Government | Policy: Nasos Iliopoulos on undeclared work and labour relations in Greece

In Greece undeclared work has been a significant feature of the economy that was estimated in around 25% in 2015. Addressing undeclared work and other labour law violations is a complex and difficult challenge, especially in the current difficult socioeconomic situation marked by high unemployment and the lack of fiscal space. Nevertheless, the government’s planning is based on adopting a new productive model that can lead to fair growth and can protect employment and the employees.

Greek News Agenda spoke* to Nasos Iliopoulos, Special Secretary of the Labour Inspectorate Body (SEPE) about Greece’s efforts to deal with the situation, SEPE’s work and objectives, the magnitude of labour law violations in big businesses, the third review requirements in relation to the trade union law, the infringement of a series of established social rights both in Greece and other EU countries, the deregulation of labour relations and the need for restoration of collective bargaining, as well as the prospects opening up with the possible completion of the economic adjustment programme for Greece in August 2018.

As the Prime Minister has recently stated, “the protection of labour rights has been and still is a central objective of the government“. Would you like to comment on that? Can you give us an account of the work SEPE has done since your appointment there as Special Secretary?

The issue of labour relations constitutes one of the key issues for the future of Greek society. In brief, we would say that growth without protection of labour means returning to the road that brought bankruptcy and the crisis.

Our effort in order to protect labour rights is concentrated on two fronts. One is reinstating the necessary institutional regulations, such as restoring collective bargaining. The second is the correct operation of control mechanisms so that workers’ rights are actually respected. In the three years of our government, we have succeeded in reducing undeclared work in high-deliquency sectors from 19.2% to 12.5%. At the same time, however, we are also moving into areas that generally enhance the operational ability of Labour Inspection, such as our new information system. Finally, I think that a very crucial step was the passage of Law 4488/17 that includes a series of measures against underdeclared, undeclared and unpaid work.

The main opposition and the lenders argue that growth and recovery are conditional on the deregulation and flexibilization of labour. How would you answer that?

Limiting ourselves simply to the concept of growth without setting quality indicators is a major mistake. Growth on what terms and under what social conditions? Since 2010 we have experience a huge process of labour devaluation that brought about purely negative results for the social majority. Actually, the effect was negative even on the competitiveness of the Greek economy. What this political choice has achieved was to further exacerbate social inequality. Therefore, the view that deregulation of labour is necessary for growth can appear correct only from the perspective of the few –it is not so for the social majority.

Could you talk to us about what the negotiations for the third review of the programme for Greece entail as far as labour relations are concerned?

As part of the third review, in the case businesses that have declared bankruptcy, we succeeded in ensuring that, following the auction process, employees will be the first to be compensated, for up to six wages. Up to now banks were the priority and this did not leave any funds for the repayment of accrued salaries. We will also move on to changing the fine for undeclared work. Τhere will be two main changes compared to today. The first is that a proof of infringement will generate employers’ insurance contributions for the employee. The second is that there will be the possibility of reducing the fine if the undeclared worker is hired.

Finally, in the context of the third review by the institutions, there were a number of requirements in relation to the trade union law. The only thing that will eventually change is related to the announcement of a strike by first-level trade unions. In particular, the quorum for the assembly that will vote on the decision to strike is required to be at least half of the members of the union that have fulfilled their financial obligations. From this level above, the decision to strike is taken as today, by simple majority. This change does not apply to first-level trade unions of national or wider range.

Which are the most common labour law violations in Greece? Who are the biggest offenders in terms of sector as well as size (small, medium-size or big businesses)?

While in the previous period, the biggest problem was undeclared work, today we see a shift towards under-declared work. This type of violation refers to declaring as part-time employees that actually work full-time, or to never declaring employees’ overtime work. All types of infringement are found in different sectors. But what is really impressive is the magnitude of violations in big businesses, such as banks. The total amount of fines for under-declared work in banks exceeds two million euros, and on the basis of the recent law, we have suspended operations for three days at a certain bank branch.

In what way are labour relations in Greece different from other European countries? What would you consider the most important change that needs to be implemented in this area in Greece?

The deregulation of labour relations has unfortunately been a common pattern for the whole of Europe. The disintegration phenomena we face today at the EU level, as well as the rise of far-right forces in Europe are directly related to the infringement of a series of established social rights such as labour rights. In this respect, labour protection is central to the nature of the European project and the preservation of democracy. Restoring the two basic principles of collective agreements, i.e. the extension of sectoral agreements and the favorability principle, will be a big positive step. However, coordinated moves by political and social forces across Europe are needed to preserve and expand social and labour rights.

All three memoranda have been catastrophic for labour relations in Greece. Do you see any new prospects opening up with the possible completion of the third economic adjustment program in August 2018?

It is clear that today the completion of the program in August is the prevailing scenario on which we are operating. The fact that the most recent data evidences a steady trend of declining unemployment – it has already dropped by more than 5% – is important news. We know well that we still have a lot of work ahead of us in this area, but it is obvious that things can change. At the same time, the end of the program means re-launching collective bargaining, which is a vital tool in the hands of employees in order to improve both wages and working conditions in general. The reduction of unemployment, combined with the re-regulation of labour relations and the upgrading of control mechanisms can create a completely different framework for labour relations the day after the memorandum.

*Interview by Julia Livaditi

Read more about Labour Inspectorate Body Structure and Organization here