EurWORK European Observatory of Working Life

Government awards 4.5% pay rise to public servants

About

Country: 
Greece
Author: 
Sofia Lampousaki
Sector: 
Public Sector
Institution: 
Labour Institute of Greek General Confederation of Labour (INE/GSEE)

In May 2008, the Greek government announced that public servants will receive a 4.5% pay increase in 2008, in two instalments. The Confederation of Public Servants (ADEDY) reacted by saying that this is below inflation and has warned of industrial action over pay. ADEDY is demanding a uniform pay scale for public servants, with a minimum basic monthly salary of €1,300.

Collective bargaining in the public services

Collective bargaining on the terms and conditions of employment for public servants is regulated by Law 2738/1999. The law lays down the issues – such as training, and health and safety – on which collective agreements may be signed in the public services. Formal agreements may not be concluded on pay and pensions, but de facto collective bargaining occurs, which may in theory lead to ‘informal’ agreements (GR9911155F). In practice, bargaining does not give rise to such informal agreements, and pay increases are awarded unilaterally, through the approval by Parliament of a circular submitted by the Ministry of Finance.

ADEDY’S pay demands

The Confederation of Public Servants (Ανώτατη Διοίκηση Ενώσεων Δημοσίων Υπαλλήλων, ADEDY) is the central organisation for public service unions. One of its central demands is for the introduction of a single pay scale. At present a public servants receive a basic salary, depending on their level of education and years of service. On top of this basic amount, a large number of pay supplements have been introduced (press reports put their number at over 100), which are mainly granted on the basis of the worker’s department and occupation. A significant part of public servants’ annual pay increases are not the result of higher basic pay but of higher individual allowances or new pay supplements that are granted. This ‘allowances policy’ has, according to ADEDY, had the following consequences:

  • It has kept overall pay and pensions at low levels. Pensions and other benefits (such as the ‘13th month’ and ‘14th month’ annual bonuses) are calculated exclusively on basic pay rather than total pay (ie basic pay plus pay supplements). Thus a slight increase in basic pay does not cause pensions and overall pay to rise significantly.
  • It has led to wage disparities among public servants. The special allowances that are granted give rise to major differences in the pay of public servants, depending on the department to which they have been appointed. Thus conflicts arise among employees and central demands are weakened.

ADEDY is demanding abolition of the allowance policy, the incorporation of pay supplements in the basic salary, and equalisation of public servants’ pay, with a basic minimum monthly salary of €1,300.

Pay policy for 2008

According to the circular submitted to Parliament for approval in May 2008 by the Deputy Minister of Finance, public services pay policy for 2008 is as follows:

  • Public servants’ basic pay increases by 2.5% from 1 January 2008 (backdated) and by a further 2% from 1 October.
  • Total paybill will be increased by another 1.13% due to staff moving to a new level on the pay scale, receiving pay-related promotions and so on
  • One-third of the current performance bonus will be incorporated in the minimum basic salary for staff with all education levels (public servants are categorised as having completed compulsory education, secondary education, technological education or tertiary education). Therefore the minimum basic monthly salary for public servants who have only completed compulsory education increases from €651 at the end of 2007 to €697 from 1 January 2008 and to €711 from 1 October. The minimum basic monthly salary for public servants who have completed secondary education increases from €762 at the end of 2007 to €811from 1 January 2008 and to €827 from 1 October. The minimum basic monthly salary for public servants who have completed technological education increases from €853 at the end of 2007 to €904 from 1 January 2008 and to €922 from 1 October. The minimum basic monthly salary for public servants who have completed tertiary education increases from €892 at the end of 2007 to €944 from 1 January 2008 and to €963 from 1 October.
  • Pensions increase by 3% from 1 January 2008 and by a further 2% from 1 October.

Reactions from ADEDY and political parties

After the conservative New Democracy government made known its public services pay policy for 2008, ADEDY issued a statement noting the ‘continuation of the austerity policy’ in the public sector, and stating that ‘on average, the increases paid are lagging behind even the official inflation rate, which is currently 4.5%’. The President of ADEDY warned of industrial action in the autumn, when the new state budget is finalised. The Deputy Minister of Finance has argued that all possible leeway in the budget has been used in order to enable wage and pension increases to withstand inflationary pressures, and stressed that the difficult international economic situation does not allow any more to be granted.

The opposition political parties argue that the wage and pension increases awarded are negligible and will be swallowed up by high inflation, while the situation is further exacerbated by soaring price rises for many goods and ‘profiteering’ in the market.

Sofia Lampousaki, Labour Institute of Greek General Confederation of Labour (INE/GSEE)