Crunch time for Greek labor reforms

Experts’ proposals expected to include changes to collective contracts, minimum wage and group layoffs

It’s decision time for Greek labor reform, as an international panel of experts is in the final stages of recording its definitive positions on a series of major issues such as group layoffs, union legislation and the negotiations on collective contracts.

Last week the International Monetary Fund, which forms part of the committee, as does the Greek government, made it clear in its report on the Greek economy that the ambitious reforms on the labor front have to continue. It stressed that none of the reforms introduced since 2011 should be changed, and asked for measures “aligning Greece’s framework with best international practices on group layoffs and collective action.” The Fund has expressed the same positions, according to sources, on the panel of experts.

It is no coincidence that the is- sues which cause tensions among committee members are those put forward by the government concerning changes to the reforms introduced as part of the bailout programs. Regardless, the experts are expected to propose further changes to the legislation, with interventions in the area of collective negotiations, while no changes are foreseen in terms of union laws.

As agreed at a meeting between the country’s creditors and Labor Minister Giorgos Katrougalos ear- lier this month, the panel’s conclusions will form the basis for the negotiations to begin on October 17. It appears that the focal point will be the method for the calculation of the minimum wage in Greece.

It should be noted that neither the panel experts’ discussions nor the aforementioned IMF report mentioned the issue of the minimum wage, which, according to data submitted by the Greek side, has declined in the years of the fi- nancial crisis by 19.5 percent, while in all other European Union countries it has been on the rise.

Sources say that a simple majority on the panel will propose that the level of the minimum wage be returned to the jurisdiction of the social partners (employers and employees) via the National General Collective Labor Contract. It is likely that for the IMF’s disagreement to be overcome, an independent body will need to get involved in the process.