Sunday, 21 August 2011

Reforming Greek Industrial Relations: Towards a Better Social Partnership

The Problem

Greek industrial relations have been plagued by imbalanced state interference and weak representation which have significantly hindered the development of a vibrant, strong and similar to other EU countries social partnership. Historically, Greek social partners have lacked independence, failed to adequately represent Greece’s working population and had a very narrow set of priorities. These features of the Greek employment relations system exacerbate social injustice, socioeconomic inequalities and pose additional challenges to Greek democracy. This proposal seeks to suggest novel policy measures to strengthen both quantitatively and qualitatively Greek social partnership.

With regard to the imbalanced state interference to Greek industrial relations, Greece’s dominant public policy model is statism - namely the intervention of the state in economic and social activities (Petmesidou 1991). Statism is combined with clientelism where political representatives (patrons) satisfy their party supporters (clients) through favours. In particular, the public sector has been strategically used by the political elites to promote clientelism and statism: 1) through the provision of employment in the public sector they are able to satisfy voters and/or expand their electorate; 2) through the control of the allocation of state funds promote the significant role of the state in Greek economy and society. Hence, Greek governments are traditionally perceived as the manager of the state resources whose allocation is the main prize of the societal struggle (Petmesidou, 1991). Consequently, social provisions and welfare (redistributive) resources have not been allocated on the basis of social need and social citizenship rights; rather, they are restricted to those groups that were the winners in the struggle for access to political power and the state machinery –namely, public sector employees (ibid: 32). Moreover, a significant side-effect of the imbalanced state interference to Greek industrial relations is that social policy has been restricted to scant, piecemeal measures taken by the state in cases of emergency (Iatrides, 1980). Additionally, despite its interventionist nature, the Greek state provides limited support to non-workers who cannot afford to pay social contributions (Lazaridis and Koumandraki 2001). For instance, Greece remains one of the few countries in the OECD and the only one in the EU where there is no minimum income scheme for individuals or families (European Commission 1999; Matsagganis 2005).
With regard to the problem of weak representation, Greek social partnership is significantly distorted as statism and clientelism have marginalised any autonomous political organisation of the disadvantaged classes or societal groups (Diamandouros 1983; Haralambis, 1989). Firstly, trade unions have been highly subordinate to party politics, while the pressure from civil society and other societal actors for redistribution based on need and not political access has been extremely weak (Marinakou 1998: 241). Secondly, in Greece there is a stark division between the protected core of the labour market and the rest, that is temporary, irregular, informal employees and the unemployed (Katrougalos and Lazaridis 2003: 33-34). Thirdly, Greek trade unions represent mainly the public sector (90% of DEKO and 60% of the public sector) with a minuscule representation of the private sector (18% of the 3% of the private sector). Further, data for 2003 reveal that only 7% of the total adult population (total wage earners) is represented by the Greek trade unions (European Commission 2006: 24; Ioannou 2009: 15). Likewise, the Greek employers’ federation represents mainly big corporations (including wider sector public companies) and under-represents smaller companies (Featherstone and Papadimitriou 2008: 48). Consequently, Greek social partnership fails to represent big parts of the Greek society; additionally, youth, unemployed, women, disabled and immigrants are not represented in the Greek social dialogue process (Matsagganis 2007).
This has led to a vicious circle of inefficient public policy which neglects large parts of Greek society, mainly those in most need of the strongest support and protection from social partnership. Moreover, Greek social dialogue has been dominated by issues of remuneration (e.g. pay and pensions) which usually favour insiders and public sector workers. More specifically, since the 1980s successive governments proceeded to award substantial salary increases for (wider) public sector employees, which were above the inflation rate (Venieris 2006). This policy, however, had a negative effect on unemployment, which became an acute problem, and was especially pronounced among the young and among women (Katrougalos and Lazaridis 2003: 59). In addition, all aspects of the public sector’s employment relations are regulated through state decrees and/or laws which generally set a more favourable working conditions’ framework than the one in the private sector (cf. Papapetrou 2006; Zartaloudis 2011). Hence, public sector personnel expenditures (including pensions), despite a temporary slowdown in the mid-1990s, constitute the principal expenditure item in the ordinary budget (Papapetrou 2006: 451; OECD 2002). Further, other issues, such as social protection and gender equality, have been traditionally neglected in the social dialogue process.
Policy suggestions
To address these problems, this policy proposal suggests:
·      Imposition of quotas to all social partners:
o   equal distribution between men and women; age representation with at least 20% young people (16-34); 10% immigrants (where applicable);
o   proportionate representation between public - private sector (excluding typically public/private unions)
·      Abolition of political-party affiliated organisations within social partners; members will be represented either directly or by electing a representative committee for its sector and will have no stated political affiliation. Party groups may exist but only independently (like NGOs)
·      Abolition of any political party’s financial support; funding through own members and/or state budget with external supervision
·      5 years ‘hibernation’ for representatives for another public office after the end of their term
·      Maximum 3 terms for all representatives

Towards an all inclusive social partnership:
  • Everybody should be registered as a union member unless she/he rejects this right;
  • Unemployed should be also members of unions – their membership should be covered by OAED in addition to the unemployment benefit;
  • Social benefits should stem from trade union membership; trade unions should mediate between the state and the workers/unemployed in benefit provision;
  • Institutionalisation of trade union membership in all companies through sample selection (e.g. every 2 years random selection of employees as trade union representatives)
  • Use of new technologies (internet/e-voting) to facilitate participation

Strengthening consensual organisations (e.g. OKE’s opinions should become obligatory in social dialogue);
Promotion of Flexicurity:

  • Diminish LM gaps between insiders and outsiders
  • Establish a more universalistic welfare state where protection is based on social rights and not only contributions (cf. Marshall 1950) by introducing measures such as: minimum income; longer unemployment benefit; and more aggressive use of ALMPs which should not be used as replacement to passive support.

 In accordance with the successful model of the Scandinavian countries, this proposal understands social partners as an essential component of a well-functioning economy. However, unless Greek social partnership becomes all-inclusive and independent of the Greek state and political parties, social partners will not be able to fulfil this indispensable role. This becomes even more imperative given the push towards decentralisation to firm level agreements under the Troika (EC, ECB and IMF) demands. If membership becomes more universal then Greece may be in position to emulate what is happening in some Northern EU countries (e.g. Scandinavia, Germany) where each firm is relatively free to negotiate its own agreements; otherwise, this may lead to social dumping as the agreements may not be a result of a balanced negotiation between employers and employees. Additionally, Greece should try to emulate the successful experiences of most EU countries where unions and employers are independent from the state; trade unions are based on mass membership and often act as welfare providers (e.g. support to the unemployed; provision of training and social security); and more importantly, social partnership coexists with some type of universalistic welfare state.

In summary, this proposal argues for a radical reform of the Greek social partners, that aims to create a more inclusive and representative social partnership, free from state and partisan interventionism. This new social partnership will be much more efficient and egalitarian than the current status quo.

Sotiris Zartaloudis, European Institute and Hellenic Observatory, LSE

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