Flexible Working Patterns in Greece: Post-Crisis Findings

1. Flexible Working Patterns in Greece during post-crisis: First findings based on a survey on food services industry in Central Greece Achilleas AnagnostopoulosTEI (University of Applied Sciences) of ThessalyStanley Siebert University of Birmingham & IZA Universitadeglistudi di milano, Milan sept 8, 2016

2. The purpose of the presentation • To determine the framework of flexible working arrangements (part-time, temporary time employment and family employment) • To indicate the labour market institutions during pre crisis and the labour reforms during post crisis • To discuss the Labour Relations practices from a Greek survey • To explore how workplaces have responded to an economic downturn and how employment relations practices have been affected

3. Labour Market Institutions • High Unemployment: Never fell lower than 7.0 % the last 25 years • Greece presents one the worst rates in female / long term / youth unemployment among OECD countries • Strict EPL: higher score than the OECD average; • EPL in temp employment, is the third highest regulated • Temporary work agencies were illegal till 2001. Tight regulations introduced with authorisations and reporting requirements for the setting up of temp work agencies • Low Part-time (8%): Legally introduced in late 1990s. • Constraints for businesses which hire part-timers • The LI is stricter to those businesses which hire part-timers • Work Hrs Schedule is needed in a weekly basis by the LI

4. Labour Market Institutions (2) • Centralised Wage Setting: Determined in Athens for all Greece • The General National Collective Agreement (NGCA) defines the minimum tariff of the first pay level for all workers • Collective Bargaining: This agreement can be supplemented by sectoral/occupational agreements which legally extended to the non-union members (if it represents 50% or more of the employees working in the particular sector/occupation) • Enterprise agreements could be signed be firms over 50 workers • Public Sector: Absence of wage bargaining - Greece is the only country where the public servants have no right to bargain over pay issues(ECB paper, no 1406/2011) • Wages based on the government’s annual income policies. • Allowances, benefits, other remunerations could be “negotiated”

5. Flexible Employment Facts & Figures

6. Flexible Forms of Employment “….. Flexible work is used to describe all kinds of employment, which differ from the traditional 9-5 full time work with a permanent contract…” • Part-time • Short-time • Temporary time • Fixed-Term Contract • Seasonal employment • Temporary Empl. Agency • Subcontracting • “Family” employment • Home-work • Piece-work • Tele-work • Subsidized employment • Traineeship (Tertiary) • Stage-(Public Empl. Services)

7. Main Points of Flexible Employment (1) Part-time (PT) employment • PT rate in Greece (from 6,5%) is increasing during crisis (11,5%) • Legally introduced late (1990s) compared with EU countries • The majority of part-timers are female (more than 70%) • Almost 70% of part-timers would prefer to have full time jobs • Permit PT in public sector (2003) mainly in reference to vulnerable groups (long term unemployment etc) • Short time (ST) is a category of part-time employment (an employee work for 8 hrs per day but fewer days per week/month)

8. Main Points of Flexible Employment (2) Part-time (PT) employment • Constraints for businesses which hire part-timers / Employers have to increase the remuneration for those part-timers (a) who work less than 4 hrs per day by 7,5% (b) who work overtime by 10% • The Labour Inspectorate is stricter to those businesses which hire part-timers – require working hours timetable

9. Graph: Incidence of part-time employmentPT employment as a proportion of total employment Notes: * Source: OECD Employment Database: Oecd.stats.org

10. Graph: Incidence of part-time employmentPT employment as a proportion of total employment Notes: * Source: OECD Employment Database: Oecd.stats.org

11. Main Points of Flexible Employment (4) Temporary time (TT) employment • TT rate in Greece (10%), has decreased during the last yrs. • No clear legal framework till recently (2003) • Common characteristic - Fixed-Term Contract (FTC) • FTC under dependent (as an employee) or independent employment (as a subcontractor-free lancer) • If the FTC continues for more than 3yrs then it is transformed into an indeterminate duration contract • Seasonal employment - FTC in specific durations of the yr (for 3-6-8 months) – mainly in tourism industry (hotels & restaurants) food-processing companies and public sector

12. Main Points of Flexible Employment (5) Temporary time (TT) employment • Temporary Employment Agency - FTC between three parties (employee, indirect employer & direct employer -the agency) • Law regarding private employment agencies passed in 2001 with strict rules. Setting up a TWA you need (a) share capital of 176,000 Euros (b) two letters of financial guarantee of 200,000 E c) Authorization by the Special Committee from Labour Inspectorate and Ministry of Labour • It hasn’t been adopted in Greece except in some circumstances in Athens by multinational and large employment size companies. • Manpower Employment Ogranisation loses its monopoly

13. Main Points of Flexible Employment (6) Subsidisedemployment (SE) • Initially applied in 1982 and belongs in the field of active labour market policies • Management and application come mainly from the Manpower Employment Organisation (OAED) • Apply (with wage subsidies) to trainees (under internship scheme) or to unemployed (under Stage or other work experience programs) • Could be considered as a form of temporary employment because there is FTC and a specific duration.

14. Graph: Incidence of temporary employment in depended employment Notes: * Source: OECD Employment Database: Oecd.stats.org

15. Graph: Incidence of temporary employment in depended employment (2) Notes: * Source: OECD Employment Database: Oecd.stats.org

16. “Family” Employment • There is no legal framework for family (non-paid) members • Include parents, siblings and extended family members • These are paid / not paid/ not registered family employees • Statistical Authority officially takes this “category” into consideration • 5% of the total employment (LFS data) - ~1% in the Eurozone • These members are mostly found in micro-enterprises

17. Family Employment (2) • It is very difficult to enforce the labour law in the family-owned • The workplace is considered as the kind of extension of the family • They are mainly females offering their services whenever needed • Taxation is more lenient in Greek family enterprises • They contribute to the “grey” work and consequently to the underground economy • European Employment Observatory Review (2004): Undeclared work is bound to be higher in activities with a high incidence of family workers

18. Labour Reforms During the Crisis • “….Problems were identified in particular in the wage bargaining system, minimum wages for the young, employment protection and flexible working time arrangements….” • (EC, 2010a; IMF, 2010) • “…Greece ranks first on progress towards structural reforms • from 2008 to 2011…” • (OECD, Going for Growth, 2012)

19. Reforms on EPL Dismissals • Reduce the length of dismissal notice period (especially those employees with long tenure) and lower severance payments for white collar workers • Redefine the collective dismissals increasing the threshold for firms with more than 20 employees Fixed-Term Contracts & Temp Work Agencies • Introduce the probationary period (from 2 months to 1 year) • Extend the maximum cumulated duration of the contracts to 36 months (previously 24 months) • Only three renewals of such contracts are permissible during 36 months; additional contracts automatically make the contract at the open-ended status

20. Reforms on Flexible Working Arrangements • The employer has the right – in case of slowdown in activity to • - Introduce short-time working arrangements on daily, weekly or other basis, for a period up to 9 months (there was no specific framework previously). • - Introduce averaging working time over different intervals: • Additional 2-hour work per day (following the 8-hr) for six months (previously four) according to the needs of the firm (reduced working hrs will be returned on the other 6-month per) • Employer may use the maximum 3-month rest period

21. Reforms on Minimum Wages -Collective Agreements -Mediation/Arbitration • Decrease gross national minimum wages by 22% • Lower the minimum wages for young (below 25 yrs) by 32% • New law introduce Special Enterprise Agreements which are more powerful than the sectoral ones (Decentralise ER) • These type of agreements can be signed by any firm • The legal extension of collectively agreed wages is abolished • Both negotiating parties – rather than only labour unions – can resort to arbitration, if mediation fails • Cuts up to 30% on wages in public sector (including abolishment/elimination of the benefits/allowances, reduction 50% of Christmas/Easter bonuses)

22. Table 1a. Main reforms in the Greek Labour Market During the Financial Crisis Thank you!

23. Table 1b. Main reforms in the Greek Labour Market During the Financial Crisis Thank you!

24. Table 1c. Main reforms in the Greek Labour Market During the Financial Crisis Thank you!

25. Table 1. Main reforms in the Greek Labour Market During the Financial Crisis Thank you!

26. Survey Methodology

27. Previous surveys on Labour Flexibility in Greece • Kufidu and Michail (1999 & 2003) carried out with twenty two manufacturing firms employing < 200 employees • Papalexandris (2000) during Cranet survey studied flexible working practices from 10 multinational large scaled firms • Voudouris (2004) examined the use of temps & contractors as forms of flexible employment from 75 companies • National wide surveys conducted by Research Employment Observatory (OEAD) in 2000 & by Institute of Employment (GSEE) in 2002

28. Methodology The SAMPLE • Four (4) prefectures in Greece studied (Thessaly region) • Chamber of Commerce & Industry was selected as the source of our data (for each of the four prefectures) • In order to have a representative sample of businesses, a proportional stratified sampling was chosen • The sample was chosen from the total number of businesses of the databases and its stratification deals with the main business activity and the prefecture

29. Greek Employment Evidence based on Workplace Survey (2007) • Funding derived by the ESF to run a survey in Central Greece • 293 firms visited – 206 questionnaires administered (67%) • Our methodology is based on international standards and makes this survey unique / Design of the questionnaire was based on Workplace Employment Relations Survey (WERS) by UK • In depth interviews with manager/owner/accountant provide mainly quantitative information • Similar questionnaire /survey has not been carried out in Greece • The strong points of our study are (a) the inclusion of micro-enterprises in the sample (b) the idea of researching family workers

30. Data for businesses & employment No of businesses per prefecture Comparisons of Thessaly with Greece Population of Thessaly represents almost 7% of the total population in Greece & 5.5% of the total business population. Distribution (%) of businesses per employment size High percentage of the workforce work is occupied in the retail and wholesale sector

31. Employment by Economic Activities Difference in Greece’s employment (2008-2015) Source: OECD-Employment by Activities

32. Greek Employment Evidence based on surveys

33. Employment Distribution(%) by Workplace Base: All workplaces with 2 or more employees. Figures are weighted and based on responses from 206 firms.

34. (Percent of Workplaces) Distribution by Employment Type OECD (2006) Employment Outlook

35. DescriptiveFindings of the survey Source and Notes: Figures are from the Thessaly Employment Relations Survey (TERS). Survey weights have been used to calculate the percentages of workplaces employing family members. The oversampling of larger workplaces in the TERS can be seen clearly here

36. DescriptiveFindings of the survey Source and Notes: Figures are from the Thessaly Employment Relations Survey (TERS). Under full-time contracts - in the first three rows – we see remarkable differences between small and large workplaces

37. Distribution of Employment Type and Gender by Workplace in Food Services Base: All workplaces with 2 or more employees. Figures are based on responses from 35 firms.

38. DescriptiveFindings of the survey Source and Notes: Figures are from the Thessaly Employment Relations Survey (TERS). A combination of young and female seems to be a major problem in the Greek labour market because females present an extremely low percentage. In addition, old aged are considered “skillful” and trustworthy and thus end up continuing to work for the same owner until retirement

39. DescriptiveFindings of the survey Sources: TERS 2007 - Notes: Survey weights are calculated all percentages. ‡ Part-time is defined when employees work shorter than the normal hours (40 hrs) per week ‡‡ The overtime figures are approximate, interpolated from categorical answers. Note the WERS 1998 figures refer to a sample which excluded public limited companies which were not asked the family ownership question (whether a single individual or family has a controlling interest over 51% ownership over this company)

40. The Labour Inspector Notes: a) Rows are answers to questions with a simple yes/no answer. b) Rows are derived from questions of the form “I would like to find your views on aspects of labour regulation…”, scored on a Likert scale ranging, 1=strongly agree, 2=agree, …, 5=strongly disagree

41. Advice on Employee Relations ‑TERS contrasted with WERS

42. Advice on Employee Relations ‑Food Services - TERS 2016 Base: All workplaces with 2 or more employees. Figures are based on responses from 35 firms.

43. Pay Determination

44. Wage Distribution of Employees

45. Wage Distribution of Employees (2016) Base: All workplaces with 2 or more employees. Figures are based on responses from 35 firms.

46. Wage Distribution of Employees (2016)

47. Weaker Workplace as a Result of the Recession (2016)

48. Actions Taken to Response to Recession(2016)

49. Conclusions • The most important factor that should be considered in the mapping out of a policy for the Greek labour market is the size of a company • Significant differences between micro & “large” workplaces on employment types, concentrating on family employment (35%) • “Family” firms are mainly sole proprietorships which present higher “flexibility/informality”, mainly related to informal work • Temporary employment was the only source of flexibility open especially in the large size companies in pre-crisis period • Part-time employment (following labour law changes) seems as an escape route in post-crisis

50. Conclusions (2) • Survey and Figures confirmed that flexible employment is used less in Greece, when compared to the rest of Europe • Flexible Employment Contracts are a means to fight the unemployment rates in those groups that are most severely affected by the crisis • However, the legalization of Flexible Employment drives employers and probably employees in the Informal Employment