National Report on Restructuring in Greece

Transcription

1 National Report on Restructuring in Greece by Anda Stamati, Scientific consultant Institute of Labour GSEE/ADEDY

2 OUTLINE OF PRESENTATION Working hypothesis Situation in the economy and the labour market in Greece Restructuring in Greece Case studies Conclusions

3 In Greece, the phenomenon of restructuring shows particularities compared to most other European countries, which relate to: the structure of the Greek economy, the lack of overall planning before a restructuring is carried out the lack of meaningful social dialogue. As a result of this, there are very few measures and policies for managing the phenomenon in order to keep social costs to a minimum

4 Brief description of the economy and the labour market in Greece Features of the labour force in Greece are the low proportion of paid employment (20% lower than Community averages) and an especially high proportion of self employment. One very basic aspect of the Greek economy is the size of Greek enterprises. More specifically, the Greek labour market is characterised by small and medium-sized enterprises, 98% of which employ 1-10 people; as a result most paid employees work in such enterprises.

5 Brief description of the economy and the labour market in Greece At present in Greece unemployment stands at around 12%, according to official statistical data (2nd quarter of 2010). An examination of employment inflows and outflows in the 2nd quarter of 2010 reveals that there was a negative balance between jobs created and jobs lost.

6 Brief description of the economy and the labour market in Greece The entry of immigrants into the Greek labour market has a significant effect on its image, since studies and recent data have shown that the number of immigrants integrated in the labour market represents 1/10 of the whole labour force (9.5%). Industrial relations in Greece are mainly regulated by legislation.

7 Brief description of the economy and the labour market in Greece In Greece union density is at low levels, and stands at 28%. Labour market prospects in the context of the financial crisis and the recession plaguing the Greek economy are inauspicious (14.5% unemployment in 2011, 15% unemployment in 2012).

8 Restructuring in Greece Decisions for restructuring are not accompanied by studies or research on the long-term effects of such moves, In conjunction with the lack of specific measures by the state (such as incentives to develop innovation or technological restructuring), and The lack of the respective and networks, Restructuring often wind up with a focus on reducing labour costs by cutting back staff in the enterprises concerned.

9 Restructuring in Greece The fact that Greek economy is based on small and medium-sized enterprises (SMEs), makes it difficult to record the phenomenon of restructuring in Greece or to map out policies and strategies to address their impacts.

10 Restructuring in Greece The most active sectors are the service sectors, (banking, insurance, trade), the sector of construction and the food and beverages industry. Planning for restructuring is a decision taken exclusively by management of an enterprise, with no prior consultation with the workers or the state with a view to adopting measures, policies and infrastructures for their evaluation.

11 Restructuring in Greece In practice, the information and consultation procedure for planning of a restructuring, although provided for by legislation, takes place at a later stage, when the decision has already been taken. In Greece the concept of social dialogue, bargaining between the basic social partners has not been developed to the extent that they have been in other European countries.

12 Restructuring in Greece The practice of local employment pacts, which could be characterised as an important tool for foreseeing and preparing for restructuring (as is the case in many EU countries) has not really provoked the interest and involvement of the social partners in local societies and financial forces.

13 Restructuring in Greece In Greece there are no specific measures to address the negative consequences that may arise when a restructuring is carried out. In the event that a labour agreement is terminated, Labour Force Employment Organisation (OAED) pays, under certain conditions and for a certain length of time, financial aid (unemployment benefits) to the employees who were dismissed.

14 Restructuring in Greece There are no specific employment policies (active and passive) to address the consequences of the restructuring In general employment policies refer to: Vocational training programmes for unemployed and employed people, Programmes to subsidise employers to employ unemployed people, and Subsidies for unemployed people to create their own enterprises; most are financed by the European Social Fund.

15 Case studies Restructuring of Hellenic Railways Organisation (OSE) Merger of Mytilineos Group -Aluminium of Greece Olympic Air Hellenic Telecommunications Organisation (OTE) Coca Cola -3E.

16 Restructuring of Hellenic Railways Organisation (OSE) In 2009, the competent Minister of Transport presented a scheme for restructuring OSE, according to which the restructuring of OSE was considered imperative, otherwise its continued operation would become problematic, due to increasing deficits as well as route safety issues. The restructuring measures included staff cutbacks for the purpose of keeping costs down.

17 Restructuring of Hellenic Railways Organisation (OSE) Staff are to be cut back mainly through voluntary exit programmes. Staff cutbacks are an aspect of OSE s financial recovery and are one of the two actions to reduce costs. The other action in this direction is reducing investments by keeping project costs down.

18 Restructuring of Hellenic Railways Organisation (OSE) Evaluation of this restructuring is difficult because since it has not yet been completed it is not possible to assess its results. The lack of social dialogue, information and consultation with the competent bodies, since prior to the restructuring there were no attempts at providing information, either on the reasons or on the planning strategy of restructuring.

19 Restructuring of Hellenic Railways Organisation (OSE) As a positive element, the decision to modernise and expand the network could be evaluated. Among the negative elements are inadequate planning and lack of an integrated strategy for the company s recovery, as well as inadequate training of the staff.

20 Merger of Mytilineos Group - Aluminium of Greece A merger by absorption was undergone by the company Aluminium of Greece, which was absorbed by the Mytilineos Group of Companies. This merger took place in At the time the merger was announced, the Mytilineos Group had around 3,000 employees, and Aluminium of Greece had around 1,300. The acquisition was made for business reasons. The acquisition was carried out in a climate of consensus, as the two companies activity was complementary.

21 Merger of Mytilineos Group - Aluminium of Greece No adverse changes in industrial relations for staff. Both companies already held a leading position in the areas where they did business. There were no important changes in the local or national economy as a whole. Production activity remained in the same geographical area.

22 Olympic Air In 2009 Olympic Airlines (technical base, flight operations and logo), whose main shareholder up to then was the Greek state, was sold to Marfin Investment Group (MIG). The privatisation scheme for the company, which was designed by the government and approved by the European Commission, became a law of the state. It provided for the transfer of assets of Olympic Airlines and Olympic Airlines-Services to three different companies, which have already either established or will be established especially for this purpose.

23 Olympic Air The results of this restructuring are not yet visible, since its evaluation period is short. The company s flight operations appear to have been substantially downsized, since long flights have been eliminated and the domestic network of flights has been reinforced. Alliances are sought with airline companies abroad, so as to cover new routes Improve the services provided through better organization and the introduction of new technology.

24 Olympic Air As concerns the employees, 1,200 were reemployed by the new company under individual employment contracts, 600 have been transferred to the public sector, and 1,100 opted for early retirement programmes. No social dialogue preceded the restructuring procedure.

25 Olympic Air A lack of unity among the trade union bodies was noted. The restructuring was combined with voluntary exit programmes. The rights of workers were not safeguarded in the transfer from the old to the new employer, since those who were re-hired signed individual contracts of employment with new, unfavourable terms and conditions of employment.

26 Hellenic Telecommunications Organisation (OTE) OTE is active in the sector of telephony and telecommunications, where up to the 1990s it enjoyed a monopoly in Greece. In 2007 the government assigned to Deutsche Telekom a new package of shares. Together with the deed of transfer the government signed an agreement saying that it assigns the management of OTE to Deutsche Telekom Lastly, in 2009 a new package of shares was transferred to Deutsche Telekom, bringing the its stake up to 30% and that of the Greek state to 20%.

27 Hellenic Telecommunications Organisation (OTE) The restructuring procedure was not based on social dialogue. There was little information and consultation with the representatives of the employees. For the most part the restructuring was based on voluntary exit and early retirement programmes for the old employees (around 5,000 employees).

28 Hellenic Telecommunications Organisation (OTE) The programmes were made specific through an enterprise-level collective labour agreement between management and the most representative trade union organisation in the company, OME-OTE; in this collective agreement it was also agreed to do away with permanent status for newly hired staff. The company introduced new technology and modernisation in general.

29 Hellenic Telecommunications Organisation (OTE) It appears to have lost its social role after the restructuring, along with a number of its qualitative characteristics. The prices of the services provided rose significantly. The employees employment relationships and rights were substantially violated.

30 Coca Cola -3E In January 2006, the Coca-Cola - 3E company announced a restructuring plan, which included a decrease in the number of employees. Specifically, the company was planning to cease operations at three warehouses in the country at large, and to move its Athens factory to an area outside Attica. At that time, Coca-Cola - 3E in Greece had 2,500 employees.

31 Coca Cola -3E The whole procedure was carried out without any social dialogue. There was no participation of the state in the restructuring procedure, so as to guarantee that it would be adhered to, in accordance with the current statutory framework, and so as to defend the employees rights. The number of employees who lost their jobs is 20.

32 Conclusions Restructurings are facilitated in cases where there is an effective statutory framework to protect incomes (unemployment benefits, vocational training, etc). In most cases early retirement early retirement of employees in the enterprises involved in the restructuring is opted for as a measure, rather than boosting incompany training policies or engagement of employees in enterprises of a similar type.

33 Conclusions Vocational training is not often linked with the Greek labour market. The measure to subsidise new entrepreneurs is not viewed positively, both due to the structure of enterprises in Greece and also due to inadequate information for self-employed people, as well as the difficulties and obstacles of the banking system.

34 Conclusions In special cases where unemployment on the local level is particularly high and is associated with the closure of a large number of enterprises in the same sector, the state has introduced more specific measures, such as payment of more specific allowances, subsidised training programmes, or transfer of affected workers to other enterprises.

35 Conclusions Restructurings are usually accompanied by an increase in the share of exports (for companies that do export business), and an increase in sales and investments in the first three years after the actions are announced. Innovations in company policies and strategies accompanying restructurings manifest themselves mainly in the form of organisational changes and investments in new products, and less often in new partnerships, introduction of new technology or creation of new skills.

36 Conclusions Staff reductions are mainly encountered after a restructuring, whereas the 12 months preceding or following the restructuring usually constitute the crucial period during which the decrease in the number of employees occurs. Voluntary exit is reported as the most common form of staff reduction. This practice is implemented through failure to replace retiring employees when the staff reduction precedes the restructuring, and through the practice of dismissals when the staff reduction follows the restructuring.

37 Conclusions The phenomenon of restructurings is as a rule linked with information and consultation procedures among the representatives of labour and management, after the restructuring decision has been taken, but these procedures usually do not culminate in agreements regarding the terms for the transition to the new ownership status.

38 Conclusions Reduction of labour costs is achieved mainly through intensification of work and an increase in flexible forms of employment, mainly expressed through the use of temporary fixed-term contracts and subcontracting using the system of outsourcing. There are differences between restructurings in public and private enterprises.

39 Conclusions Mechanisms to provide for and manage restructurings (either in the public or in the private sector) are non-existent existent. The manner of intervention depends on the reactions of the workers and their trade unions. The results of restructurings have to do with the strength of the trade unions and by extension with the terms for consultation.

40 Conclusions Measures for protection and consultation are minimal and almost non-existent in the private sector, with mutual distrust on the part of the social partners. In Greece neither provision for restructuring, on the level of preparation through best practices for instance, nor its management in terms of minimising social costs and avoiding dismissals are implemented, and as a result conflicts and job losses have been observed.

41 Conclusions Greece appears not to have made use to the extent necessary of the action programmes of the European Commission in order to support provision for and management of restructuring, and to date it has failed to assess the effects and the weaknesses of the various cases of restructuring.