Second postponement in the process of readjustment minimum wage brings the pandemic coronavirus. According to a provision included in the ministry's omnibus bill Health, which is being voted on Monday with the emergency procedures, it is provided that the procedure adjustment of the minimum wage – which was due to start at the end of November – extended by four months.
Eleo coronavirus, the process postponed for the second time, so that the final stage can now begin 10 days in March and complete the second 15 days in July, when the Minister of Labor should recommend new minimum wage in the cabinet.
According to the law, the amount of minimum wage and daily wages must be determined «taking into account the situation of Greek economy and its prospects for growth in terms of productivity, prices, and competitiveness, employment, unemployment rate, incomes, and wages.» The same procedure stipulates that The Minister of Labor is not bound by the experts' findings. but receives it consideration of to propose the new salary level to the cabinet.
With the extremely unfavorable situation developing in the Greek economy and the recession galloping above the 10% threshold for 2020, the issue of minimum wage is expected to take center stage in 2021. In the run-up to the elections and long before the pandemic emerged coronavirus, the government had linked the adjustment of the minimum wage to the rate of GDP growth. In this context, the prime minister had announced that increases in minimum wages would move at twice the rate of GDP growth. As GDP plunges, pressured to an unprecedented degree by pandemic measures, the question is what will happen to the minimum wage in 2021.
The reports of the Pissaridis Commission
The final report of the Pissaridis Committee decides that the 2014 changes that gave the government the power to set wages should be maintained and that wage setting should not be returned to the hands of social partners.
«The role of the state is crucial and must ensure that the interests of the unemployed are represented in negotiations,» the Committee members state, adding that the existence of a minimum wage is important, as it mitigates the bargaining power of employers and contributes to in the fight against poverty, but if it is set at too high a level, may increase unemployment, excluding people with low skills from the labor market.
«The unemployed are the big losers in this case, as their prospects of finding work are reduced,» notes the Commission, concluding that «the minimum wage must be set in an economically rational manner, taking into account the interests of both those in work and those who are unemployed.».
The Wise men propose that the minimum wage be decided by a Council of Experts with three-year term, so that it does not necessarily coincide with the political cycle of a government. «The government should consider the Council's proposal binding,» recommend the Wise Men of the Pissarides Commission, while retaining the option of setting the minimum wage at a different level, publishing a sufficient justification for the deviation from the Council's proposal.
What the unions say
On the other side, the Labor Institute of GSEE, who recently published his «anti-Pissaridis» report on the future of the Greek economy, emphasizes that lowest The average salary in Greece today is below the threshold of both relative and absolute poverty.
The INE/GSEE calls for redefinition of minimum wage through the National General Collective Labor Agreement and dialogue between social partners. In other words, it calls for wage negotiations to be returned to the social partners. «A decent minimum living wage could result from adjusting the minimum wage at 60% of the median salary.
The threshold of 60% of the national median income is widely used in the definition of relative poverty (at risk of poverty), while the threshold of 50% is an indication of absolute poverty. Based on these criteria, the minimum wage in Greece is below the relative and absolute poverty thresholds.
In other words, the minimum wage cannot be considered a decent living wage, i.e., it does not ensure that workers can cover their basic needs and participate in social and cultural life, which are fundamental social rights,» according to INE/GSEE.
Setting as main aimed at establishing a living wage, the minimum wage should be adapted to 60% of the median salary, so that the limit of the relevant poverty to become the minimum standard of living, concludes INE/GSEE. This could be done on the basis of a specific timetable to be agreed upon following negotiations between the social partners within the framework of the EGSSE.
It should be noted that since February 2019, the minimum wage has been set at 650 euros (the sub-minimum wage has been abolished) and the minimum daily wage at 29.04 euros.Due to the extraordinary and necessary measures taken to limit the spread of the COVID-19 coronavirus pandemic, the new schedule is as follows:
- The process begins in the last 10 days of March, when the three-member Consultation Committee (Chair of O.M.E.D., representative of the Minister of Finance and representative of the Minister of Labor) sends a written invitation to specialized scientific research and other bodies, including the Bank of Greece, the National Statistical Service, the Manpower Employment Organization (OAED), the Labor Institute of the GSEE/ADEDY (INE-GSEE), the Institute of Industrial and Economic Research (IOBE), the Institute of the Greek Tourism Confederation (INSETE), the Center for Planning and Economic Research (KEPE), the Mediation and Arbitration Organisation (OMED), the Institute of Trade and Services of the National Confederation of Greek Commerce (INE.EMY.ESEE). These research bodies must draw up a report evaluating the current statutory minimum wage and daily wage, with estimates for their adjustment to current economic conditions. In accordance with the relevant provision, the bodies must take into account the special clause provided for in the 2013 law:
“The level of the statutory minimum wage and statutory daily wage should be determined taking into account the state of the Greek economy and its prospects for growth in terms of productivity, prices, and competitiveness, employment, unemployment rate, income, and wages.”.
- By April 30, scientific bodies must submit reports on the adjustment of the minimum wage in accordance with the new timetable. The Consultation Committee compiles a file containing the reports of the specialized research bodies and the factors affecting the minimum wage and daily wage and sends it to the representatives of the social partners, GSEE, SEV, GSEVEE, ESEE, and SETE, so that they can express their opinion by submitting a memorandum and documentation on the adjustment of the current statutory minimum wage and daily wage.
- By May 15, the Consultation Committee must forward the memorandum of each member to the other representatives of the social partners, with an invitation to an oral consultation on any adjustment of the current statutory minimum wage and daily wage.
- By May 31, all memoranda and documentation from the parties involved in the consultation, as well as the report from the specialized scientific and research bodies, must be submitted to the Center for Planning and Economic Research (KEPE) for the drafting of a Consultation Conclusion Draft. The conclusion is drafted in collaboration with a committee consisting of five independent experts on economic issues, particularly labor economics, social policy, and labor relations. The Draft Consultation Report on the possibilities for adjusting the statutory minimum wage and statutory daily wage should include, in particular, a systematic record of the proposals of the social partners involved in the consultation, their points of agreement, documentation on the state of the Greek economy and labor market, and the factors influencing the determination of the proposed statutory minimum wage and daily wage. The opinion expressed in the Draft Consultation Report may differ and/or diverge from the reports submitted by other scientific bodies.
- By June 30, the Consultation Report Draft will be completed and submitted to the Minister of Finance and the Minister of Labor. It must then be published on the Ministry of Labor's website along with all reports, memoranda, and any other relevant documentation.
- Within the last fifteen days of July, the Minister of Labor will have to propose to the Council of Ministers the new minimum wage for employees and the minimum daily wage for workers, taking into account the Consultation Conclusion, as submitted and drafted.
Three-year periods
It should be noted that expected and the decision of Council of State for the fate of 3 years. With their upcoming decision, the judges will determine whether tens of thousands of employees who had established entitlement to seniority bonuses in 2012 will are still entitled to or they will lose them by recording them loss of salary of up to €195 per month. The industrialists who have appealed to the Council of State are requesting «bare» salary for everyone without three years of service, even if «frozen» since 2012, and regardless of length of service.
If the judges rule in favor of the employees, then wages should continue to be paid at current levels, i.e., at the level set in February 2019 and thereafter. Subsequently, the new minimum wage to be set by the cabinet next January should include seniority increases for those who had more than three years of service in February 2012.
However, if the court's decision is negative for employees – that is, if the appeal by industrialists is accepted – then thousands of employees they will lose their seniority bonuses, which are calculated from last February on the new minimum wage of 650 euros. Also, the new salary will be free of bonuses and uniform for everyone. Given that since 2012 there has been a cap on seniority bonuses at 30%, the maximum amount of allowances at stake is up to €195 per month.
The upcoming decision of the Council of State will determine the level of remuneration and future employees, as it is expected that seniority allowances (the so-called 3-year allowances) will be «unfrozen» when unemployment falls below 10%.
