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In late May 2005, the management of Greece's OTE telecommunications group signed a controversial enterprise-level collective agreement with the OME-OTE trade union. The deal provides a change in the status of OTE employees, with new recruits no longer having special permanent status and instead being employed on the basis of normal employment law. In parallel, at the end of June parliament passed legislation on a voluntary exit scheme for OTE staff, laying down the terms and conditions for the early retirement of a large number of employees.
On 27 May 2005, management at the Hellenic Telecommunications Organisation (OTE) and the OTE Employee Federation (OME-OTE) signed an enterprise-level collective agreement. This agreement may arguably constitute the most significant change in recent years regarding employment in public utilities and services. According to some commentators, it is a 'trial run' for other public enterprises doing business in a competitive environment. The collective agreement introduces greater employment flexibility, since it does away with the permanent status of OTE employment contracts which has been effect for a number of years.
Content of the agreement
The enterprise-level collective agreement signed at OTE, which is considered to be a sort of quid pro quo for a 'voluntary exit' scheme to be implemented at the company (see below), includes the following provisions.
- Staff will be engaged, after job vacancies are announced, either by means of a competition or by selection following an interview, under open-ended employment contracts, to meet the company’s needs at any given place and time, according to the terms, conditions and procedure determined by management and set out in the relevant announcement.
- This means that for newly hired staff the permanent status previously in effect is abolished, and that from now on the legislation governing the private sector will apply to their employment relationships.
- Such staff will always be engaged subject to a probationary period, under a contract of employment for a fixed term of up to seven months, during which their employment contracts and the provisions of labour legislation will govern staff. Before such contracts expire, employees’ supervisors will evaluate their performance and make a recommendation on whether they should remain with the company or not. Then the OTE central council, following a recommendation by the human resources management department, will deliver an opinion to management in this regard, and management decides on whether or not to hire the employee under an open-ended employment contract.
- By way of exception, OTE can meet emergency or temporary needs by hiring temporary employees under fixed-term contracts, according to the system, terms, procedure and conditions decided on by management.
- Newly hired staff will be included in pay categories and their pay will increase in accordance with the rules applicable to OTE. Therefore a two-speed model is not adopted for people employed under open-ended contracts, either as regards their pay, their career advancement or their insurance coverage, since their pay is governed by contracts which are the same as those of existing permanent staff and which provide the same benefits.
- An open-ended contract of employment may be terminated in accordance with the terms and conditions of current labour legislation. This means that OTE management, like that of any private enterprise, has the managerial prerogative to dismiss employees in accordance with the terms of, and for the reasons provided for in, labour legislation.
- Termination of a contract for financial or technical reasons not falling under the provisions on collective dismissals shall be preceded by an opinion delivered by the central council with regard to the criteria to be used for selecting the employees whose contracts are to be terminated and with regard to the ranking of the criteria. Open-ended contracts that are terminated for financial or technical reasons, therefore, do not establish absolute managerial prerogative. For dismissals of less than 2% of the staff, the central council must deliver an opinion on the selection criteria for the employees to be dismissed. For dismissals of more than 2% of the staff, the procedure dictated by labour legislation must be applied.
- In cases where the employee is responsible for the termination of the open-ended employment contract, the following procedure will apply: before the contract is terminated, the employee is called to a hearing before the central council, at which the reasons why the company intends to terminate the contract of employment are briefly set out, and the employee has the right to personally express his or her views and remarks. This procedure is not associated with the disciplinary procedure, and does not restrict the exercise of the right to terminate, as regards time limits or any other aspect.
The new OTE enterprise-level collective agreement will have the force of law, since it becomes applicable from the date that the law regulating the terms of the scheme for the voluntary exit for OTE staff enters into effect.
OTE voluntary exit scheme
In late June 2005, a regulation on voluntary exit for OTE staff was submitted for voting to parliament. This regulation was introduced in a draft bill on 'capital market matters and other provisions', which has not yet been published in the Government Gazette.
The voluntary exit scheme at OTE provides for the retirement of all employees who will become entitled to a pension before 2012. According to rough calculations, the number of such employees, aged 49 and over, is around 6,200. When they retire from service they will receive the full pension corresponding to their position and rank, a lump sum (gratuity) from their principal social insurance fund, a lump sum (gratuity) from their supplementary social insurance fund, and a retirement bonus, whose amount varies between EUR 5,000 and EUR 30,000, depending on how close to retirement each employee is. The regulation states that :'For permanent OTE staff who are rightfully and obligatorily dismissed before 31 December 2012, who receive a pension before that date from the OTE Staff Insurance Fund (TAP-OTE) and who wish to come under the provisions of this law, as much fictitious time insured as necessary shall be recognised for the purpose of entitlement to receive a pension immediately. In order to calculate the recognised time, staff shall be considered to be in service until the age for dismissal is reached, or the real time of service provided for by the OTE General Staff Rules has elapsed or the conditions for immediately obtaining a pension according to the current provisions have been met.'
Permanent OTE staff falling under the provisions of the regulation and wishing to be governed by the voluntary exit scheme should submit a written application for dismissal within a time limit of three months from the date the law comes into effect.
In accordance with the provisions of the regulation, voluntary exit by OTE staff will be carried out with financial support from TAP-OTE. Specifically, as concerns financing for the OTE voluntary exit scheme, the regulation provides that the cost incurred for each instance of recognition of 'fictitious time insured' for total employer and employee contributions, along with the corresponding amount resulting from the pensions to be granted by TAP-OTE, shall be borne by OTE and the state. The share of the state shall consist in an obligation to make an 'off-exchange transfer' to TAP-OTE, without compensation, of shares representing 4% of OTE’s share capital. The remainder of the cost arising from the implementation of the scheme will be borne by OTE.
Commentary
The signing of the enterprise-level collective agreement at OTE has caused a variety of reactions and tensions in the trade union movement. On one hand, the OME-OTE executive believes that the agreement ensures the future of OTE in a competitive environment, without affecting the interests of present or future employees. On the other hand, the Greek General Confederation of Labour (GSEE) has stated that the agreement has many subtle aspects that serve to shift social, economic and insurance costs onto Greek citizens as a whole. GSEE has also expressed strong opposition and fears that the OTE agreement will be implemented in other public utilities and services as well as in OTE.
Experiments in company restructuring carried out through the widespread implementation of voluntary exit and employment flexibility schemes have been going forward at a particularly brisk pace in recent years. These changes, however, should be made with particular caution and attention so that they do not result in violations of workers’ acquired rights. (Anda Stamati, INE/GSEE)