ECONOMY

Legislative act to cut July raises, 14th salary

The government is preparing a legislative act that will suspend businesses’ obligation to raise their basic salaries by 2.6 percent as of July 2012, in accordance with the collective labor contract agreed by employers and labor unions.

Kathimerini has learned that the same act is also going to include the incorporation of about half of the Christmas, Easter and summer bonuses into the monthly salaries, effectively signalling the end of the so-called 14th salary.

The government will use this method to bypass the parliamentary procedure and avoid having to come to an agreement with unions and employers. In doing so, they would satisfy one of the demands of the European Union and the International Monetary Fund, which were set out in a letter to the Labor Ministry this week.

In their letter, the troika representatives note that while the 13th and 14th salaries have been abolished in the public sector, they still apply to the private sector as well as to state corporations that operate infrastructure networks, such as the Public Power Corporation and the Athens and Thessaloniki Water Companies.