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The Troika calls for the introduction of individual instead of collective agreements

07 February 2011 / 18:02:00  GRReporter
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Victoria Mindova

The International Monetary Fund, the European Central Bank and the European Commission call for removing any obstacle to the signing of individual contracts over collective agreements. The leaders of the mission came on their next visit to Athens to check how the program for fiscal consolidation is running. They must prepare an expert report which will be the base for the payment of the fourth tranche of the 110 billion support.

The supervisors should visit seven key ministries in less than a week before submitting the final report on the implementation of reforms, after which another 15 billion will be paid to the Greek account.

According to the latest information, the main prerequisites for the payment of the fourth tranche are further revision of labour relations and overall reduction of wage costs, not only in the public but in the private sector too. Although the Minister of Employment and Social Security Louka Katseli argues that the right for the 13th and 14th salary in the private sector will not be cancelled the cuts will not omit the additional pension insurance and the one-off retirement payment.

Pensions imposed in addition to the basic retirement benefit must be reduced significantly, stated the Social Insurance General Secretary Athina Dretta for Sky. The professional pension funds that pay additional pension to date are almost to the red or have registered deficits like most state insurance funds. On the question "How many of these funds have no money?" Athina Dretta replied: "Almost all of them have deficits."

Economists of the tripartite mission advised the government to totally abolish inefficient state organizations which only increase spending and do not function efficiently. At the same time, government is trying to balance the cuts in the budget in order not to cause further social tensions. Currently, the administration is considering the option to reduce the additional field pensions of about 45% to the more affordable for the state pocket about 10% -15% of the total amount of pensions.

The cuts in the private sector, however, are more difficult. The level of salaries in larger industries has been regulated so far by collective agreements. Every two years approximately, employers and employees sat at the table for negotiations and agreed on the level of the minimum salary in each sector, the annual increases in staff remuneration and other employment matters. Agreements about the salary increases were applicable primarily to large companies employing over 50 people. However, employers of any type of businesses could not hire staff with remuneration below the agreed minimum.

Following the outbreak of the crisis, which quickly grew into a deep and long recession, the government followed the advice of the Troika and gave the green light to individual bargaining in any company. The new labour rules were introduced by law in late 2010. They allow employers to be more flexible in determining the working hours and the level of monthly salaries. The main purpose of the changes is to enable the employers to keep jobs at reduced turnovers and the sharp drop in revenue and profit.

Trade unions have given a serious response to the changes in the labour relations and the law has no application for now, it is on paper only. However, the supervisory Troika calls for its actual implementation.

Louka Katseli announced she would introduce changes in the activities of the Labour Inspectorate in the process of reforming the employment system. After announcing the bill to be voted in Parliament by the end of next week, the unions responded sharply and requested a meeting with representatives of the Ministry of Labour and Social Security.

"The law on the changes in the labour inspection will only worsen the position of workers, it will not improve it as the government states," was clear the President of the union of construction workers Yannis Tasiolas. One of the changes indicated by the unionist is imposing fines on employees hired in the black by the employers, i.e. they do not pay any social or health insurance, nor are on the payroll. The penalty has been imposed only on the employer so far. Based on the amendments to the law on labour inspection activities black workers will be imposed fines too.

"Nobody wants to work without insurance and if so it is because of gaps in the system," explained Yannis Tasiolas. He said the government would unduly punish workers who were often forced to work without insurance because employers wanted to reduce their costs and violated the law themselves.

"How can we speak of effective control when the total number of employees in the Labour Inspectorate is 1020 people. Many of them are employed in the administration and do not carry out inspections," asked rhetorically Tasiolas. He is part of a union of several trade unions that have united against the adoption of the draft and want changes before its voting.  

Another irregularity according to trade unionists is the provision which includes representatives of the Hellenic Chamber of Industry in the supervisory board of the Labour Inspectorate. "It is like to put the wolf to guard the sheep," said the list of notes to the bill. They are adamant that this bill will not help the government stop employment irregularities.


Tags: EconomyMarketsSupervisory TroikaInternational Monetary FundEuropean Central BankGreeceFinancial support
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