NEWS

Snag hit in labor contract reforms

One of the most contentious pieces of legislation that the government will have to pass as part of the package of structural reforms ordered by the European Union and the International Monetary Fund was tabled in Parliament yesterday, but there are concerns among Greece’s lenders that the draft law allowing businesses to bypass collective labor contracts is not totally compatible with the bailout memorandum. Under the legislation, businesses would be allowed to set aside the collective contracts that exist in a variety of sectors if they run into financial problems and offer their employees in-house deals instead. Employers would be allowed to pay lower rates than those stipulated in the collective labor deals, although monthly salaries could not dip below the national minimum wage of 740 euros. The draft law also makes it easier and cheaper to fire employees as collective contracts contain strict clauses on how many workers employers can sack and what compensation they must pay them. «Our priority is to maintain jobs so… we can return to growth having lost as few jobs as possible,» insisted Prime Minister George Papandreou during a debate about the package of reforms submitted to Parliament. Sources said the European Commission has expressed concern about some of the provisions in the labor reform, which was drawn up by Labor Minister Louka Katseli, who has publicly expressed skepticism about its contents. It appears that the way the bill has been worded allows collective contracts to apply to businesses that have not previously taken part in the annual negotiation of the labor deals as long as those firms have not sought to draw up in-house agreements with their employees. Brussels says this is not in keeping with the EU-IMF memorandum that Greece signed but sources said it is unlikely to ask the government to change the bill at this point.