Observation (CEACR) - adopted 2011, published 101st ILC session (2012)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Greece (Ratification: 1962)

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 100th Session, June 2011)

The Committee takes note of the comments made under article 23 of the ILO Constitution by the Greek General Confederation of Labour (GSEE) in communications dated 29 July 2010, and 28 July and 18 November 2011, as well as the Government’s reply to GSEE’s first communication, dated 16 May 2011. The Committee further notes the comments made by the Greek Federation of Bank Employee Unions (OTOE), dated 28 September 2011 and the Hellenic Federation of Enterprises (SEV) dated 23 September 2011.

The Committee takes note of the discussion that took place at the Committee on the Application of Standards during the 100th Session of the International Labour Conference (June 2011) with regard to the application of this Convention. It notes that the Conference Committee welcomed the Government’s indication that it was working on arrangements with the ILO for the visit of a high-level mission (HLM) proposed by the Committee of Experts to facilitate a comprehensive understanding of the issues raised by the GSEE in its comments concerning the application of 12 Conventions ratified by Greece. The Conference Committee also considered that contact with the International Monetary Fund (IMF) and the European Union would assist the mission in its understanding of the situation (Provisional Record No. 18, Part II, pages 68–72). The Committee takes note of the report of the HLM which visited the country from 19 to 23 September 2011 and held further meetings with the European Commission (EC) and the IMF in Brussels and Washington, DC, in October 2011.

The Committee wishes first to emphasize that the concerns expressed below have been made with a full understanding of the very difficult, challenging and exceptional circumstances which the country has had to face over the last few years. Having reviewed the HLM report, the Committee observes that all parties have made extraordinary efforts to address these difficulties with the highest consideration for ratified international labour Conventions and most especially for those concerning freedom of association and collective bargaining. The Committee deeply appreciates these efforts and expresses the firm hope that the Government and the social partners will be able to review all of its comments below in the constructive vein in which they are intended, with the aim of jointly developing a common platform to advance the country in a manner which fully respects organizational rights and the promotion of free and voluntary collective bargaining that can be responsive to the current urgencies.

Similarly, the Committee welcomes the opportunity that the HLM was given to discuss with the EC and the IMF, as well as the reported openness of these institutions to ILO assistance, in the areas of its mandate, in finding avenues for the advancement of the country that would be in conformity with relevant ratified Conventions. The Committee trusts that the Government will be in a position to request relevant assistance from the ILO in the very near future.

Article 4 of the Convention. Binding nature of collective agreements and their extension. The Committee recalls that the 2010 comments of the GSEE criticized, in particular, section 2(7) of Act No. 3845/2010 (Measures for the application of the support mechanism for the Greek economy by euro area Member States and the IMF) which provided that: “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.” The GSEE states that this provision paves the way for the dismantling of a solid machinery of collective bargaining which had been functioning smoothly and effectively in the country for 20 years as a result of a “Social Pact” endorsed in 1990.

The Committee observes that the Government refers to the financial crisis and the measures found necessary to tackle it based on certain conditionalities set out in the Memoranda of Economic and Financial Policies and of Understanding on Specific Economic Policy Conditionality. The Government underlines that, for reasons of general public interest, it was necessary to undertake a partial restructuring of the free collective bargaining system, focusing mainly on the expansion of the levels of collective bargaining and the thorough consideration of its issues, so that the core of the trade union freedom and of collective bargaining might not be affected, but rather safeguarded and indeed extended to cases where it was not applicable until now. In this regard, the Government referred to Act No. 3899/2010 enabling “special enterprise-level collective agreements”.

The Committee will not develop an analysis of the “special enterprise-level collective agreements” as it understands from the HLM report and the latest communication of the GSEE that these agreements have now been superseded by Act No. 4024 /2011 which, according to the GSEE, has consolidated 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. In particular, the GSEE contests the abolition of the fundamental protective principle of favourability and the new legislative framework which, it claims, will give rise to the prevalence of firm-level agreements less favourable than the uniform standard of pay and working 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 to fully abolish binding collective labour agreements in force in public utility enterprises. Moreover, the GSEE condemns the extension of bargaining rights in this legislation to non-elected “associations of persons” which have no permanent mandate nor the protections afforded to trade unions or even to lawfully elected representatives of workers. The GSEE adds that such associations are not restricted to small enterprises but may also be formed in enterprises with more than 20 workers provided there is no union. The GSEE contends that this new legislation further disempowers the institutional role of the trade union movement and its sectoral federations and weakens their bargaining power in setting minimum protective standards of work uniform to all workers. The GSEE asserts that this framework concedes the dominating role of the employers’ managerial prerogative in a labour market that, while greatly flexible, is unprotected and increasingly deprived of binding principles and rules that hitherto ensured the right to decent work. Under the new paradigm, sectoral and occupational collective agreements are binding only on the signatory employer who may, at his or her discretion, leave their sectoral organizations and opt out from the binding effect of the agreement giving rise to unfair competition and the discouragement of workers in exercising their organizational rights. Finally, the GSEE asserts that it is entirely untrue that it and the other social partners were invited to participate in social dialogue related to these measures.

While having not yet received the Government’s observations with respect to these latest measures, the Committee observes the serious concern raised on this matter in the conclusions of the HLM report:

While the Government had clearly made great efforts over the last year to ensure that alterations to the industrial relations framework would respect the practices and traditions of the relations between the social partners, the HLM must express its deep concern at the further developments in this area which took place after its visit, and in particular the provisions of Act No. 4024 of 27 October 2011, empowering associations of persons to conclude collective agreements at enterprise level. The HLM understands that association of persons are not trade unions, nor are they regulated by any of the guarantees necessary for their independence. The HLM is deeply concerned that the conclusion of ‘collective agreements’ in such conditions would have a detrimental impact on collective bargaining and the capacity of the trade union movement to respond to the concerns of its members at all levels, on existing employers’ organizations, and for that matter on any firm basis on which social dialogue may take place in the country in the future.

At the outset, the Committee observes with deep concern that these changes, aimed at permitting deviations from higher level agreements through “negotiations” with non-unionized structures, are likely to have a significant – and potentially devastating – impact on the industrial relations system in the country. The Committee understands that the Government was given little choice in the current discussions with the lending institutions but to adopt these changes in response to calls for greater flexibility and improved competitiveness of the labour market. The Committee deeply regrets however that such far-reaching changes were made without full and thorough discussions with all the social partners concerned with a view to determining the appropriate flexibility to be afforded without wholly risking to undermining the long-established industrial relations in the country. The Committee expresses the firm hope that the Government and the social partners will be in a position to come together in the very near future to review these measures and elaborate a system that will be relevant to Greece and its traditions. In this regard, the Committee also trusts that the social partners will be fully involved in the determination of any further alterations within the framework of the agreements with the EC, the IMF and the European Central Bank (ECB) that touch upon such aspects which go to the heart of labour relations, social dialogue and social peace, and that their views will be taken fully into account.

The Committee emphasizes 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, with a view to the regulation of terms and conditions of employment by means of collective agreements. 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. The Committee understands from the HLM report that the provision of collective bargaining rights for associations of persons was aimed at filling a void in small enterprises of fewer than 20 workers where enterprise-level unions could not legally be formed given the minimum membership requirement to form a union (20). It nevertheless considers that granting collective bargaining rights to other types of workers’ representation which are not afforded the guarantees of independence that apply to the structure and formation of trade unions and the protection of its officers and members is likely to seriously undermine the position of trade unions as the representative voice of the workers in the collective bargaining process. In the current framework, the fact that associations of persons can only be constituted in enterprises where there are no unions provides no guarantees for workers’ choice of representation given that unions cannot legally be formed in enterprises of fewer than 20 workers. Given the prevalence of small enterprises in the Greek labour market (approximately 90 per cent of the workforce), as noted by the HLM report, the Committee fears that the entire foundation of collective bargaining in the country may be vulnerable to collapse under this new framework. This is a particular risk given that the abolition of the favourability principle set out first in Act No. 3845/2010 and given concrete application in Act No. 4024 /2011 has the effect of nullifying the binding nature of collective agreements. The Committee recalls in this regard the general principle enunciated in Paragraph 3(1) of the Collective Agreements Recommendation, 1951 (No. 91), that collective agreements should bind the signatories thereto and those on whose behalf the agreement is concluded. Employers and workers bound by a collective agreement should not be able to include in contracts of employment stipulations contrary to those contained in the collective agreement. The Committee considers that this recognition of the principle of favourability should apply, according to the circumstances, to lower level collective agreements, unless the same parties are involved in the negotiations.

As regards the elimination of the extension of sectoral or occupational collective agreements however, the Committee, while observing that Paragraph 5 of Recommendation No. 91 further refers to the utility of extending of collective agreements, such determinations are clearly a matter for public policy determination, where appropriate and suited to the conditions of each country. The temporary abolition of extension provisions cannot therefore be considered to be in contravention of the provisions of the Convention.

The Committee requests the Government to review Act No. 4024 /2011 and article 2(7) of Act No. 3845 /2010 with the social partners concerned so as to bring the collective bargaining framework into line with its comments above both as regards the question of associations of persons and as regards the binding nature of freely concluded collective agreements and to provide detailed information on the steps taken in this regard in its next report.

The Committee further requests the Government to provide statistics on the number of associations of persons constituted in the country, the number of agreements concluded by them and their coverage, as well as the number of first-level agreements in contravention with the abovementioned favourability principle.

Compulsory arbitration. The Committee notes the comments provided by the SEV in relation to the mechanism for compulsory arbitration in the country. The SEV refers in particular to Act No. 3899/2010 which maintains the possibility of unilateral recourse to compulsory arbitration. While the legislation now enables the employer to also have recourse to compulsory arbitration which previously was only permissible for workers’ organizations, the SEV contends that the possibility of unilateral recourse remains contrary to the Convention even though either party may now invoke it. According to the SEV, the arbitrator may determine the basic wage in the domain concerned (enterprise, branch, sector, inter-professional or even national). The SEV adds that this has a considerable impact on other benefits, many of which are calculated on the basic wage. Finally, while the text of the law states that all other matters may continue to be the subject of negotiations for the parties, the SEV claims that a tendency to breach this rule has already been demonstrated by the inclusion in arbitral awards of a clause maintaining the previous provisions of the agreement even though these are beyond the competence of the arbitrator. An evaluation of the system with the social partners after three years is envisaged by section 15 of the Act.

For its part, the GSEE also raises issues concerning Act No. 3899 and the changes to the Organization for Mediation and Arbitration (OMED). The GSEE particularly contests the suppression of the previous obligation to accept the mediation proposal before having the right to have recourse to arbitration. In the new system, a party can therefore request arbitration without any proof that they had undertaken the mediation process in good faith; they simply need to participate. The GSEE further contests the restricted competence of the arbitrator to deal only with the basic salary and daily wage determinations and the universal prohibition for trade unions to undertake strike action during the arbitration process. As regards the “retainability clause” – which provides that all the terms included in previous collective agreements and/or arbitration awards of the same legal value in so far as they have not been abolished or amended, shall remain in force and effect and constitute an entirety – the GSEE contends that this is simply aimed at ensuring stability in conditions of work related to crucial issues such as health and safety, working time, elimination of gender discrimination at work, educational leave, trade union contributions, as well as matters relating to the procedure and the terms of collective bargaining, mediation and arbitration. Finally, the GSEE contests the legislative restrictions on the arbitrator which limits any increase that may be made to the basic wage to no more than the base annual rate of European inflation.

The Committee observes from the HLM report that:

The OMED informed the HLM that its basic purpose was to promote and safeguard free and voluntary collective bargaining ... . The mediators and arbitrators were independent. In rendering decisions, arbitrators had to take into account among other things, economic conditions and the competitiveness of the sector concerned. Training would be provided to enable them to take into account economic developments ... . Recourse to mediation and arbitration was left to the discretion of employers’ and workers’ organizations. There was no obligation to bring a dispute to the OMED. The prerequisite was to have commenced direct negotiations and to have reached an impasse. Recourse to arbitration could take place either through agreement of the parties or unilaterally, under the following conditions, established in Act No. 3899/2010: (i) any party could resort to arbitration if the other party had refused mediation; (ii) any party could resort to arbitration immediately after the decision of the mediator was issued. The latter provision extended to both parties a facility which had been available only to workers under the previous law. Arbitration could only take place on wages and until 2012, the awards could not exceed the limits set by article 51 of Act No. 3871/2010, i.e. the average EU inflation rate. In case non-wage issues had been regulated by an older collective agreement, they would have to be settled through negotiations.

In the light of the information before it, the Committee understands that the unilateral recourse to compulsory arbitration is limited to the determination of the basic wage at national or sectoral/occupational level following a failed negotiation and an inconclusive mediation process. The Committee further understands that this mechanism is available in a system whereby there is not at present any machinery for minimum-wage fixing, a matter which could be determined by national legislation, following full consultation of the social partners concerned. The Committee therefore considers that the possibility of recourse to compulsory arbitration in relation to the basic wage as set out in Act No. 3899 would appear not to infringe the provisions of the Convention. The Committee further considers that the restrictions placed on the arbitrators in relation to the maximum increase of the basic wage is also a matter that may be determined by the Government in the absence of a common agreement among the parties concerned, especially in the current circumstances of extreme austerity, as an exceptional measure and not exceeding a reasonable period.

As regards the use of a “retainability” clause with respect to non-wage matters, the Committee observes that this is a common principle in certain regions and practised by several countries. The Committee considers that the use of such a clause to ensure continuity with respect to the terms and conditions of employment of individual workers and to avoid a legal vacuum does not pose a problem of compatibility with the Convention. On the other hand, the Committee is of the view that the elements of the collective agreement that concern the relation between employers or their organizations and a workers’ organization or workers’ organizations should be subject to renegotiation so as to avoid an obligatory and automatic perpetuation of worker representation that may not reflect an evolution in the workers’ free and independent choice in this regard. The Committee requests the Government to ensure that the “retainability” clause is used in the case of unilateral requests for arbitration in accordance with this principle.

Intervention in freely concluded collective agreements. The Committee further notes the communication of the OTOE which follows up the recommendations made by the Committee on Freedom of Association (CFA) in Case No. 2502. In its last examination of this case, the CFA, having referred the legislative aspects of the case to this Committee, had urged the Government to hold further full and frank consultations on the future of the supplementary pension funds of bank employees and of their assets so that these matters would be determined by mutual agreement of the parties to the collective agreements by which these funds were set up, and to which only they contributed, and to amend Act No. 3371/2005 to reflect the agreement of the parties. The OTOE also transmits a copy of a letter from UNI Europa to the EC, the ECB and the IMF in which UNI Europa strongly opposes the condition set out in the Memoranda of government intervention to eliminate bank employees’ premiums which had been the subject of sectoral collective agreements since 1984 and represent part of the fixed salary of ordinary workers in the banking sector. According to UNI Europa, this would translate into a unilateral reduction of bank employees’ salaries by 3.4 per cent while increasing bank profits approximately €80 million.

The Committee recalls that the first issue raised by the OTOE – which occurred well before the financial crisis in the country – has already been fully examined by the CFA which, recalling the voluntary nature of collective bargaining, strongly urged the Government to amend Act No. 3371 which enabled unilateral denunciation of the collective agreements in the banking sector on supplementary pension funds and to provide the space for renewed negotiations between the social partners concerned so as to determine the future of these funds. The Committee similarly requests the Government to bring the parties together with a view to achieving a mutually acceptable agreement.

The Committee notes that the Memorandum of Understanding on Specific Economic Policy Conditionality and the Memorandum of Economic and Financial Policy provide: “To support banks in their effort to restructure operations, Government takes steps to limit bonuses and eliminate the so-called ‘balance-sheet’ premium or other equivalent measures.” The Committee recalls, as it did in its previous comment that, if, 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 it is necessary, without exceeding a reasonable period, and it should be accompanied by adequate safeguards to protect workers’ living standards. The Committee requests the Government to provide information in its next report on any steps taken to eliminate the premiums referred to, the extent to which consideration was given to the protection of workers’ basic living standards and the duration of the restriction.

Similarly, the GSEE refers to unilateral interventions in freely concluded collective agreements through: the perpetuation of a general wage freeze with Public Utility Enterprises (DEKO); the general abolition of collective labour agreements setting out the terms of pay and work in all enterprises of the wider public sector to be replaced by the public sector pay regime regardless of their entirely different existing pay structures; the abolition of collective agreements in the Hellenic Railways Organization and the Athens Urban Transportations and; the reduction in wages for young workers below the applicable collective agreement. Recalling the abovementioned principles with respect to the need to take exceptional measures as part of a stabilization policy, the Committee requests the Government to indicate the steps taken to ensure that the above measures are accompanied by adequate safeguards to protect workers’ living standards and to carry out a review with the social partners concerned as to their continuing necessity after a determined period of time.

Articles 1 and 3. Protection against anti-union dismissal. More generally, the GSEE refers to a series of measures introducing flexible forms of work which render workers more vulnerable to abusive practices and unfair dismissal (e.g. flexibility in the management prerogative to breach full-time work contracts and unilateral imposition of reduced-term rotation work, extended duration of permissible use of temporary agency work, increased probationary period and extension of the maximum period for fixed-term contracts, etc.). The Committee requests the Government to provide its observations on the comments made by the GSEE in this regard and to provide all relevant information, including comparative statistics relating to complaints of anti-union discrimination and any remedial action taken, with its next report.

[The Government is asked to reply in detail to the present comments in 2012.]