ECONOMY

OTE’s landmark deal

Following negotiations that lasted many months, Greece’s main fixed-line telecoms operator OTE yesterday reached a landmark agreement with the unions on easing the virtually permanent employment status in force to date. The deal, according to which new employees will be hired on open-ended contracts but will not enjoy the status of civil servants as previously, is seen as a trade-off with the unions, which in return will get a favorable voluntary early retirement package. The two sides signed a collective labor pact expected to come into force on the same date as the early retirement package. The pact includes a clause that the corporation’s central personnel board will have to express an opinion on the criteria to be used should management decide unilaterally to end open-ended contracts, as well as on the prioritization of such criteria. The composition of the five-member board, however, is seen as favoring management. The easing of the terms of employment does not apply to present employees, but only to those who are hired after the pact comes into force, who will nevertheless enjoy the same promotion and remuneration prospects as older employees. OTE is the first among the formerly state-controlled public utilities to ease its terms of employment and the development is seen as a forerunner of changes to come in the public sector itself. The corporation said in a statement that the agreement opens the way for its restructuring, which Managing Director Panagis Vourloumis has said is vital for its competitiveness. The early retirement side of the deal will be tabled in Parliament next week, quite likely as part of a draft bill providing for a solution of the problem of unfunded pension liabilities of banks Emporiki and Agricultural, where the problem is most serious. The government, being a major shareholder, is most anxious to see a settlement soon. The voluntary retirement package has an estimated cost of 1.6 billion euros. A report by the General Accounting Office, which will determine the size of government’s contribution, is expected with interest.