Observation (CEACR) - adopted 2010, published 100th ILC session (2011)

The Committee refers to its comments under the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), with regard to the observations communicated by the Greek General Confederation of Labour (GSEE) with the support of the International Trade Union Confederation (ITUC) and the European Trade Union Confederation (ETUC) on the impact of the measures introduced in the framework of the mechanism to support the Greek economy, on the application of the Convention.

The GSEE refers to the adoption of Act No. 3845 of 5 May 2010 on “Measures to implement a mechanism to support the Greek economy by the Member States of the Euro area and the International Monetary Fund”. The appendix to this Act contains two Memorandums of Understanding concerning economic and financial policies and specific economic conditionality concluded between the Greek Ministry of Finance and the Governor of the Bank of Greece on one side and the President of the Eurogroup, the European Commission, the European Central Bank and the International Monetary Fund on the other side, which list a series of time-bound commitments to be undertaken by the Government, including efforts to moderate pensions. According to the GSEE these commitments resulted in the adoption on 8 July 2010 of Act No. 3863/2010 on the “New Social Security System and relevant provisions” (FEK A’115) introducing a radical reform of the pension system for all current and future employees, which provides for the withdrawal of the State from the obligation to co-fund the social security system and limits its liability only to the funding of basic pensions as of 2015, as well as for the withdrawal of the State’s guarantee as regards payment of supplementary pensions. The unified statutory retirement age is raised to 65 years by December 2015 and the retirement age of women in the public sector is raised to 65 by 2013. The Act also provides for the calculation of pensions on the basis of the entire working career; the rise of the minimum contribution period from 37 to 40 years by 2015; the restriction of early retirement and the increase of the minimum retirement age of 60 years by 1 January 2011, including for workers in heavy and arduous professions and those with 40 years of contributions; the introduction of reduced pension benefits for people retiring between the ages of 60–65 with less than 40 years of contribution; indexation of pensions on the basis of GNP and the consumer price index; the introduction of a means-tested minimum guaranteed pension for people aged above 65 years of age.

According to the GSEE, these substantial parametric changes established by Act No. 3863/2010 without adequate consultations with the social partners violate workers’ social security rights and negate their entitlements and rightful expectations, as the reform will result in a reduction in the replacement rate of pensions by 20 per cent on average. The GSEE further refers to a decision of the Greek Court of Audit which confirmed the existence of constitutional irregularities and the reversal of acquired rights in this Act. The GSEE considers that by introducing permanent reforms the Government has failed to observe the Convention and disregarded alternative ways to address the long-term viability and efficiency of the social security system, which do not inflict so much hardship on the persons protected.

The Committee recalls the importance it attaches to the general responsibility to be assumed by the State for the sustainable financing and management of the national social security system, which is set out in Articles 71(3) and 72(2) of the Convention. The Committee therefore asks the Government to provide detailed information in its next report on the application of each Article of the Convention in accordance with the report form adopted by the Governing Body, including as regards the concrete provisions of the new legislation and precise the basis of the calculation of the replacement level of pensions according to the new rules. The Committee will examine the comments by the GSEE, along with the Government’s observations thereto, as well as the Government’s report due in 2011, at its next session.