OTE model for wider use

Abolition of permanent tenure and bonus cuts for new staff

By Elli Triantafyllou - Kathimerini

The government is planning to extend the use of its recently agreed arrangements for new staff at the Hellenic Telecommunications Organization (OTE) to all other public corporations (both listed and otherwise).

If the new legislative provision is eventually included in the new bill on public corporations, it will mark a significant change in way the broader public sector operates, challenging the notion of permanent tenure and to extra financial benefits for all new staff. Some say it could be the first step in abolishing permanent tenure throughout the public sector.

According to well-informed sources, the overwhelming majority of Cabinet ministers who are responsible for public corporations have, after careful consideration, agreed that if the Karamanlis government wants to go down in history as the “government of reforms,” it will have to take radical initiatives to put an end to the privileged treatment of some staff members in the broader public sector whose performance does not justify it.

Recently, and particularly since Prime Minister Costas Karamanlis rushed through the tabling of the bill on public corporations, ministers have been meeting frequently with Economy and Finance Minister Giorgos Alogoskoufis, who has overall responsibility for the particular bill. In effect, all are agreed as to the political need for initiatives to boost the government’s image and highlight its determination to make changes inspired by a spirit of neo-liberalism and social justice.

“In times of fiscal difficulties, one cannot have wage increases of 3-5 percent in the private sector and then have others receiving actual increases, including bonuses, of up to 9 percent,” said one senior minister, who pointed out that just a few months after the ruling New Democracy party (ND) won the elections, the Union of Greek Banks negotiated with its staff union federation (OTOE) for a new collective labor agreement that included a 5.5 percent raise for lower-income groups and average increases of 9 percent, affecting about 65 percent of bank staff, even though the General Confederation of Greek Workers (GSEE) had asked for just 4.5 percent.

If the plan goes ahead, things will be very different at all public corporations, since it will do away with established ways of thinking regarding permanent tenure and financial benefits at about 49 corporations (11 listed on the Athens Stock Exchange, 15 major unlisted ones, 13 small unlisted ones and 10 port authorities), including the Public Power Corporation (PPC), the Hellenic Railways Organization (OSE), Hellenic Post (ELTA) and the state betting agency (OPAP).

The provisions are based on the pilot accord with OTE, under which new staff are hired on the basis of open-ended contracts. Posts will be advertised and staff recruited either by means of a competition or interviews. Initially they will be given a short-term contract for a trial period of seven months.

The government’s intention to extend the measure to other public corporations and curb bonuses is likely to come up against constitutional obstacles such as laws on collective labor agreements and labor regulations.

This was foreseen by both Alogoskoufis and Labor Minister Panos Panayiotopoulos; the latter is in favor of the move and has played a major role in drafting the bill. According to sources, potential legal obstacles are being dealt with by a group comprising legal advisers to the prime minister and ministries.

The bill’s part in the government’s macroeconomic policy is to strengthen lower-income groups and reduce benefits to the middle-income groups perceived as having received excessive privileges over the past 20 years.

Apart from any potential legal obstacles, there is concern that it might not prove so easy to achieve the understanding reached with OTE with other organizations. Some predict a clash at GSEE and turmoil within ND-affiliated unions. ND’s Central Committee secretary Vangelis Meimarakis does not appear concerned, as he believes that politically courageous initiatives such as these are acceptable to most of society. After all, he was the first to toss out the idea in an interview a few months ago.