Brussels, 05/01/2012 (Agence Europe) - Are austerity measures adopted by the Greek government in the context of the EU and IMF support mechanism framework compatible with international law relating to International Labour Organisation (ILO) conventions? It was to provide an answer to this question that a high level ILO mission was in Greece from 19 to 23 September 2011 at the request of the Greek trade union confederation (GSEE). The latter set out a series of possible areas in which international labour agreements may have been breached.
Although the mission's first report, presented to the committee of experts on application of the ILO conventions and recommendations (CEACR) in early December, does not show any major breaches in international labour standards, it nonetheless stipulates that there are concerns about employment market reforms and especially regarding the fact that the place of trade unions in collective negotiation was challenged, and regarding the worrying level of salaries. They therefore consider it necessary for the ILO to be more involved in the process of reform begun in Greece. Experts, moreover, expressed their surprise at the fact that discussions with the Troika (European Commission, ECB and IMF) and the Greek authorities recurrently failed to touch on questions relating to employment objectives (coordination between economic and social policy).
In the first conclusion of the report by the ILO mission, experts described “a volatile and dynamic situation both at the economic and political levels, and observed that social cohesion in Greece is being severely challenged”, by “unprecedented changes” introduced in the Greek labour market institutions “in a manner that seems to be disconnected from Greek realities, thereby weakening, among other things, the impact and real effects of the reforms”. Provisions set in place mainly concern a change in the legal framework for salary negotiation in order to increase flexibility on the labour market. Therefore, a new minimum wage (the so-called labour market “entry” salary), reform of the system for controls on undeclared work, and review of the legislation on protection of employment (extension of trial periods, easing of laws on collective dismissal and part time work) are the preferred ways to reform the labour market.
Several areas linked to the ILO conventions were analysed by the high level mission to underline possible violations of international labour law. Experts expressed their “deep concern” about the legislative changes made after their visit to Greece, in October 2011, allowing “associations of persons to conclude collective agreements at enterprise level”. This may constitute breach of the principle of social dialogue and the right of trade unions to represent workers in the context of collective negotiation. Furthermore, pressure from the Troika is being put on Athens to reduce the level of salaries while revising the collective agreements in order to reduce labour costs. If, officially, the real salary only fell by 9%, other factors, such as changes to the kind of contract, part time work and rotation, have in fact caused a fall of nearly 30% in the private sector (compared to an average fall of 20% in the public sector). Also, according to the report, “due to widespread insolvencies and lack of liquidity, the mission was informed of a potential problem of non-payment or delayed payment of wages in full as well as a widespread tendency in the informal economy to replace terms of employment set through collective agreements (especially at sector level) by individual contracts (largely oral) providing for lower pay, even lower than the floor set by the national general collective agreement”.
ILO experts have given accounts that provide a better picture of the situation on the ground and of the difficulties caused by the crisis. First and foremost, “there seems to be a loss of confidence in the capacity and effectiveness of the state as a regulator and provider of services, especially with regard to taxation, social security, and the justice system. The wide prevalence of undeclared work in the labour market raises questions as to the governance of the entire system”. Finally, widespread criticism of the Troika relates to the fact that the importance of SMEs in Greece is not recognised, given that SMEs employ nearly 90% of workers and are severely affected by austerity measures.
Answering questions in Brussels during October 2011, the European Commission partly justified the austerity measures in Greece underlining, on one hand, that it was necessary to take into account the general macroeconomic context and, on the other, that “policy choices were always made by the Greek government and it was generally believed that none of the measures taken were contrary to international labour standards”, the ILO report states. The result of the high level mission's work will serve as a basis for a complete CEACR report in February 2012. This may include observations and direct requests relating to Greece's failure to comply with one or several international labour conventions. These will not be made public but will be passed on to the Greek authorities. (JK/transl.jl)