade unions to protect and promote workers’ economic, labour and social security rights is seriously weakened;
    • (c) the fundamental principle of the national, European and international legal order that establishes the “social acquis” is violated in practice with permanent and extensive restrictions imposed on the collective autonomy and freedom of association, especially through the abolition of the fundamental protective “favourability principle”.
80. Greece has been effectively turned into a “laboratory” to conduct hazardous social experiments that in all likelihood will be transferred to other countries in Europe, which are or will be caught in financial difficulty with urgent credit needs.
81. 866. The immediate perceptible objective explicitly stated in the initial and updated memoranda is the reduction of nominal wages in the private sector by at least 20 per cent until 2013 in order to restore the competitiveness of Greek products by internal devaluation. The long-term goal is to fully disrupt the wage-setting system that existed before the crisis and implies the disempowerment of the trade unions and their institutional support.
82. 867. The new unacceptable and harmful measures intensify the deconstruction of labour institutions and rights. The measures in question allow worker representation by groups composed of non-democratically elected people who are subject to employers’ influence, abolish the fundamental protective principle of favourability and establish the prevalence of firm-level contracts with less favourable terms over sectoral collective agreements. They eliminate the institution of extending the scope of collective labour agreements and intervene – beyond the drastic reduction in wages and salaries – by legislation to fully abolish collective labour agreements and to implement a uniform pay scale in public utility enterprises of the broader public sector where collective agreements are universally applicable and where collective bargaining is now explicitly prohibited to set pay increases. Furthermore, they introduce the objectionable concept of “labour reserves” that conceals unfair collective dismissal for thousands of workers in the public and the broader public sector.
83. 868. All the above measures will uproot the existing wage-setting system, decimate wages and dilute workers’ rights. The abrupt and sharp private sector wage decline effected by weakening free collective bargaining and abolishing collective labour agreements that set out uniform minimum terms of employment and pay cannot address the competitiveness problem of the Greek economy or combat unemployment. On the contrary, any new regulation along the same lines will further squeeze household budgets and deepen recession. Such regulation not only does not help the Greek economy, but pushes Greece into deeper recession. It also undermines fundamental democratic institutions and weakens trade union organizations and social partners at a time when a government priority should be to seek, now more than ever, cooperation and dialogue between all parties so as to achieve a minimum social consensus and ensure social cohesion.
84. 869. Greece’s commitments to its international creditors cannot sufficiently and soundly justify the permanent and extensive restriction of fundamental rights that are enshrined in the Greek Constitution and in international Conventions, which are binding for any country that ratifies a Convention and set out the minimum protective universal standards of work in the global community. The invocation of the memoranda on the implementation of the international loan mechanism cannot in any way legitimize the elimination of minimum protection of work.
85. 870. The GSEE emphasizes that it is fully aware of the seriousness of the country’s financial situation, but it considers that any exit policy, to be effective, must be drawn up and implemented in consideration of the fundamental values and human rights that integrally and interdependently include social rights. In this context, any measure or mechanism of “economic governance” such as the international loan mechanism of the Greek economy must vitally include social clauses obligatory to the countries that implement it, while the mechanism supervising implementation must provide for the participation of officials with competence in employment, social affairs and equal opportunities, as well as fundamental rights.
86. 871. The GSEE stresses that this new evidence: (i) attests to the ongoing grave and permanent violation of the above core ILO Conventions as the direct result of consecutive measures adopted and continuously renewed by the Greek Government; (ii) substantiates the harmful impact of these measures on the exercise of the organization’s lawful rights and activities that detrimentally affects its functioning and status as a trade union; and (iii) corroborates the disempowerment of its members. For these and all the above reasons, the measures in question should be immediately withdrawn.
87. 872. In its communication dated 16 July 2012, the GSEE submits new allegations in relation to Law 4046/2012 on the “Approval of the Plans for Credit Facilitation Agreements between the European Financial Stability Facility (EFSF), the Hellenic Republic and the Bank of Greece, the Draft Memorandum of Understanding between the Hellenic Republic, the European Commission and the Bank of Greece and other urgent provisions for reduction of public debt and recovery of the national economy” endorsed by the Greek Parliament on 12 February 2012. Among the annexes of the law in question, the text of the new (second) Memorandum of Economic and Financial Policies sets out the numerous commitments undertaken by the Greek Government including a fresh round of austerity and new permanent measures that further disintegrate fundamental labour rights and industrial relations institutions.
88. 873. The impact of these measures is devastating for collective labour institutions, freedom of association, social dialogue as well as the principle of independent social partnership. These new permanent measures will irreversibly and harmfully compound the effect of standing measures as regards fundamental rights of freedom of association, free collective bargaining and their proper exercise since they demolish almost every aspect of the collective bargaining system. Once more, as the case is in Greece since May 2010 when the country entered the conditionality of the IMF–EU–ECB loan mechanism, disproportionate and inadequate measures are adopted without examining other calibrated and more suitable alternatives and wholly disregarding the agreement reached by the national social partners on 3 February 2012 to respect the agreed minimum standards of work included in the NGCA for the years 2010–12. (The complainant attaches a letter of agreement dated 3 February 2012 signed by the GSEE, the Hellenic Federation of Enterprises (SEV), the Hellenic Confederation of Professionals, Craftsmen and Merchants (GSEVEE) and the National Confederation of Greek Commerce (ESEE).)
89. 874. Under unprecedented pressure and intimidation by the Troika, the Government of Greece undertook to abolish the NGCA itself and has explicitly legislated to decrease the wage rates in the NGCA and replace them with a statutory minimum wage after July 2012, despite the abovementioned agreement.
90. 875. According to the Greek statistics authority, EL.STAT, unemployment reached 21 per cent in December 2011 with the number of jobless Greeks exceeding 1 million people. In the 15–24 age group unemployment is at 51.1 per cent, meaning that one out of two young workers is without a job. In the 25–34 age group unemployment is at 21 per cent. Among women, it is at a historically high 24.5 per cent against 18.3 per cent for men, suggesting that austerity also widens the gender gap. Nearly 30 per cent of the population has shifted below the poverty line.
91. 876. In this context, the new measures bring a 32 per cent cut to not only the minimum wage, but any kind of pay provided in collective agreements for young workers from 15 to 25 years of age – and a 22 per cent cut to the minimum wage for all workers over 25. The unemployment benefit, one of the lowest in the EU and with a shorter duration, was reduced well below sustenance levels in the actual Greek economy by 22 per cent to €361 per month as it was indexed to the minimum wage despite the rising cost of living. At the same time the suppression of the protective “after-effect” framework of the collective agreements will pull wages down by 40 per cent as individual contracts after their expiry or denunciation will automatically revert to the base wage/salary floor while a series of benefits/allowances connected to the conditions of each work/profession are abolished. In the public sector, cuts range from -25 per cent to -40 per cent. A further 150,000 job losses are expected in the already depleted public sector along with more cuts to public services including health, social welfare and education.
92. 877. To conclude, the new austerity package under the evocation of competitiveness not only deprives workers from minimum protective standards further demolishing industrial relations, but attempts to impose on Greek society a level of devastation that no person could accept.

Violation of the national general collective agreement

1. 878. The GSEE raises the following additional measures that have been taken in violation of freedom of association and collective bargaining rights:
   • ■ Freeze of the minimum daily/monthly wage in collective agreements until the rate of unemployment falls below 10 per cent. This restriction is of indefinite duration, as the negative employment trends are not forecast to change under the continuing contraction of the economy.
   • ■ Suspension of indefinite duration of the clauses of the NGCA related to the seniority (years of service), which are directly linked to the rate of the minimum daily/monthly wage as well as to the rate of the social security contributions for both the worker and the employer. This unprecedented interference by the State to unilaterally modify the outcome of national social dialogue as well as outcomes of collective bargaining set out by the NGCA, not only demolishes the unanimously agreed protective minimum standards of work, but also pushes huge groups of the working population below the poverty threshold as social security contributions and taxes are included in the gross amount of the daily/monthly wage. Furthermore, the reduction of the minimum wage erodes a series of minimum social security benefits, such as those related to unemployment, sickness, old age, family, maternity, invalidity, etc.

Violation of all collective agreements in force

1. 879. Further and cumulatively to all the measures previously imposed by the intervention of the State in the process and the content of free collective bargaining at all levels (national, sectoral, professional, enterprise), the GSEE alleges that the Government now imposes fresh measures directly interfering: (a) in the content of individual contracts affected by the scope of collective agreements (thus, legitimizing the unilateral harmful modification in pay and in conditions of work imposed by employers on workers); and (b) in the content of future collective agreements, by pre-defining the field of the collective bargaining to the benefit once more of the employer. Specifically the changes include:
   • ■ The enforcement of a maximum duration to collective agreements up to three years, regardless of the agreement by the signatory parties as regards duration and/or the application of the collective agreement.
   • ■ The mandatory expiry of collective agreements already in place, despite the fact that many of the existing collective agreements were concluded and implemented during this period by the signatory parties in full awareness of the situation.
   • ■ Simultaneous multiple intervention in any protective rule that remained in force after last year’s interventions with regard to the binding effect (direct and after-effect) of the collective agreements:
     • (i) intervention in the period of the direct binding effect, in case of expiry and renegotiation of the preceding collective agreement: the legislation hitherto in force provided for a maximum period of six months, during which the preceding collective agreement preserved its binding force, as a means to protect, in the framework of fair and in bona fide collective negotiations, the standards for pay and conditions of work included in the previous collective agreement (the so called “grace” period). This time period is now critically reduced to three months;
     • (ii) concurrent intervention in the content of the expired collective agreements along with their compulsory expiry introduced by law: the legislation hitherto in force stipulated that on the expiry of the six-month period the conditions of work set by the collective agreement shall continue to apply until the termination or amendment of individual employment contracts, as a means to protect workers (covered by the scope of the expired collective agreement) from unilateral and illegal modification of their previous working conditions (the so-called “after-effect”). According to the new provisions, if a new collective agreement is not reached in the reduced three-month period, remuneration will revert directly to the base wage. Allowances for seniority, child, education, and hazardous professions will continue to apply, until replaced by those specified in a new collective agreement or in new or amended individual contracts. This particular provision violates another key protective labour principle set out in article 7, paragraph 2, of Law 1876/1990, whereby any terms of individual contracts at variance with the clauses of a collective agreement prevail in case they provide workers with greater protection. Given the adverse impact of all the measures imposed hitherto on the conclusion of new collective agreements – in particular sectoral and professional collective agreements – this provision implies the direct abolition of a series of minimum allowances related to the nature of work such as allowances for hazardous, arduous, intense and specially responsible work, to the status of the worker (marital, parental, single parent) and to professional and/or educational qualifications;
     • (iii) suspension of collective agreement clauses that configure seniority (years of service/work) which are directly linked to the daily/monthly wage rates as well as to the social security contribution rate for both the worker and the employer, considered by the Troika objectionable because they “provide for automatic wage increases”. With Circular No. 4601/304 of 12 March 2012 the Ministry extends this restriction, not only to clauses related to the years of service, but also to any clause (i.e. promotion after evaluation process) that could be directly or indirectly connected to the rate of the minimum daily/monthly wage; and
     • (iv) elimination of clauses of “tenure” of individual contracts, which allowed dismissal only on justified grounds, and automatic conversion of such contracts of definite duration into contracts of indefinite duration for which standard lay-off procedures apply. Despite the fact that the memoranda refer to clauses of “tenure” related to contracts expiring upon age limit or retirement and usually included in collective agreements, the Act goes beyond these definitions and stipulates that any clause of “tenure”, explicit or implied, is abolished, thus leading to the abolition of any kind of stronger protection against dismissal.

Violation of the right to have access to an effective mechanism to resolve collective disputes

1. 880. The GSEE further maintains that a new radical change is introduced in the procedures and in the content of mediation and arbitration services provided by OMED which drastically curtails workers’ right of access to an effective and fair resolution process for collective disputes when negotiating collective agreements. Together with a far-reaching weakening of the mediation process, the right of workers – and employers – of independent recourse to arbitration for the resolution of collective disputes related to collective agreements is abolished. Requests for arbitration are allowed “only if both parties consent”.
2. 881. The scope of the arbitration award is restricted only to the base monthly/daily wage by an explicit prohibition to that effect imposed on arbitrators while “economic and financial considerations must be taken into account alongside legal considerations” excluding social criteria. The Act goes beyond the measures in the memoranda, as it further stipulates: (a) that the arbitrator – when and if a case is taken to arbitration – is obliged to adapt his/her decision to the need to reduce unit labour cost of about 15 per cent during the programme period as well as the competitiveness gap; (b) the arbitrator is not allowed to include in the arbitration award the “retainability clause” of the other issues of the preceding collective agreement; and (c) all the cases pending in the arbitration stage at the time Law 4046/2012 was published (14 February 2012) are compulsorily closed/archived, in sharp contrast with previous legislation which covered the entire procedure and recognized the right of both parties to have independent recourse to arbitration in case one of the parties opposed the procedure of mediation. All arbitration awards delivered during 2011 by the independent arbitrators of the new elected OMED’s arbitrators body had included the “retainability clause” justifying this decision with reference to the Greek Constitution.
3. 882. At the same time: (i) the obligation of bona fide attendance in the previous stage of mediation has already been lifted with Law 3899/2010 by suppressing the obligation to accept the mediator’s proposal before resorting to arbitration; and (ii) employers will have no interest in seeking mediation or arbitration since the above provisions ease the denunciation of the collective agreement which was hitherto binding. Employers’ bona fide participation in a new round of collective bargaining is discouraged as they can opt to stall negotiations until the expiry of the three-month “grace period” of the binding force of the collective agreement, with a view to capitalizing on the depletion of wages and the elimination of workers’ rights by law.

The case of the Workers’ Social Fund (OEE) and the Workers’ Housing Organization (OEK)

1. 883. On top of all the other provisions imposed so far eradicating almost all essential aspects of effective trade union action to protect workers’ rights, new provisions dismantle two autonomous organizations crucial to trade union social work, funding, and workers’ housing. These measures hit at the very heart of the existence of trade unions and the services they provide to workers and infringe the NGCA.
2. 884. As requested by the Troika, by an explicit provision in the new memoranda, the Government is closing down the OEK and the (OEE–Ergatiki Estia). According to the relevant Troika memorandum they fall in the category of “non-priority social expenditures” and “small earmarked funds” which should be closed down by “legislation enacted with a transition period not to exceed six months”.
3. 885. Among other unnecessarily painful cuts this particular request raises serious questions and has caused indignation as both bodies provide an indispensable social function and do not burden the state budget. The OEK and the OEE are funded by workers’ and employers’ contributions. Their mandate is directly linked to vital parameters of living such as housing, familial welfare, cultural and recreational activities for workers. Their activities have a highly developmental impact as they concern important sectors of the real economy such as tourism and construction. Both organizations are governed transparently by an administrative board where workers and employers are equitably represented and are supervised by the Ministry of Labour and Social Security that also appoints the chairperson of the board.
4. 886. The contribution rate to these two organizations set by free collective bargaining constitutes a core element of the NGCA and has never been questioned by any of the contracting parties. The abolishment of the two organizations thus also explicitly denotes a blatant interference by the State in the NGCA.
5. 887. The (OEE–Ergatiki Estia) has provided since 1937 vital social services to workers and their families including childcare services, summer camps for children, recreational and cultural services, sports, libraries, etc. The operation of the OEE, through the implementation of its statutory objective to support collective organization and action has also secured minimum finances for trade unions as a part of OEE resources, determined by objective and fixed criteria, which are allocated to support minimum operating needs of trade unions in their work. The OEE is also the main source of OMED financing, enabling the organization to preserve its autonomy vis-à-vis the State in providing independent mediation and arbitration services for the resolution of collective disputes. This aspect also raises serious questions, given the imposed measures on the disempowerment of the mediation and arbitration procedure. Contributions to the OEE until now were collected by the IKA–ETAM together with other workers’ and employers’ contributions but were not paid in full to the OEE, which delivered vital social services despite reduced resources.
6. 888. The abolition of the OEE will have a disastrous impact on the operation of trade unions as the wholly indispensable staff they employ face dismissal. The GSEE further refers to the important social services, such as nurseries and recreational programmes, which will be closed down as a result.
7. 889. Similarly the OEK has catered to workers’ housing needs and provided affordable first homes, favourable loan terms, repairs to old housing units, as well as first home rent subsidies for low-income workers since 1954. Since its foundation the OEK has constructed about 50,000 homes across Greece and accommodated or provided housing assistance to more than 700,000 families. Over the last decade it has subsidized 80,000 housing loans mainly to low-income workers and provided rent subsidies of €1.13 billion to low-income workers. The closure of the OEK will have disastrous and harmful effects for workers and their families: 120,000 families will be deprived of vital rent subsidies that provide relief to working people under critical current conditions of steeply deteriorating living standards; 10,000 loans per year granted for purchasing or repairing a house will be terminated; construction programmes in progress are suspended; 1,600 poor families will see their hopes to own a home evaporate over the next few months. All loans disbursed from the OEK’s capital reserves and debts due to the organization from already allocated houses which translate into a total amount of €1.2 billion remain in abeyance. The payment of interest rate subsidies for bank loans also remains in abeyance. Some 83,000 loans have been granted in total, raising concern as to how beneficiaries will repay these loans when the OEK stops paying interest rate subsidies.
8. 890. The GSEE expresses its indignation at the fact that in a period where the social state is being demolished and nearly 30 per cent of the population has shifted below the poverty line, the services of two crucial organizations are abolished through their “downgrade” by the memoranda as “non-priority social expenditures”. This decision reveals an overt hostility towards trade unions starting with the GSEE as it will effectively impede trade union work, delegitimize social work by trade unions and contest the autonomy of trade unions to determine the management of worker contributions.

Social dialogue

1. 891. The GSEE underlines that, since the signing of the first memorandum in May 2010, gradually and deplorably social dialogue is being demolished and replaced by authoritarian unilateralism that renders the role of the national social partners redundant. In addition to the matters already raised, the GSEE highlights that the decision to proceed unilaterally to legislation in full disdain of the social partners was predated and predetermined with the Government already committed to do so regardless of the outcome of the social dialogue. Both the draft wording of the memorandum and its final wording reveal the value the Troika ascribes to the social partners. In the first instance, it states that if social dialogue is “unsuccessful in identifying concrete solutions by end-February”, the Government will take legislative measures in the urgent public interest and, in the second instance, that social dialogue “fell short of expectations” justifying the intervention. Moreover, Law 4046/2012, describes provisions on labour market structural reforms as “complete rules of law with direct effect” implying their immediate applicability. In this light, passing references to “social dialogue” in the relevant texts is pretextual and misleading, since the measures in question are already adopted and will be directly implemented.
2. 892. These measures unequivocally expose the repeated non-compliance by the Government with the request of the Committee on the Application of Standards in June 2011 to intensify efforts so as to “undertake full and frank dialogue with the social partners to review the impact of the austerity measures taken or envisaged with a view to ensuring that the provisions of Convention No. 98 are fully taken into account in future action”. The GSEE emphasizes that in the current circumstances prevailing in Greece that most sorely test social cohesion, the demolition of social dialogue is inefficient, undemocratic and ultimately dangerous.

B. The Government’s replies

1. 893. In its communication dated 16 May 2011, the Government indicates that it is confident that the legislative measures taken in 2010 do not violate the workers’ fundamental rights as they are stipulated in Conventions Nos 87, 98 and 154.

I. The Greek financial crisis and the legislative measures taken for the regulation of industrial relations in order to support the Greek economy

1. 894. Despite the euphoria created by the economic globalization during the 1990s and more specifically the one created among the Member States of the EU by the monetary union and the creation of the Eurozone through the introduction of the euro in 2001, the international financial crisis of 2007–08 was very threatening. It has created recession conditions, increased unemployment and threatened the stability and quality of industrial relations in the whole world as well as the Eurozone area.
2. 895. In 2009, Greece entered a period of severe financial crisis. The main characteristic of the crisis is the extremely high deficit which in 2009 was 13.6 per cent of GDP and the public debt was over 115 per cent of GDP, while the cost of public borrowing became so excessive that the country faced severe pressures inhibiting its ability to receive a loan. During the first months of 2010, the country was faced with serious financial problems, which cannot be resolved easily.
3. 896. To this end, a financial support mechanism was developed at European level between February and April 2010, in order to avoid the hazard. The solution to the crisis was the recourse to the international support mechanism through an international loan. The loan to Greece amounts to €110 billion, €80 billion provided from bilateral loans by the EU Member States and €30 billion from the IMF. It was provided for that this loan would be granted in instalments, while the first instalment of €30 billion would be granted within 2010. The terms of the loan agreement between Greece and the European Commission, the European Central Bank and the IMF were accompanied by a programme of fiscal measures and other economic policy objectives aiming at the recovery of the Greek economy. The loan conditions were stipulated in the memoranda attached to it and ratified by article 1 of Law 3845/2010. The programme for the reduction in public expenses and the enhancement of the competitiveness of the Greek economy were linked with the terms of the disbursement of the loan while articles 2, 3, 4 and 5 included the necessary structural and fiscal arrangements.
4. 897. The terms of the memoranda have the following objectives:
   • (a) the elimination of the root causes of the debt crisis that Greece is facing, by means of implementing adequate measures and policies restoring the fiscal stability, so that the State might stop spending more than it collects;
   • (b) the improvement of the competitiveness of the Greek economy, so that the country might stop importing more than it exports;
   • (c) the creation of conditions for a sustainable public debt management, so that the Greek Government might continue to finance its borrowing needs through the financial markets, which the memoranda, through their overall planning, are helping it to return to; and
   • (d) the restructuring of the national social security and financial system, which threatens the sustainability of the Greek economy.
5. 898. Taking into account the above, the fiscal restrictions and the flexibility of industrial relations were considered as necessary in order to support the Greek economy as well as the sustainability and competitiveness of enterprises; objectives which are pursued by taking measures for the balanced safeguarding of workers’ rights as well. These measures taken by the Greek Government include the restructuring of the legislation on wages and the wage policy.

II. Measures of the Greek Government to tackle the economic crisis

1. 899. Within the first quarter of 2010, the Greek Government attempted to deal with its economic crisis caused by the high public debt, by reducing public expenditure and improving the effective collection of public revenue. In order to reduce public debt the Government, inter alia, reduced the wages of workers in the whole public sector in order to achieve the immediate and absolutely necessary reduction of fiscal expenditure. The measures taken in the first quarter of 2010 have not proven to be adequate to tackle the national economic crisis. The loan facility agreement introduced further systematic measures for the recovery of the Greek economy. These measures are fiscal, aiming at the immediate reduction of public expenses and the improvement of public revenue collection, and structural, aiming, inter alia, at the sustainability and competitiveness of Greek enterprises in general and the fight against unemployment. The measures taken by the Greek Government are the following:
   • First: General and uniform reduction of wage labour costs in the whole public sector for all civil servants employed in public services and for all workers bound by a dependent working relationship employed in all public services and all kinds of public undertakings. These measures have been taken by virtue of Law 3833/2010, Law 3845/2010 and Law 3899/2010.
   • Second: General and uniform restriction on the increase in wages by means of collective agreements or arbitration awards for the employees in all kinds of legal entities in the public sector (all civil servants and workers bound by a dependent working relationship who are employed in all public services and public undertakings). These measures have been taken by virtue of Law 3833/2010 and Law 3899/2010.
   • Third: Measures for the reduction of the labour cost and the increase in flexibility of industrial relations. The objective of these measures, taken by virtue of article 2 of Law 3845/2010, Law 3846/2010, article 74 of Law 3863/2010, and articles 13 and 17 of Law 3899/2010, was to strengthen the sustainability and competitiveness of the enterprises, in order to maintain employment and this in turn will help to revive the national economy. These measures are considered not to reduce the extent of legal protection of workers’ interests, and not to affect the core of fundamental workers’ rights within the framework of the principles of the welfare state and international and European law.
   • Fourth: Structural rescue measures for the social security system. The objective of the measures taken by virtue of Law 3863/2010 was to safeguard the sustainability of social insurance funds and included redesigning of the pension benefits and of the preconditions for the securing of pension rights.

III. General assessment of the impact of the Greek financial crisis on the fundamental trade union rights and the freedom of collective bargaining

1. 900. The Government emphasizes that the new legislation did not violate the minimum standards on freedom of association and the protection of the right to organize. No restrictions or prohibitions have been introduced concerning the freedom of collective bargaining in the private sector and this right has not been violated. Regarding the public sector, any legislative restrictions introduced were dictated by the financial crisis Greece is faced with, with an apparent duration up to 2012–13.
2. 901. However, during the whole period of the economic crisis, the Greek Government continues to strongly support the full and continuous implementation of trade union rights, the dialogue among the social partners as well as between the social partners and the Government, and the freedom of collective bargaining, which constitute essential factors for the safeguarding of social cohesion in order to exit from the financial crisis.

Freedom of collective bargaining in the Greek national law

1. 902. The Government first emphasizes that freedom of association and trade union action, as well as collective bargaining freedom, are protected by the Greek Constitution, the specific national legislation and the international labour Conventions Nos 87, 98 and l54, which have been ratified by law and prevail over any contrary legal provision, in accordance with article 28 of the Constitution, as well as by Law 1264/1982. The Greek Constitution establishes general protection for freedom of association and specific protection for the freedom of trade union action and the freedom of collective bargaining. Within the framework of these constitutional rules, freedom of association is regulated by Law 1264/1982, whereas freedom of collective bargaining is regulated by Law 1876/1990 for all workers bound by a dependent working relationship in the public and the private sector and by Law 2738/1999 for the civil servants of the public administration.
2. 903. The freedom of collective bargaining as regulated by Law 1876/1990, is mainly characterized by the statutory enforceability of collective negotiations, i.e. the immediate and binding application of the terms of the collective agreements within their scope of application; the principle of favourability for workers applies, thus the terms of the individual contract of employment prevail over collective agreements and the law, only if they are more favourable for the employee. The same favourability principle applies also in case of concurrent implementation of the NGCA with any other collective agreement, or in case of concurrent implementation of sector and enterprise-level collective agreement. Furthermore, it is provided for that the minimum monthly and daily wage are regulated by the NGCA, which will prevail over other, possibly less favourable, terms of occupational, sectoral and enterprise collective agreements. Finally, as has been mentioned above, the binding character of the more favourable terms of sectoral collective agreements ranks higher in hierarchy than possibly less favourable terms of enterprise collective agreements. These regulations are consistent with the international guarantees regarding the exercise of trade union rights and the freedom of collective bargaining. The Government recalls in this regard that Article 2, paragraph 7, of Law 3845/2010, establishes, on the basis of Law 1876/1990, the ability to determine working terms by means of occupational, enterprise-level and sectoral collective agreements; it is possible that the said agreements might deviate from each other as well as from the NGCA. According to the Government, this regulation in no way affects the freedom of collective bargaining, since every collective agreement has statutory enforceability among those represented by the contracting parties. This regulation does not contravene the representation principle for the binding effect of a collective agreement and stresses the possibility of deviation among the different types of collective agreements.
3. 904. In view of the current financial crisis, the Greek Government considered that the system of collective agreements, provided for by Law 1876/1990, must promote decentralization of collective bargaining through a new type of enterprise-level collective agreement, aiming mainly at the support of the sustainability and competitiveness of the enterprises which are faced with serious economic pressure. To this end, the Government has brought to the attention of the social partners its proposal and, following the dialogue conducted among them from October to November 2010, a new form of enterprise labour collective agreement was established under article 13 of Law 3899/2010, the special enterprise labour collective agreement. The said labour collective agreement may include terms relating to the organization of working time, the number of jobs to be preserved, the conditions of part-time work, shift part-time work, suspension of work, and any other terms of implementation, including its duration and the wages, which may deviate from sector collective agreements but not from the NGCA. These provisions strengthen the freedom of collective bargaining and do not constitute an impediment to this freedom or an intervention by the State.
4. 905. Pursuant to article 2, paragraph 6, of Law 3845/2010, the Government explains that the minimum wage provided for by the NGCA does not apply, as an exemption, to unemployed persons under 24 years of age, who conclude apprenticeship contracts of up to 12 months’ duration and their minimum remuneration is rather set at 80 per cent. Under article 74, paragraphs 8 and 9, of Law 3863/2010, the remuneration offered to the new entrants to the labour market up to the age of 25, is set, as an exemption, at 84 per cent of that provided by the NGCA, while the remuneration offered to young persons aged between 15 and 18, who conclude yearly apprenticeship contracts, is set at 70 per cent of that provided by the NGCA. These minimum wage rates paid to young persons below the age of 25 have been stipulated by the law in connection with the subsidization of the social insurance cost and the purpose of the specific labour contracts, taking into account the lack of professional experience of young persons and the need to offer incentives for its acquisition. In addition, the minimum wage is expressed as minimum wage rates determined by the NGCA, therefore, such minimum wages follow the dynamics, as defined by means of free collective bargaining on national level. Finally, the said regulations are necessary for the restructuring of the labour market and the fight against youth unemployment and they are imperative, irrespective of the current financial crisis, which renders them urgent. These provisions constitute necessary employment policy measures to combat youth unemployment and do not contravene the freedom of collective bargaining nor infringe fundamental trade union rights.
5. 906. The Government further confirms that, pursuant to article 1, paragraph 5, and article 3, paragraph 1, of Law 3833/2010, and article 3, paragraph 4, of Law 3845/2010, the wages paid to persons employed in the public sector have been reduced and it has been prohibited to reach an agreement upon a clause relating to the increase in workers’ wages based on terms of labour collective agreements.
6. 907. The Government emphasizes that this legislative policy is unprecedented in Greece, as is the financial crisis affecting the country’s economy. The complexity of economic and political issues, the political consultations with international organizations (EU and IMF) and the EU Member States and, generally, the conditions, under which the European support mechanism for the Greek economy has been formulated, did not allow prior consultation with trade union organizations. The urgent need to reduce public spending in the year 2010 included the need for reduction of the labour cost for the civil servants and all persons bound by private contracts of employment in all kinds of public undertakings. This need would not be promptly and harmoniously achieved through collective bargaining that would result in revision of the total of collective agreements.
7. 908. The Greek Government according to the Constitution is obliged to consolidate social peace and protect the general interest, by means of planning and coordinating the economic activity of the country (article 106, paragraph 1) and guaranteeing the rights of the human being as an individual and as a member of society aiming at achieving social progress and national solidarity, while in cases where it can restrict these rights, it has to respect the principle of proportionality (article 25, paragraph 1). Paragraph 2 of article 106 provides that “Private economic initiative shall not be permitted to develop at the expense of freedom and human dignity or to the detriment of the national economy”. The Government considers that Conventions Nos 98 and 154 cannot be considered as violated in this context as the national economic crisis is exceptional and grave.
8. 909. The compatibility of these measures with the domestic legal order and especially with the Constitution, as well as the international Conventions for the protection of civil and social rights, has been decided upon by the Supreme Administrative Court of the country, the Council of State, following the complaints of individual employees and trade unions, the GSEE included. The Council of State was due to deliver its decision very soon, since the hearing was held in November 2010. However, the proposal of the judge upon the constitutional compatibility of the legislative measures reducing wages of the employees in the public sector recommended that the measures taken: “... are justified by overriding reasons of public interest pertaining to the reduction of the excessive fiscal deficit and the external debt of the country, in view of the obligations undertaken by the country within the framework of the Economic and Monetary Union. Besides, in order to achieve the objective of fiscal adjustment, legislative measures have already been adopted concerning not only restraint of expenditure in general but also measures to increase fiscal revenues ...”. The Council also stressed that “... measures for fiscal adjustment have been taken in order to deal with the acute fiscal crisis which had made impossible the serving of the loan needs of the country through the international markets ...” and that “... the provisions at issue, through which intervention on property rights has taken place, in principle, ensure an equitable balance between the requirements of the general interest and the need for protection of the fundamental human rights ...”.
9. 910. For the private sector, the Government stresses that there are no legislative regulations on the reduction of earnings defined by the terms of collective agreements, nor are there other restrictions on the freedom of collective bargaining. The proper application of the freedom of collective bargaining in the private sector is manifested by the NGCA, signed on 15 July 2010 for the years 2010, 2011 and 2012, for the following reasons:
   • ■ The collective bargaining was long and has been affected by the emerging dramatic dimensions of the national financial crisis in the last quarter of the year 2009, which peaked from January 2010 onwards.
   • ■ Consultations have been conducted under the shadow of Law 3833/2010, which provided for reductions in wages paid to civil servants and to persons employed across the whole public sector and under the shadow of Law 3845/2010.
   • ■ The said collective agreement has been concluded, taking into account the financial developments and the economic measures that gave rise to sharp political disputes and caused long lasting workers’ strikes and the strong reaction of employers’ organizations against disturbance of industrial peace and the future of enterprises.
10. 911. The terms of the NGCA did not provide for an increase in wages for the year 2010, but regulated limited increases at the level of the average euro-inflation of the previous year for the period from 1 July 2011 to 31 June 2012 and from 1 July 2012 onwards. The NGCA 2010–12 had a strong political impact upon the terms of all the collective agreements in the country that were concluded in 2010.
11. 912. As regards the resolution of the National Commission for Human Rights, the Government indicates that the national law may stipulate and amend the social rights, including the workers’ rights, either by improvements or restrictions, according to the evolving socio-political conditions, observing always the core of the international law, including the ILO standards. The Government considers that the resolution does not demonstrate a violation of human rights due to the severity of the measures taken, but rather expresses reasonable concern for the risks created by the economic crisis and emphasizes the need to apply the principle of proportionality.
12. 913. In conclusion, the Government remains firmly committed, under the current economic crisis, to the protection of human rights and considers that trade union rights and freedom of collective bargaining covered by ILO Conventions support social cohesion and are absolutely necessary in times of crisis along with the policies of the Government. The exit from the financial crisis has imposed the need to take structural measures in the field of industrial relations. The measures taken were proportional to the severity of the unprecedented economic crisis and, according to the opinion of the Government, do not constitute violations of ILO Conventions, nor do they infringe fundamental workers’ rights that are guaranteed by other international Conventions.
13. 914. The Government considers in particular that the views of the GSEE have raised unjustified concern and represent political estimations concerning the possible discouragement of workers from becoming members of trade union organizations. The Government considers that the freedom of the trade union movement as well as its political role must be developed freely in the social environment without legislative and administrative interventions by the Government. This fact does not exclude the Government from taking policy measures on minimum wage standards and labour conditions, in general.
14. 915. Moreover, the supplementary regulation on minimum wage standards by the State through measures for the fight against youth unemployment is an expression of the obligation of the State to protect public interest and does not contest the role of collective agreements. And finally, the legislative measures on labour conditions supporting the sustainability and competitiveness of enterprises are perfectly compatible with the freedom of collective bargaining as well as the terms of the collective agreements.
15. 916. In its communication dated 16 May 2012, the Government emphasizes that its main obligation pursuant to the terms of the memoranda was the restructuring of the labour market with the aim of improving the competitiveness of the Greek economy. Respective measures have been included in the Medium-term Fiscal Strategy Framework 2012–15 as well as in the new loan agreement of 9 February 2012. The terms of the memoranda have been taken into account in the ILO High-level Mission report of 23 November 2011, which acknowledged the challenges faced by Greece and the impact of the Troika policies on the implementation of the international labour standards. The Government highlights that, according to the report: “The High-level Mission has been left with the impression that unprecedented changes are being introduced in the Greek labour market institutions in a manner which seems disconnected from Greek realities, thereby weakening, among other things, the impact and real effects of reforms”. The acute economic crisis in Greece is constantly worsening and, according to the figures of February 2012, has reached €368 billion, i.e. in excess of 169 per cent of the GDP. The largest portion of the debt expires in the next few years, thus the fulfilment of direct cash needs is imperative. The said debt evolution resulted from the high interest rates on loans that prevailed and continue to prevail on the world market. The debt restructuring imposed, inter alia, a drastic reduction in public spending and, at the same time, drastic reductions in the wages both in the public and private sectors, thus creating conditions of increasing economic downturn. The need to address these issues led to more drastic measures for the restructuring of the labour market. To a large extent, these measures were the prerequisite steps for the conclusion of the loan agreement of 9 February 2012.
16. 917. In this context, the Government stresses its firm commitment to the observance of international labour standards and states that the financial crisis and the international economic environment reduce the quality of labour rights, redefining the concept of core labour rights in an economically developed country, which will necessarily reduce the quality of life of its citizens. The loan conditions of the Government and their association with the drastic restructuring of the institutional framework of industrial relations constitutes an unprecedented challenge for Greece and the international community, a fact that has been noted both by the High-level Mission and the Committee of Experts. The international organizations that are offering financial aid to rescue the Greek economy have chosen to implement measures that will enhance labour market flexibility. The said measures are considered as the most appropriate method to enhance the competitiveness of the Greek economy.
17. 918. The abovementioned policy of industrial relations flexibility, aiming at the strengthening of the competitiveness of the Greek economy, was planned by the Troika in the first memorandum. Its last updated version led to the adoption of legislative measures in October 2011 and, more specifically, to article 37 of Law 4024/2011. Then, the second memorandum of 12 February 2012 followed, pursuant to which additional legislative measures have been taken with a view to restructuring the collective bargaining system, under article 1, paragraph 6, of Law 4046/2012, through the adoption of Cabinet Decree (PYS) No. 6/12. According to the ILO High-level Mission report, which refers to the measures of the period from May 2010 up to and including October 2011, all these measures have the following characteristics, as regards their planning and content:
    • (a) their planning is the result of the Troika economic policy choices to which the Greek Government had committed, with a view to strengthening the competitiveness of the Greek economy;
    • (b) the Greek Government exercised its influence to maintain the core workers’ rights; and
    • (c) the social partners had no time left to develop common positions for the required structural changes, while on issues for which they directly presented common positions, such as maintaining the extension of collective agreements and the principle of favourability, they were against the crucial choices of the Troika.
18. 919. All the above led to important political changes from November 2011 up to the parliamentary elections of 6 May 2012, a fact that did not allow the Government to submit a comprehensive opinion on the issues raised by the GSEE in the supplementary information to its complaint. Moreover, the socio-political scepticism concerning the effectiveness of the abovementioned legislative measures has been reflected in the outcome of these parliamentary elections, thus increasing the uncertainty regarding labour market restructuring in Greece.
19. 920. In light of the above, the Government considers that the new and further intervention in the system of collective bargaining, in the formulation and the content of labour collective agreements and the existing collective labour dispute resolution system through OMED have come about due to the dire economic situation of the country. The measures taken include a partial restructuring of the free collective bargaining system, so that the core of trade union freedom and of collective bargaining might not be affected.
20. 921. As regards special firm-level agreements, which were only in force for the time period between the entry into force of Law 3899/2010 (17 December 2010) and of the new Law 4024/2011 (27 October 2011), 14 special firm-level collective agreements were submitted to the competent authorities. The temporary establishment of a new level of bargaining and of a respective type of collective arrangement, required the prior exhaustive bargaining among the competent and adequate workers’ and employers’ trade union organizations, in accordance with the relevant provisions of Law 1876/1990. In this way, the freedom of bargaining of the parties concerned was protected and State intervention in the bargaining process was prevented, strengthening, thus, collective autonomy.
21. 922. Law 4024/2011 not only repeals paragraph 5A of article 13 of Law 3899/2010, but, for the first time, provides that, in case there is no trade union organization in the company, an “association of persons”, that already exists or is established for this purpose by at least three-fifths of the company’s workers, is competent to conclude a firm-level labour collective agreement. Certainly, the employer may also conclude (firm-level) labour collective agreements irrespective of the number of workers employed in his/her enterprise. This association of persons is established, as explicitly provided for by the legislator, irrespective of the total number of the company’s workers and its duration is not subject to any time limitation.
22. 923. Also, as it is pointed out in the relative interpretative circular of the Ministry of Labour (Ref. No. 819/50/164-2012), the dialogue procedure is facilitated through the associations of persons, given that the workers and employers at enterprise level are provided with the ability to conclude firm-level collective labour agreements, mainly in enterprises in which, to date, no trade union organization operated. Firm-level collective labour agreements are concluded, in order of priority, by trade union organizations of the enterprise that cover the workers or, in the case that there is no trade union organization in the enterprise, by an association of persons, and, in any event, irrespective of the category, the post or the specialty of the workers in the enterprise, and if these are lacking, by the respective primary sectoral organizations and the employer. Priority is given to the negotiations between the employer and the representatives of the workers at enterprise level, and, in the case that they cannot be carried out at that level, the law provides for the carrying out of negotiations at sectoral level. At least three-fifths of the workers in the enterprise are required to draw up an instrument of establishment. Hence, the minimum number of workers required for the establishment of an association of workers is five. The instrument of establishment must refer to the aim, and at least two of the workers’ representatives, who are determined following an election that is carried out by a three-member election committee.
23. 924. In accordance with paragraph 4 of article 14 of Law 1264/1982, the termination of a working relationship on the grounds of lawful trade union action is null and void also for the members of associations of persons. Finally, in accordance with the provisions of article 20, the associations of persons may exercise their right to strike following a decision, by means of a secret vote, of the majority of the workers in an undertaking, enterprise, public service, public body corporate or local self-government agency. By means of this clarification, the associations of persons that acquire the right to collective bargaining, as it was previously mentioned, although they already had the right to call a strike, now constitute particular trade union organizations. Therefore, no issue of competition or limitation of trade union rights is raised; on the contrary, these are extended with a view to enhancing the decentralization of collective bargaining. Given the above, the trade union movement, taking into account the potential to decentralize collective bargaining as provided for by the law, as well as the full protection of the freedom of association, has the ability to make policy which will cover the complexity and recruit the total of trade union organizations.
24. 925. The reinforcement of the decentralization of collective bargaining was included in the measures suggested by the Troika; measures that aim to strengthen the competitiveness of the Greek economy, a matter that was of direct interest to the Greek Government as well. Towards this direction, it was deemed essential by the Troika to suspend the extension of collective labour agreements and the principle of favourability in case of concurrent implementation of sectoral and firm-level collective agreements throughout the period that the Medium-term Fiscal Strategy Framework is in force, despite the fact that their retention had been an issue of political agreement of the social partners. However, the crucial economic circumstances led to the taking of the following measures, the effectiveness of which is under continuous monitoring.
25. 926. By virtue of article 37, paragraph 5, of Law 4024/2011, in case of concurrent implementation of sectoral and firm-level labour collective agreements, the firm-level labour collective agreement prevails and it should not contain working terms that are less favourable for the workers than the ones included in the NGCA. In this way, collective bargaining at firm level, which is obviously conducted under the special financial conditions of every individual enterprise, regulates the pay and working conditions without going below the (minimum) wage and safety level provided for at the national level. More specifically, as far as the extension of collective labour regulations is concerned, article 11 of Law 1876/1990 provides that sectoral and occupational collective agreements that are binding on 51 per cent of the workers in that sector or occupation are extended, by decision of the Minister of Labour and Social Security, following a request made by the trade union or employers’ organization bound by it. The purpose of this regulation is to create conditions of healthy competition among businesses as regards labour cost, provided that the non-directly bound businesses could be members of the bound employers’ organization. The provision of paragraph 6 of article 37 of Law 4024/2011 suspends the application of the above provisions with a view to strengthening the flexibility of industrial relations, without any commitments for the workers and the employers that are not directly bound by the terms of labour collective agreements.
26. 927. Regarding the “associations of persons” and more specifically their connection with the working-time arrangement system, the Government indicates that article 42, paragraph 6, of Law 3986/2011 provides:
    • The working-time arrangement, mentioned in paragraphs 1 and 2, is determined through firm-level labour collective agreements or through an agreement between the employer and the trade union of the enterprise, concerning the members of the latter, or between the employer and the works council or between the employer and an association of persons. The association of persons, mentioned in the previous section, may be formed by at least 25 per cent of the personnel of an enterprise that employs more than 20 workers or by 15 per cent of the personnel, provided that the total number of workers is 20 persons at the most.
27. 928. Law 1264/1982 also recognizes associations of persons as trade union organizations under certain conditions. Consequently, not only is the employer’s obligation to enter into negotiations with the trade union organization of the enterprise not repealed, but also the works council or the association of persons is given the possibility to enter into negotiations with the employer, with a view to reaching an agreement.
28. 929. Firm-level collective labour agreements are submitted to the competent labour inspectorate, according to article 5 of Law 1576/1990. It also has to be noted that a different system of working-time arrangements, depending on the sector or the undertaking, may be determined through firm-level or sector-level labour collective agreements. The changes adopted by virtue of article 42 of Law 3986/2011 aimed mainly at making the arrangement system more flexible and effective to enhance enterprise competitiveness without waiving the collective bargaining process which characterizes it and is necessary for its implementation. The Government affirms that these provisions meet the needs of enterprises to adapt to market conditions, with the aim of creating or maintaining jobs as well as of improving their productivity and competitiveness. Moreover, they enhance economic competitiveness and employment promotion and contribute to the creation of a stable and secure working environment for the workers.
29. 930. The Government further refers to article 14 of Law 3899/2010, whereby articles 14–17 of Law 1876/1990 concerning the collective dispute resolution system through mediation and arbitration have been amended. The main amendments to the collective disputes resolution system are the following: (a) unilateral appeal to arbitration by any party, after the submission of the mediation proposal, as long as both parties presented themselves and participated in the mediation procedure; (b) setting up of a three-member arbitration committee, at the request of any party; (c) determination of judicial assessment process of arbitration awards validity; (d) restriction of the arbitrator’s jurisdiction in the determination of the minimum salary and wage only; and (e) assessment of the collective disputes resolution system after three years by the social partners involved in the drawing up of the NGCA and submission of proposals on its maintenance, amendment or abolition.
30. 931. More specifically, the suspension of the right to strike for ten days was also provided for by article 16, paragraph 2, of Law 1876/1990 with a view to creating an environment of understanding among the social partners also during the arbitration process when the arbitrator seeks the drawing up of a labour collective agreement and issues an arbitration award only in case of failure of such drawing up. It is obvious that since the jurisdiction of the arbitrator is restricted to determining the minimum salary, while the rest of the questions are open to bargaining, the suspension of the right to strike concerns any strike for the determination of the minimum salary and wage.
31. 932. The same Act provides for the strengthening of the social partners’ role in the administration and operation of OMED, more specifically, their participation in the selection of mediators and arbitrators is enhanced. It is clearly provided for that, for the selection of OMED’s board of directors and the renewal of their tenure, the unanimous decision of the social partners’ representatives is required. The organization is now administered by a seven-member board of directors consisting of six social partners’ representatives (GSEE, SBB, GSEVEE, ESEE) and a chairperson, who is elected unanimously by them.
32. 933. By virtue of the recent legislative regulation of article 1, paragraph 6, of Law 4046/2012, which was made more specific by Cabinet Decree No. 6/12, the following changes to the collective disputes resolution system have occurred: (a) the recourse to arbitration requires only the mutual agreement between employers and workers and, therefore, the right to unilateral recourse is abolished both for the employers and the workers; and (b) it is confirmed that the jurisdiction of the arbitrator is restricted to determining the minimum salary and wage through express reference to the exclusion of an arbitration award clause that keeps in force previous collective regulations. These amendments confirm the State’s determination to strengthen the voluntary character of the collective labour dispute resolution system, in accordance with the provisions of Convention No. 154, as well as to enhance direct collective bargaining among the social partners.
33. 934. In addition to the above, the following new regulations have been added to the collective agreements system: (a) the maximum validity period of labour collective agreements has been determined by law at three years and collective agreements of indefinite duration have been abolished; (b) the duration of collective agreements’ after-effect has been restricted from six to three months following their expiry or termination; (c) the collective agreements’ terms which are maintained after the period of their after-effect as terms of individual employment contracts have been restricted to the basic salary and the seniority, child, university degree and hazardous work benefits; (d) the employer’s right to unilaterally adjust the terms of individual employment contracts has been established in accordance with the above in point (c); and (e) the minimum salary and wage provided for by the NGCA of 2010 have been reduced by 22 per cent and the employer has the right to unilaterally adjust the individual employment contract.
34. 935. As regards the allegations concerning apprenticeship contracts, article 43 of Law 3986/2011 provides that: “young persons aged 18–25, in order to acquire work experience, may conclude employment contracts with employers of up to 24 months’ duration. Their remuneration will be up to 20 per cent less than the one provided for a newly employed person of the same specialty without previous experience, as it is provided for by the applicable labour collective agreement (occupational, sectoral, firm-level or national general). They will be insured with the IKA–ETAM for pension, health care services (provisions in kind) and against occupational hazards and the insurance contributions will be paid by the employer to the IKA–ETAM.” The Government stresses that these agreements do not constitute apprenticeship contracts, but rather are fixed-term contracts of employment to acquire work experience.
35. 936. The Government refers to the OECD Jobs for Youth report, which advocates the facilitation of young persons’ entrance into the labour market, by introducing a lower salary. According to the report, the solutions proposed for the elimination of obstacles concerning the demand side as well as the reduction of costs incurred by the recruitment of young persons without experience, are either the introduction of a lower salary or the reduction of non-wage costs for new employees, whose remuneration is close to the minimum salary.
36. 937. The Government points out that an employers’ subsidy programme is being implemented by the Manpower Employment Organization, according to which the insurance contributions for pension, health-care services and occupational hazards of young persons aged 16–24 are 100 per cent subsidized. Based on the latest data given by the Hellenic Labour Inspection Body (SEPE) (beginning of January 2012) and the contracts submitted to the labour inspectorate services in the whole country, the number of fixed-term employment contracts of young persons aged 18–25 for the acquisition of work experience amounts to 181.
37. 938. As regards the new pay scale in the public sector, the Government informs that Chapter Two of Law 4024/2011 conforms with the following principles: (a) the principle of fiscal adjustment, the observance of which has become a matter of crucial importance for the economic and political survival of the country in an international environment; (b) the principle of smooth functioning of the administration which is directly associated with the hierarchical classification of the levels of responsibility in the exercise of competences as well as with its performance measurement system; (c) the principle of equality and meritocracy as well as party neutrality, safeguarded through the connection between, on the one hand, the hierarchy according to the servant’s grade and wage promotion and, on the other, his/her typical and essential skills and performance which is assessed on equal terms for every individual, taking into account the graded individual level of responsibility as well as the specific working conditions under which the employees exercise their duties with the aim to achieving the smooth functioning of the service or the body to which they belong; and (d) the principle of ensuring the highest possible standard of employees’ performance with a view to serving the public interest.
38. 939. More specifically, the provisions of Law 4024/2011 introduce an assessment system based mainly on the objectified performance measurement – both of the organizational unit of the service or body concerned as well as of the employee who works in the said service or body – depending, on the one hand, on the level of classification of the unit concerned and, on the other, on the employee’s grade. It is also directly associated with the system of promotion as far as their grades and salaries are concerned. Thus, the achievement of performance goals higher than the intended ones becomes the key requirement for the employees to be entitled to assessment, promotion and selection for posts of responsibility at any administrative level. Moreover, the provisions of the same Act provide for the association of promotions as far as grades are concerned with the system of emoluments and the wage promotion of the employees.
39. 940. Moreover, it has to be clarified that within the framework of a more rationalized operation of the public administration, by virtue of article 35 of Law 4024/2011, the restructuring of public services and the subsequent reallocation of permanent posts has been provided for. The said regulation aims at controlling the current organizational structure of public services, in order to identify units with clearly limited scope of activities or units with surplus staff or lacking staff in relation to the competences exercised by the unit, and then proceeding to the necessary reallocation of posts.
40. 941. Furthermore, the provisions of articles 33 and 34 of Law 4024/2011 on the ipso jure dismissal, the pre-retirement suspension of work and the labour reserve constitute special provisions established under specific fiscal conditions. With these measures the country observes its commitments to the lenders–partners, in order to reduce public expenditure. Fundamental labour rights are ensured, mainly protecting those workers who are close to retirement and mitigating the effects of employment contracts termination for those workers who are put on labour reserve. For the said workers the insurance coverage, both of the employer and the worker, is borne by the employer for a period of 12 months, while they are paid 60 per cent of their basic salary with no obligation to provide work.
41. 942. The major benefit of these provisions is the fact that immediate organizational, operational and fiscal results are being guaranteed with the aim of achieving the strategic goal of reducing the state as well as public expenditure without causing upheaval in the lives of the personnel working in the public administration and the broader public sector.
42. 943. The Government further emphasizes that the provisions of the new pay scale aim at further rationalizing, simplifying and mitigating the differences of the pay system that applied until now to the public administration personnel. More specifically, the new pay scale:
    • ■ Incorporates to the basic salary part of the benefits paid until today.
    • ■ Associates the grade of the employee with the respective salary. The employees are classified in four categories, depending on their typical skills (university education, technical education, secondary education and compulsory education). The employees are promoted to the grades provided for each category. A basic salary corresponds to each grade. In addition to the basic salary, for each grade there are pay steps.
    • ■ Repeals all kind of benefits, provisions, compensations and determines the benefits that will be paid, provided that certain terms and conditions for their payment are met.
    • ■ Repeals the family benefit (spouse) while increases the benefit for the employee’s dependent children.
    • ■ Increases the benefit provided for a post of responsibility.
    • ■ Provides for the incentive for the achievement of goals, an amount granted to the employees who achieve 90 per cent of the goals set for the service they work in.
    • ■ Provides for a maximum limit of 20 hours monthly as overtime work, which is paid.
    • ■ Sets limits on compensation paid to collective bodies.
    • ■ Defines the salary cuts in all cases of an employee’s absence.
    • ■ Sets the remuneration paid to employees who are seconded or transferred from their services.
    • ■ Defines the way the disparities in earnings resulting from the implementation of the new act will be paid.
    • ■ Finally, it provides that, from 1 November 2011, the personnel bound by contracts of indefinite period under private law, that is employed in the public sector, the local self-government agencies of A’ and B’ degree and in other public bodies corporate and paid under labour collective agreements or arbitration awards or joint Ministerial Decisions until the second chapter of Law 4024/2011 was put in force, will be paid according to the provisions of the said law.
43. 944. As regards the allegations on the new income and tax measures changing for the worse the scales for the calculation of income tax, the tax on capital and value added tax rates, the Government points out that article 38, paragraph 2, of Law 4024/2011, replaced article 9 of the Income Tax Scale. A new progressive income tax scale with fewer brackets and a tax-free threshold at €5,000 has been established. This change was due to the crucial fiscal situation of the country in order to be able to address the problem and to implement the medium-term fiscal support programme with immediate results. Moreover, the tax-free threshold at €5,000 corresponds to the average level of thresholds in the EU. Moreover, a tax reduction by 10 per cent for various expenses, such as medical and hospital expenses, expenses for school support, accrued interests on loans, rent paid for the primary residence of a taxpayer and his/her family, expenses for the energy upgrade of a property, contributions paid to social insurance funds, life insurance policies, etc. has been established.
44. 945. Article 42 of Law 4024/2011 regulates the way the special solidarity contribution, mentioned in article 29 of Law 3986/2011, will be withheld by the employers from the employees’ monthly salary and by the insurance funds from the insured persons’ monthly main pension amount, so that the special solidarity contribution may be collected in advance in instalments (every month), as is the case with wage tax which is withheld monthly. This regulation applies on salaried income earned from 1 January 2012 up to 31 December 2014 and aims at tackling the problem of the critical financial situation of the country and facilitating the implementation of the medium-term support mechanism, since it provides immediate results through the immediate collection of money. Furthermore, the Government stresses that an ongoing effort is being made to address extreme cases and find satisfactory solutions in order to serve the citizens within the set fiscal goals.
45. 946. More specifically, as regards the references made in the complaint to employment and unemployment in the country, the Government indicates that the Ministry of Labour and Social Security has taken a series of measures aiming mainly to the maintenance of jobs, the immediate rehabilitation of the unemployed, the facilitation of young persons’ integration into the labour market and the support to sectors mainly affected by the crisis, such as tourism.
46. 947. Finally, regarding the reference to Case No. 2838 before the Committee, the Government indicates that it will send a separate reply to the allegations of the International Transport Workers Federation and the Panhellenic Seamen’s Federation, thereunder.
47. 948. In light of the above, the positions of the Government can be summarized as follows:
    • ■ The legislative measures taken to restructure the labour market and to enhance the flexibility of industrial relations, as well as to decentralize collective bargaining are due to the circumstances of the financial crisis faced by the country.
    • ■ The social, financial and political circumstances that have been created in the country from May 2010 to date have already been taken into account by the ILO High-level Mission, which expressed its concern especially as regards the application of the freedom of collective bargaining and the safeguarding of the workers’ rights within the framework of proceedings of dialogue among the social partners; a concern that the Greek Government shares.
48. 949. The continuing financial crisis in Greece has imposed the conclusion of a new loan contract, in February 2012, a fact that led to the taking of additional measures to reinforce labour flexibility as an essential factor for the tackling of the increasing unemployment and the loss of competitiveness of the Greek economy. These measures were intertwined with the terms of the new loan and the chances to develop social dialogue and, above all, to achieve consent as to their content, were slim, as in May 2010. The Greek financial crisis constitutes a specific expression of the global financial crisis that highlights the need to remain steadily focused on the policies applied in order to tackle it as regards the protection of workers’ rights and the creation of conditions for financial growth. In such cases, the planning of adequate policies must be the main concern of both the national and the international community.

C. The Committee’s conclusions

1. 950. The Committee observes that this complaint concerns numerous violations of trade union and collective bargaining rights imposed within the framework of austerity measures implemented in the context of the international loan mechanism of the Greek economy. In particular, the complainants contest certain articles of the following laws and the incorporated memoranda which they consider systematically dismantle the collective bargaining system in the country, negatively impact on the capacity of the trade union movement to protect its members’ interest, provide no security for vulnerable workers, and disregard positions expressed by social dialogue institutions in the country: Laws 3833/2010; 3845/2010; 3863/2010; 3899/2010; 3896/2011; 4024/2011; and 4046/2012.
2. 951. The complainants first raise the alarm in respect of wage reductions in the public and broader public sector imposed under Law 3833/2010, in contravention of existing law and collective agreements (7 per cent cut in regular wages and allowances and 30 per cent cut in leave and holiday bonuses). The complainants add that the regular wages of the public sector workers were further cut by 3 per cent by virtue of Law 3845/2010 and further reductions were made, in contravention of collective agreements in force, by replacing the negotiated payment for annual leave and holidays by a very small flat amount. In addition, the introduction of measures that raise the threshold for activating the rules on collective dismissals and reduce severance pay and notice periods were authorized, along with permanent measures that significantly cut pensions. Any collective bargaining to conclude an agreement for an increase in wages was banned until the end of the year. Subsequently, further wage cuts and wage ceilings were imposed in the public sector and there were several interventions by the Government in the voluntary nature of collective bargaining in the railways and urban transport sector. In addition, the GSEE refers to the abolition of protective clauses in collective agreements which had hitherto safeguarded workers against dismissal by means of fixed-term contracts calculated to expire concurrently with the workers’ retirement date. According to the GSEE, this has opened the way to unfair dismissals in certain enterprises, such as banks and public utilities. Finally, the GSEE criticizes the imposition of the “labour reserve” which, it alleges, initiates concealed collective dismissals of thousands of workers in the public and the broader public sectors.
3. 952. As regards the private sector, the complainants allege that Law 3845/2010 further alters the existing mechanism – the generally binding NGCA – for fixing minimum wages and working conditions applicable to all workers under private law and permits exclusions to be made from the scope of the NGCA for the most vulnerable, such as young workers.
4. 953. Moreover, young unemployed persons up to 24 years of age are allegedly exempted from the scope of relevant collective agreements through apprenticeship contracts that provide for extended probationary periods and remuneration at 80 per cent of the minimum basic wage. Subsequently, Law 3863/2010 abolished the general applicability of the mandatory national minimum wage with respect to young workers up to 25 years of age who, if entering the job market for the first time, would be remunerated with 84 per cent of the minimum wage and minors, 15 to 18 years of age, under apprenticeship contracts, would be remunerated at 70 per cent of the minimum wage with reduced social security coverage and be excluded from the protective framework of the NGCA and national legislation as regards working hours, rest periods, paid annual leave and time off for school work.
5. 954. These measures were all taken within the framework of the commitments made by the Greek Government as conditionality for the negotiated loans with the international financial aid mechanism. The GSEE especially condemns the commitment of the Government within this context to reform the legal framework for wage bargaining in the private sector, including by eliminating the asymmetry in requesting compulsory arbitration, allowing territorial pacts to set wage growth below sectoral agreements, and adopting measures to ensure that current minimum wages remain fixed in nominal terms for three years. The Updated Memorandum called for further measures to reform collective bargaining, including the elimination of the automatic extension of sectoral agreements.
6. 955. The GSEE condemns the new measures taken in Law 4024/2011 which, in its view, consolidates further the deconstruction of an industrial relations system that was working effectively to set minimum standards of work for all workers through collective agreements concluded after free negotiations in the private and the wider public sector. The new measures, among others, abolish the fundamental protective principle of favourability and consolidate the prevalence of less favourable firm-level agreements over the uniform standards of pay and work conditions provided in binding sectoral agreements. They eliminate the extension of sectoral collective agreements and introduce further legislative intervention to fully abolish binding collective labour agreements in force and implement a uniform pay scale in public utility enterprises in the broader public sector. Moreover, collective agreements are now restricted by legislation to a maximum duration of three years; the direct binding effect of agreements are only applicable up to three months after their expiration, at which time remuneration will revert to the base wage; and seniority clauses have been abolished.
7. 956. The GSEE also refers to provisions in Law 4024/2011 which overtly interfere in the structure and the operation of trade unions and contravene the right of workers to collective representation, vis-à-vis their employers, by persons that are freely and democratically elected through the extension of the right to negotiate and conclude enterprise level agreements to nebulous non-elected “associations of persons” that do not have a permanent mandate to represent workers on collective issues of work and do not have the trade union rights and protection that lawful elected representatives of workers are entitled to. Moreover, the GSEE contends that this provision abolishes the employer’s obligation to observe the hierarchy of consultation and address the representative enterprise trade union first or in the absence of a firm-level union, address the sectoral trade union that represents affiliated workers in order to agree upon a system of working time organization.
8. 957. Finally, the GSEE refers to the ultimate changes to the functioning of OMED which, in its view, obstructs the work and competence of the independent arbitrator. These include the restriction on the scope of awards which are limited to wage increases of the level of European inflation; additional instructions to adapt awards to the need to reduce unit labour cost by 15 per cent; the abolition of the use of retainability clauses on other issues in the agreement; the abolition of single party recourse to arbitration to determine basic wage; and the replacement of the current body of mediators/arbitrators after 30 March 2011.
9. 958. By adopting the abovementioned legislation, the complainants conclude that the State not only violates its statutory obligation to respect the collective agreements in force, but essentially intervenes with permanent provisions of law in the free collective bargaining system by setting the minimum wages and working conditions in terms less favourable than those provided for by the minimum provisions of the national agreement. The complainants allege that this action directly contradicts the Government’s obligation under Conventions Nos 87, 98 and 154. The complainants contend that these measures systematically dismantle an important collective bargaining framework that was established in 1990 as a result of a social pact endorsed by all parties and which was the only national mechanism available for the setting of a mandatory national minimum wage.
10. 959. The GSEE further points to certain specific situations where the intensified pressure on the collective bargaining framework in the private sector has placed some employers in a stronger position to push clauses in the collective agreement setting a special rate of pay for new employees below the minimum wage set in the national agreement. In one case, the employer has been able to set a sub-minimum wage for “newcomer” pay that is valid for the first eight years of work. The combination of fiscal, tax and broader austerity measures, with the deregulation of the labour market have, according to the complainants, disempowered workers and rendered them more vulnerable to the spillover effect of lay-offs, wage freezes and abolition of the minimum wage. Such measures violate the core of individual and social rights and endanger social peace and cohesion. Any argument of necessity should be balanced with a sense of measure and moderation that is essential to a democratic society that respects human dignity, principles of equity, decent work and collective autonomy.
11. 960. The GSEE contends that such measures cannot be justified out of economic necessity as, according to research carried out by the INE, the freeze in wages will diminish the purchasing power of lower wage categories back to the levels of 1984, incapacitating domestic demand. This is further supported by the recognition made by the three representative Greek employers’ organizations that “labour costs” are not what is hindering Greek business.
12. 961. The GSEE concludes that the Government did not pursue real and substantial social dialogue that could have promoted alternative and more acceptable solutions and proposals that would have borne in mind the social dimension and the long-term effectiveness of the measures to lead the country out of the financial crisis. To the contrary, the Government has further allegedly disregarded the agreement reached by the social partners in February 2012 to respect the agreed minimum standards of work included in the NGCA for 2010–12 and unilaterally imposed a decrease in the minimum wage rate to be replaced with an imposed statutory minimum wage.
13. 962. According to the complainants, the Government has gone beyond what might be considered as acceptable limitations in urgent circumstances as these measures were: not imposed for an explicitly defined and limited period of time; are neither proportionate nor adequate; have been adopted without sufficiently examining other well weighed and more appropriate alternatives; provide no perceivable causal relationship between the extent, the strictness and the duration of the imposed restrictions and the pursued aim; and are not accompanied by adequate and concrete safeguards and guarantees that could protect the living standard of workers and reinforce the ability of vulnerable groups in the population to address the combined direct impact of the economic austerity measures with the multiple, spillover and collateral side effects of the economic crisis. In addition, the GSEE stresses that these measures have seriously damaged its trade union action and function, which lies primarily in the conclusion and implementation of the NGCA. The resultant erosion of workers’ labour rights has negatively influenced workers’ intentions to join and be members of trade unions in a context of such reduced bargaining power.
14. 963. Finally, the GSEE maintains that the scope, effect and wider implications of the State’s intervention in the collective bargaining system and the collective agreements should be appraised in conjunction with the dire impact of the economic policy implemented in Greece, which only compounds the deficiencies that existed in the Greek labour market before the crisis, such as widespread precariousness, the considerable volume of unregistered and/or flexible work and the steadily increasing unemployment that have debilitated workers faced with the crisis and its effects. The GSEE contends that the programme has trapped Greece in a vicious circle where austerity generates recession, followed by more austerity, new taxes and deeper recession, that strangles prospects of economic growth, stifles job creation and tests social cohesion.
15. 964. The Committee takes due note of the substantial information provided by the Government in relation to the Greek financial crisis and the severity of the situation. It observes the Government’s statement that, in light of the critical circumstances, it was necessary to resort to the international financial support mechanism through an international loan. The Government points out that the terms of the disbursement of the loan were linked to the programme for the reduction in public expenses and the enhancement of the competitiveness of the Greek economy, including the necessary structural and fiscal arrangements.
16. 965. According to the Government, the terms of the memoranda have the following objectives: (a) the elimination of the root causes of debt crisis by means of implementing adequate measures and policies restoring the fiscal stability so that the State might stop spending more than it collects; (b) the improvement of the competitiveness of the Greek economy, so that the country might stop importing more than it exports; (c) the creation of conditions for a sustainable public debt management so that the Government might continue to finance its borrowing needs through the financial markets, which the memoranda, through their overall planning, are helping it to return to; and (d) the restructuring of the national social security and financial system, which threatens the sustainability of the Greek economy.
17. 966. As regards the allegation of wage cutting in the public sector, contrary to existing collective agreements, the Committee notes the Government’s statement that this was necessary to achieve an immediate reduction of fiscal expenditure. Similarly, the Government indicates that it was necessary to uniformly restrict any increase in wages by means of collective agreements or arbitration awards in the public sector. The Government, stressing the importance it places on full respect for trade union rights, social dialogue and free collective bargaining, essential to the safeguarding of social cohesion, maintains that these measures do not violate the minimum standards on freedom of association and adds that any legislative restrictions introduced were dictated by the financial crisis and had an apparent duration up to 2012–13.
18. 967. The Government emphasizes that this legislative policy is unprecedented in Greece, as is the financial crisis affecting the country’s economy. The complexity of economic and political issues, the political consultations with international organizations (EU and IMF) and the EU Member States and, generally, the conditions, under which the European support mechanism for the Greek economy has been formulated, did not allow prior consultation with trade union organizations.
19. 968. In reply to the concerns raised in relation to public sector pay cuts and the more recent allegations of the introduction of a new pay scale by virtue of Law 4024/2011, the Government informs the Committee that these measures conform to the following principles: (a) the principle of fiscal adjustment, the observance of which has become a matter of crucial importance for the economic and political survival of the country in an international environment; (b) the principle of smooth functioning of the administration which is directly associated with the hierarchical classification of the levels of responsibility in the exercise of competences as well as with its performance measurement system; (c) the principle of equality and meritocracy as well as party neutrality, safeguarded through the connection between, on the one hand, the hierarchy according to the civil servant’s grade and wage promotion and, on the other, his/her typical and essential skills and performance which is assessed on equal terms for every individual, taking into account the graded individual level of responsibility, as well as the specific working conditions under which the employees exercise their duties with the aim of achieving the smooth functioning of the service or the body to which they belong; and (d) the principle of ensuring the highest possible standard of employees’ performance with a view to serving the public interest.
20. 969. Furthermore, as regards the allegations of ipso jure dismissal, pre-retirement suspension of work and the labour reserve, the Government maintains that these constitute special provisions established under specific fiscal conditions under which the country observes its commitments to lenders–partners to reduce public expenditure. The Government states that fundamental labour rights are ensured, mainly by protecting those workers who are close to retirement and mitigating the effects of employment contract termination for those workers who are put on labour reserve. For these workers, the insurance coverage, both of the employer and the worker, is borne by the employer for a period of 12 months, while they are paid 60 per cent of their basic salary with no obligation to provide work.
21. 970. According to the Government, the major benefit of these provisions is the fact that immediate organizational, operational and fiscal results are being guaranteed with the aim of achieving the strategic goal of reducing the state as well as public expenditure without causing upheaval in the lives of the personnel working in the public administration and the broader public sector. The Government also refers to a number of other provisions that were introduced to further rationalize, simplify and mitigate the differences that had applied in the pay system for the public administration.
22. 971. For the private sector, the Government stresses in its first reply that there are no legislative regulations on the reduction of earnings defined by the terms of collective agreements, nor are there other restrictions on the freedom of collective bargaining.
23. 972. As regards more specifically the allegations of interference in free collective bargaining, the Committee notes that the Government and the complainant concur on the situation prevailing prior to the introduction of these measures and the establishment of the favourability principle whereby workers will be covered by the provisions of a collective agreement only where they are more favourable than those contained in an agreement at another level. According to the Government, Law 3845/2010, while permitting deviation in agreements at different levels, would maintain the principle that statutory enforceable agreements remain binding on those represented by the contracting parties.
24. 973. More specifically, however, the Committee notes the Government’s indication that, in view of the financial crisis, it was necessary to promote decentralization of collective bargaining through a new type of enterprise level collective agreement, aiming mainly at supporting the sustainability and competitiveness of the enterprises which are faced with serious economic pressure. Initially, a new form of enterprise level agreement was approved by the social partners at the end of 2010. At that time, such agreements were allowed to deviate from sectoral or national level agreements only in terms of the organization of working time, the number of jobs to be preserved, the conditions of part-time work, shift part-time work, suspension of work, and any other terms of implementation, including its duration and wages.
25. 974. As regards the exemption from the minimum wage provided for unemployed persons under 24 years of age, the Government indicates that Law 3845/2010 sets the minimum remuneration at 84 per cent for new entrants and at 70 per cent for persons aged between 15 and 18 who have concluded yearly apprenticeship contracts. According to the Government, these minimum wage rates have been stipulated by the law in connection with the subsidization of the social insurance cost and the purpose of the specific labour contracts, taking into account the lack of professional experience of young persons and the need to offer incentives for its acquisition. In addition, the minimum wage is still determined as a percentage of the NGCA and, therefore, follows the dynamics as defined by means of free collective bargaining on national level. Finally, the Government stresses that these measures are necessary for the restructuring of the labour market and the fight against youth unemployment and they are imperative, irrespective of the current financial crisis, which renders them urgent. The Government affirms that these provisions constitute necessary employment policy measures to combat youth unemployment and do not contravene the freedom of collective bargaining nor infringe fundamental trade union rights.
26. 975. The Committee notes the Government’s expression of its firm and continuing commitment, under the current economic crisis, to the protection of human rights. The Government stresses that trade union rights and freedom of collective bargaining covered by ILO Conventions support social cohesion and are absolutely necessary in times of crisis along with the policies of the Government. The exit from the financial crisis has imposed the need to take structural measures in the field of industrial relations and those taken were proportional to the severity of the crisis. The Government maintains that all the measures raised were taken in the interests of fighting youth unemployment and supporting the sustainability and competitiveness of enterprises in a manner that is perfectly compatible with the freedom of collective bargaining as well as the terms of the collective agreements.
27. 976. More generally, the Government contests the views of the GSEE concerning the possible discouragement of workers from becoming members of trade union organizations which it considers have raised unjustified concern and represent political estimations.
28. 977. As regards the additional measures taken within the framework of the Medium-term Fiscal Strategy Framework 2012–15, as well as in the new loan agreement of 9 February 2012, the Government recalls the recognition of the severity of the situation made in the ILO high-level mission report of 23 November 2011, which acknowledged the challenges faced by Greece and the impact of the troika policies on the implementation of international labour standards. The Government states that the prerequisites for the loan agreement of February 2012 were based on the need for a drastic reduction in public spending and, at the same time, drastic reductions in wages, both in the public and private sectors, thus creating conditions of increasing economic downturn. The need to address these issues led to more drastic measures for the restructuring of the labour market.
29. 978. The Government, once again stressing its firm commitment to the observance of international labour standards, observes in its latest reply that the financial crisis and the international economic environment have reduced the quality of labour rights, redefining the concept of core labour rights in an economically developed country, which will necessarily reduce the quality of life of its citizens. The loan conditions and their association with the drastic restructuring of the institutional framework of industrial relations constitutes an unprecedented challenge for Greece and the international community. The international organizations that are offering financial aid to rescue the Greek economy have chosen to implement measures that will enhance labour market flexibility and are considered as the most appropriate method to enhance the competitiveness of the Greek economy. The socio-political scepticism concerning the effectiveness of these measures has been reflected in the outcome of the recent parliamentary elections, thus increasing the uncertainty regarding labour market restructuring in the country.
30. 979. The Government considers that new and further intervention in the system of collective bargaining, in the formulation and the content of labour collective agreements and the existing collective labour dispute resolution system through OMED have come about due to the dire economic situation of the country. The measures taken include a partial restructuring of the free collective bargaining system, so as to ensure that the core of trade union freedom and of collective bargaining might not be affected.
31. 980. Moreover, as regards decentralization of bargaining given the small number of special firm-level agreements that were submitted to the competent authorities, steps were taken so that, in the event that there is no trade union in the enterprise, an “association of persons” that already exists or is established for this purpose by at least three-fifths of the company’s workers, is competent to conclude a firm-level labour collective agreement. This association of persons is established, as explicitly provided for by the legislator, irrespective of the total number of the company’s workers and its duration is not subject to any time limitation. According to the Government, Law 3986/2011 subsequently enabled associations of persons to be formed by at least 25 per cent of workers in an enterprise that employs more than 20 workers or by 15 per cent in enterprises of less than 20 workers.
32. 981. As concerns the statutory protection of such associations, the Government asserts that dismissal for carrying out lawful trade union action is equally null and void as regards the members of associations of persons. In this context, firm-level collective labour agreements are concluded, in order of priority, by trade union organizations of the enterprise that cover the workers or, in the case that there is no trade union organization in the enterprise, by an association of persons and, if these are lacking, by the respective primary sectoral organizations and the employer. Priority is given to the negotiations between the employer and the representatives of the workers at enterprise level and, in the case that they cannot be carried out at that level, the law provides for the carrying out of negotiations at sectoral level. Finally, the associations of persons may exercise the right to strike following a decision, by means of a secret vote, of the majority of the workers in an undertaking, enterprise, public service, public body, corporate or local self-government agency. In this clarified context, associations of persons can now acquire the right to collective bargaining and constitute particular trade union organizations. The Government emphasizes that no issue of competition or limitation of trade union rights is raised, on the contrary, these rights are extended with a view to enhancing the decentralization of collective bargaining. Given the above, the trade union movement, taking into account the potential to decentralize collective bargaining as provided for by the law, as well as the full protection of freedom of association, has the ability to make policy which will cover the complexity of the situation and recruit all trade union organizations.
33. 982. The reinforcement of the decentralization of collective bargaining was included in the measures suggested by the troika; measures that aim to strengthen the competitiveness of the Greek economy, a matter that was of direct interest to the Government as well. In this regard, the troika considered it essential that the extension of collective labour agreements and the principle of favourability in the case of concurrent implementation of sectoral and firm-level collective agreements be suspended throughout the period that the Mid-term Fiscal Strategy Framework is in force, despite the fact that their retention had been an issue of political agreement of the social partners.
34. 983. As regards OMED, the Government emphasizes that the new measures have strengthened the social partners’ role in its administration and operation and specifically their participation in the selection of mediators and arbitrators. The selection of OMED’s board of directors and the renewal of their tenure requires the unanimous decision of the social partners’ representatives. The organization is now administered by a seven member board of directors consisting of six social partners’ representatives and a chairman, who is elected unanimously by them.
35. 984. The Government confirms that the more recent amendments to the functioning of OMED include: (a) permitting recourse to arbitration only where both employers and workers agree; and (b) restricting the jurisdiction of the arbitrator to determining the minimum salary and wage by expressly excluding from arbitration awards clauses that keep in force previous collective regulations. These amendments confirm the State’s determination to strengthen the voluntary character of the collective labour dispute resolution system, in accordance with the provisions of Convention No. 154, as well as to enhance direct collective bargaining among the social partners.
36. 985. In addition, the Government refers to the following new regulations relating to the collective bargaining system: (a) the maximum validity period of collective agreements is set by law at three years and collective agreements of indefinite duration have been abolished; (b) the duration of the after effects of collective agreements has been reduced from six to three months following their expiration or termination; (c) the collective agreements’ terms, which are maintained after the period of their after effect as terms of individual employment contracts have been restricted to the basic salary and the seniority, child, university degree and hazardous work benefits; (d) the employer’s right to unilaterally adjust the terms of an individual employment contract has been established in accordance with the above in point (c); and (e) the minimum salary and wage provided for by the NGCA of 2010 have been reduced by 22 per cent and the employer has the right to unilaterally adjust the individual employment contract.
37. 986. As regards the references made in the complaint to employment and unemployment in the country, the Government indicates that the Ministry of Labour and Social Security has taken a series of measures aimed at maintaining jobs, the immediate rehabilitation of the unemployed, facilitating young persons’ integration into the labour market and supporting sectors mainly affected by the crisis, such as tourism.
38. 987. The Government summarizes its position by referring to the necessity of enhancing the flexibility of industrial relations and decentralizing collective bargaining due to the circumstances of the financial crisis and indicating that it shares the concerns raised by the ILO high-level mission regarding the application of the freedom of collective bargaining and the safeguarding of workers’ rights within a framework of social dialogue. However, the possibility of developing social dialogue and achieving consensus on the terms of the new loan of February 2012 were again slim. The Government concludes that the Greek financial crisis constitutes a specific expression of the global financial crisis that highlights the need to remain steadily focused on the policies applied in order to tackle it as regards the protection of workers’ rights and the creation of conditions for financial growth.
39. 988. At the outset, the Committee wishes to state that it is deeply aware that the measures giving rise to this complaint have been taken within a context qualified as grave and exceptional, provoked by a financial and economic crisis. The Committee observes that neither party to the complaint has called into question the gravity and urgency of the situation and that this must be duly taken into account as background for its conclusions below.
40. 989. The Committee further understands from the parties’ references to the conclusions of the high-level mission report that all parties state that they have made important efforts to address these difficulties with the highest consideration for ratified international labour Conventions and most especially for the principles concerning freedom of association and collective bargaining. The Committee wishes to highlight in this regard the language from the NGCA where the signatory parties recognize that “the impact of the crisis makes more than necessary the protection of workers’ and employers’ organizations from the traditional interventional role of the State and the strengthening of their role in the formulation of social and economic decisions and policies”. While recognizing the efforts made by the Government and the social partners to tackle these daunting times, the Committee recommends that the Government promote and strengthen the institutional framework for collective bargaining and social dialogue and urges, as a general matter, that permanent and intensive social dialogue be held on all issues raised in the complaint with the aim of developing a comprehensive common vision for labour relations in the country in full conformity with the principles of freedom of association and the effective recognition of collective bargaining and the relevant ratified ILO Conventions. The Committee recalls that possible avenues for constructive engagement can be based in the elaboration of adequate mechanisms for dealing with exceptional economic situations within the framework of the public sector collective bargaining system. [See Case No. 2821 (Canada), 364th Report, para. 378.] The Committee considers that such mechanisms can further be developed for the private sector, in full consultation with the social partners concerned.
41. 990. As regards the successive wage cuts in the public sector, the Committee first wishes to recall that, as a general rule, the exercise of financial powers by the public authorities in a manner that prevents or limits compliance with collective agreements already entered into by public bodies is not consistent with the principle of free collective bargaining. If, however, as part of its stabilization policy, a government considers that wage rates cannot be settled freely through collective bargaining, such a restriction should be imposed as an exceptional measure and only to the extent that is necessary, without exceeding a reasonable period, and it should be accompanied by adequate safeguards to protect workers’ living standards. The Committee observes that in certain previously examined cases it has considered that a three-year period of limited collective bargaining on remuneration within the context of a policy of economic stabilization constituted a substantial restriction, and that legislation in question should cease producing effects at the latest at the dates mentioned in the Act, or indeed earlier if the fiscal and economic situation improves. Moreover, it has also considered in some cases that restraints on collective bargaining for three years are too long and that the public authorities should promote free collective bargaining and not prevent the application of freely concluded collective agreements, particularly when these authorities are acting as employers or have assumed responsibility for the application of agreements by countersigning them. [See Digest of decisions and principles of the Committee on Freedom of Association, 5th edition, 2006, paras 1034, 1024, 1025, 1026 and 1011.] While the Committee takes due note of the Government’s indication that there was little choice as to the necessity of the measures to be taken given their clear identification in the Memoranda accompanying the international financial support mechanism, it considers it essential to the efforts for social peace in the country that consultations take place with the employers’ and workers’ organizations concerned as a matter of urgency to review these measures with a view to discussing their impact and to agreeing on adequate safeguards for the protection of workers’ living standards.
42. 991. As regards the staff reductions in the public service and the instauration of “labour reserves”, the Committee observes that its mandate for examining economic rationalization programmes and restructuring processes is limited to matters involving acts of discrimination or interference in trade unions. It does however emphasize the value of consulting organizations of employers and workers during the preparation and application of legislation which affects their interests and considers in particular that, when a restructuring programme is envisaged, it should be the subject of information and prior consultation with the social partners. Moreover, it is important that governments consult with trade union organizations to discuss the consequences of restructuring programmes on the employment and working conditions of employees. Although, and given the specific context in this case, it is not within its competence to comment on economic measures which a government may take in difficult times or on the recommendations of the International Monetary Fund, the Committee nevertheless notes that decisions involving dismissal of large numbers of workers should be discussed extensively with the trade union organizations concerned with a view to planning the occupational future of these workers in the light of the country’s opportunities [see Digest, op. cit., paras 1079, 1081 and 1085]. Observing the Government’s acknowledgement that it was not possible to carry out proper consultations prior to the taking of these measures due to the urgency of the situation, the Committee considers that it is of critical importance, given the massive impact that these measures can have, that the Government now engage in constructive dialogue with the workers’ and employers’ organizations concerned to consider appropriate steps for mitigating the consequences. The Committee wishes to highlight that it also considers such social dialogue can only have a positive impact on the social cohesion in the country, an element which may relieve the downward economic spiral caused by some of these measures. The Committee urges the Government to keep it informed of the steps taken to engage the social partners in in-depth dialogue in this regard.
43. 992. The Committee further notes the allegations of specific exclusions from the collective agreements in force made for young persons. It also notes the Government’s indication that wages have been reduced for young persons in order to facilitate their entrance into the labour market and tackle youth unemployment (which was slightly above 50 per cent). In addition, the Government refers to a subsidy programme implemented by the Manpower Employment Organization under which the insurance contributions for pension, health-care services and occupational hazards of young persons aged 16–24 are 100 per cent subsidized. Based on data provided by the labour inspectorate as from the beginning of January 2012, the number of fixed-term employment contracts of young persons for the acquisition of work experience amounted to 181.
44. 993. The Committee observes that the special wage remuneration for young workers is similar to systems of special job offers that it has examined in the past, which introduce a new set of rules for determining the wages of a particular category of employees under the pretext that they would otherwise face long-term unemployment due to unfamiliarity with the labour market. In accordance with its previous considerations, the Committee trusts that these measures are restricted to a limited period of time and will not restrict the collective bargaining rights of these workers as regards their remuneration for a longer period than that announced by the Government (contracts of up to 12 months’ duration). The Committee further trusts that on all other aspects these workers’ freedom of association rights are fully guaranteed and requests the Government to review the use and impact of these measures with the workers’ and employers’ organizations concerned and provide detailed information thereon and to keep it informed of developments.
45. 994. As regards the allegations of interference in collective agreements and the system of collective bargaining in both the public and private sector, the Committee notes the numerous matters raised by the GSEE, including the abolition of the favourability principle, the nullification and banning of any future extension of collective agreements, the reduction of the negotiated national minimum wage by 22 per cent and its further freeze until the end of the programme period, the suspension of any clauses providing for wage increases or relating to seniority, the enforcement of a maximum duration for collective agreements of three years and the mandatory expiration of collective agreements in place for 24 months or more or with a residual duration of one year.
46. 995. Firstly, the Committee cannot but observe that the long list of issues raised by the complainants demonstrate important and significant interventions in the voluntary nature of collective bargaining and in the principle of the inviolability of freely concluded collective agreements. While noting the reasons advanced for the exceptional circumstances in this case, the Committee considers that such repeated and extensive intervention in collective bargaining can destabilize the overall framework for labour relations in the country if the measures are not consistent with the principles of freedom of association and collective bargaining. In this regard, the Committee observes that in a case in which the Government had, on many occasions over the past decade, resorted to statutory limitations on collective bargaining, the Committee had pointed out that repeated recourse to statutory restrictions on collective bargaining could, in the long term, only prove harmful and destabilize labour relations, as it deprived workers of a fundamental right and means of furthering and defending their economic and social interests. Where intervention by the public authorities is essentially for the purpose of ensuring that the negotiating parties subordinate their interests to the national economic policy pursued by the government, irrespective of whether they agree with that policy or not, this is not compatible with the generally accepted principles that workers’ and employers’ organizations should enjoy the right freely to organize their activities and to formulate their programmes, that the public authorities should refrain from any interference which would restrict this right or impede the lawful exercise thereof, and that the law of the land should not be such as to impair or be so applied as to impair the enjoyment of such right. The suspension or derogation by decree – without the agreement of the parties – of collective agreements freely entered into by the parties violates the principle of free and voluntary collective bargaining established in Article 4 of Convention No. 98. If a government wishes the clauses of a collective agreement to be brought into line with the economic policy of the country, it should attempt to persuade the parties to take account voluntarily of such considerations, without imposing on them the renegotiation of the collective agreements in force. [See Digest, op. cit., paras 1000, 1005 and 1008.] While it is not its role to express a view on the soundness of the economic arguments invoked to justify government intervention to restrict collective bargaining, the Committee must recall that measures that might be taken to confront exceptional circumstances ought to be temporary in nature having regard to the severe negative consequences on workers’ terms and conditions of employment and their particular impact on vulnerable workers. The Committee asks the Government to provide full information on the evolving impact of these measures on the overall environment and to keep it informed of the efforts made for their duration to be temporary. The Committee expects that all these measures will be the subject of tripartite review without delay and that special focus will be given to the manner of determining the national minimum wage in the future.
47. 996. As regards the reduction to three months for the period of residual effect given to an expired collective agreement, the Committee does not consider this to be a violation of the principles of free collective bargaining but does observe that it comes within an overall context where imposed decentralization and weakening of the broader framework for collective bargaining are likely to leave workers with no minimum safety net for their terms and conditions of work, even beyond the wages issue.
48. 997. In this regard, the Committee notes the recent measures taken to promote special firm-level agreements which shall prevail in case of concurrent implementation of sectoral or occupational agreements. It further observes that, with the annulment of any extension effect of higher-level agreements, the only potential conflict that could arise between collective agreements is in the situation where an employer is actually directly bound by the higher-level agreement due to his or her voluntary membership in the employers’ organization concerned. While taking due note of the Government’s indication that the abolition of the favourability principle in this context supports collective bargaining at firm level for the regulation of pay and working conditions under the special financial conditions of the individual enterprise, the Committee considers that legislation should not constitute an obstacle for collective bargaining at industry level [see Digest, op. cit, para. 990] and signals its concern that the concordance of all the above measures may severely impede bargaining at a higher level. In any event, the Committee, recalling that meaningful collective bargaining is based on the premise that all represented parties are bound by voluntarily agreed provisions, urges the Government to ensure, as indicated in its reply, the statutory enforceability of every collective agreement among those represented by the contracting parties. The Committee underlines that the elaboration of procedures systematically favouring decentralized bargaining of exclusionary provisions that are less favourable than the provisions at a higher level can lead to a global destabilization of the collective bargaining machinery and of workers’ and employers’ organizations and constitutes in this regard a weakening of freedom of association and collective bargaining contrary to the principles of Conventions Nos 87 and 98.
49. 998. In respect of the allegations related to the use of association of persons for special firm-level agreements, the Committee recalls that Article 4 of the Convention refers to the encouragement and promotion of the full development and utilization of machinery for voluntary negotiation between employers or employers’ organizations and workers’ organizations. The Committee considers that collective bargaining with representatives of non-unionized workers should only be possible where there are no trade unions at the respective level. In this regard, the Committee recalls that the Collective Agreements Recommendation, 1951 (No. 91), emphasizes the role of workers’ organizations as one of the parties in collective bargaining; it refers to representatives of unorganized workers only when no organization exists and the Workers’ Representatives Convention, 1971 (No. 135), and the Collective Bargaining Convention, 1981 (No. 154), also contain explicit provisions guaranteeing that, where there exist in the same undertaking both trade union representatives and elected representatives, appropriate measures are to be taken to ensure that the existence of elected representatives is not used to undermine the position of the trade unions concerned. [See Digest, op. cit., paras 944 and 946.] The Committee takes due note of the assurances provided by the Government that members of associations of persons will be similarly protected against acts of anti-union discrimination but further observes that the Government does not contend that such associations can be considered to be trade unions with full functions and guarantees of independence. In these circumstances, the Committee is concerned that the granting of collective bargaining rights to such associations may seriously undermine the position of trade unions as the representative voice of the workers in the collective bargaining process. The Committee considers this all the more so given that the recognition of such associations comes within a context of a radical overhauling of the labour relations system as it was known in the country. The Committee expects that the question of the roles and responsibilities of association of persons will be the subject of a full and comprehensive discussion with the social partners, within the framework of an overall review of the labour relations system, with a view to ensuring that they do not undermine the position of trade unions in relation to collective bargaining.
50. 999. As regards the suspension of the extension authority of collective agreements more generally, the Committee observes that, while there is no duty to extend agreements from the perspective of freedom of association principles, any extension that might take place should be subject to tripartite analysis of the consequences it would have on the sector to which it is applied [see Digest, op. cit., para. 1051]. The Committee trusts that, in their overall discussions of the most appropriate measures to be taken under the current circumstances in respect of the broader framework for collective bargaining, the Government and the social partners will fully consider the various impacts on social and economic policy that may be achieved through extension.
51. 1000. Finally, the Committee takes note of the numerous allegations related to the modifications to the functioning and constitution of OMED. As regards the amendments to the law which now only permit recourse to binding arbitration when both parties agree, the Committee recognizes that this measure was taken in an effort to align the law and practice with its principles relating to compulsory arbitration and does not consider this measure to be in violation of freedom of association principles. As regards the additional restrictions on the arbitrator’s mandate, the Committee considers as a general rule that arbitrators should be free to make a determination on a voluntarily requested arbitration without government interference. Observing that these restrictions were introduced within the framework of the proposed stabilization programme, the Committee expects that these restrictions will be regularly reviewed by the social partners with a view to ensuring their elimination at the earliest possible moment. Moreover, the Committee requests the Government, in consultation with the workers’ and employers’ organizations to review without delay the impact on basic minimum standards other than wages of the elimination of the arbitrator’s authority to uphold retainability clauses in collective agreements so that these elements may further inform the review of the overall labour relations system.
52. 1001. As regards the closing of the Workers’ Housing Organization (OEK) and the Workers’ Social Fund (OEE), the Committee notes the complainants allegation that these bodies are crucial to trade union social work, funding and workers’ housing and that they provide an indispensable social function and do not burden the state budget. The Committee further notes with concern that one of the functions of the OEE was to secure minimum financing for trade unions in order to support their operating needs and that it has been the main source of OMED financing, enabling it to preserve its autonomy vis-à-vis the State to provide independent mediation and arbitration services for the resolution of collective labour disputes. The Committee requests the Government to provide detailed observations on this matter, including indications of measures taken to ensure that the closing of the OEE in particular has not led to a grave interference in the functioning of the GSEE or of OMED.
53. 1002. The Committee considers that it is a matter of utmost importance that the Government and the social partners urgently come together to review all the abovementioned measures and their impact not only on labour relations in the country, but also on the hopes for economic development and social cohesion. It has the firm expectation that they hold the key to the elaboration of a labour relations system that is workable and will be conducive to rebuilding the economy. In this regard, the Committee expects that the social partners will be fully implicated in the determination of any further alterations within the framework of the agreements with the European Commission, the IMF and the European Central Bank (ECB) that touch upon matters core to the human rights of freedom of association and collective bargaining and which are fundamental to the very basis of democracy and social peace.

The Committee’s recommendations

1. 1003. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) Deeply aware that the measures giving rise to this complaint have been taken within a context qualified as grave and exceptional, provoked by a financial and economic crisis, and while recognizing the efforts made by the Government and the social partners to tackle these daunting times, the Committee recommends that the Government promote and strengthen the institutional framework for collective bargaining and social dialogue and urges, as a general matter, that permanent and intensive social dialogue be held on all issues raised in the complaint and in its conclusions with the aim of developing a comprehensive common vision for labour relations in the country in full conformity with the principles of freedom of association and the effective recognition of collective bargaining and the relevant ratified ILO Conventions. The Committee requests the Government to keep it informed of all developments in this regard. The Committee further requests the Government to consider availing itself of ILO assistance in respect of the matters raised.
   • (b) Recalling that meaningful collective bargaining is based on the notion that all represented parties are bound by voluntarily agreed provisions, the Committee urges the Government to ensure, as indicated in its reply, the statutory enforceability of every collective agreement among those represented by the contracting parties.
   • (c) The Committee requests the Government to provide detailed observations in reply to the latest allegations of the closing of the Workers’ Social Fund (OEE) and the Workers’ Housing Organization (OEK), including indications of measures taken to ensure that the closing of the former has not led to a grave interference in the functioning of the GSEE or of OMED.