Collective labor agreements on the way out
The collective labor agreements that currently represent some 75 percent of professionals in the private sector and form the backbone of their working relationship with their employers by defining the terms of employment and pay have already started disappearing over the past year, but soon they will be completely annulled.
The new ?reforms on collective negotiations,? as the Economy Ministry likes to describe the contents of Article 37 of the draft law on the economy that has already reached Parliament, are one more step toward the demolition of two of the most powerful pieces of legislation to be enacted in Greece since 1974: laws 1264/82 and 1876/90.
To begin with, collective labor agreements referring to specific sectors of the economy will no longer be mandatory – as they are at present – except in the case of businesses whose representatives or owners are themselves members of the labor unions with which the collective agreement is signed. According to the new draft law, moreover, they cannot be extended to remain in effect beyond the year in which they were signed nor to include owners and business representatives who do not belong to the union representing them. This development is expected to cause a serious shake-up in the structure of employers? organizations, effectively razing employers? federations and increasing the autonomy of businesses in setting the level of monthly salaries and daily wages, which will inevitably drag down the level of salaries set by existing strong collective labor agreements, which are formed according to the terms set out in the National Collective Labor Contract that acts as a benchmark.
At the same time, the draft law will deal a strong blow to the power of sectoral labor unions, as the right of individual businesses to sign employment agreements with small numbers of employees will gradually spell the demise of the role of unions and other labor rights associations. Under the draft law, businesses employing anywhere from 10 to 40 workers will be able to set up a ?union of individuals? with which to hammer out a labor agreement that includes no terms regarding termination and severance pay.
The only limit that the draft law does set in the process of negotiating employment terms is maintaining the minimum limits on wages, pensions and retirement ages as set out in the National Collective Labor Agreement.
According to the law, labor agreements drawn up by individual businesses with groups of workers cannot supersede the sectoral or national collective agreement in imposing terms of employment that are less favorable for employees, but this is only in the case that the particular business or sector in question has not already signed a sectoral agreement or if the sectoral agreement has expired.
The effect of the draft law hinges on whether or not the minimum wage will be set below the current 751-euro level. If it is not, the reform will bring wages above that down to the levels foreseen in the National Collective Labor Agreement. If the minimum wage is reduced, however, that is an entirely different proposition.
