Mass layoff law expected to dominate talks between creditors, labor ministry

By S.Papapetros
[email protected]

A standing demand by institutional creditors, especially the IMF, to liberalize the framework in Greece to allow for mass layoffs is expected to again dominate negotiations next week between the former's representatives and the Greek labor ministry's leadership.

The leftist Greek government has been adamant in its opposition to any further revisions in the current labor law, whereas creditors want a more flexible framework in order to allow, for instance, the restructuring of troubled companies, whereby layoffs and subsequent rehirings come under different work contracts. 

At present, the relevant labor minister must sign-off on mass layoffs -- as a percentage of a company's workforce -- something considered as "political suicide" in the highly partisan Greek political landscape.

The first parameter of negotiations will reportedly deal with the current procedure and content of talks between an employer and representatives of employees ahead of possible mass layoffs. A recent decision by the European Court, in fact, emphasized that the Greek labor law governing mass layoffs is written in very general and vague terms.

The second parameter of looming negotiations will reportedly deal with the percentage or number of allowed layoffs by a domestic company or multinational active in Greece, with the Lafarge-AGET-Heraklis cement manufacturer and a European Court decision involving the latter coming to mind.

The IMF, in particular, is pressing for an increase of the current 5 percent ceiling for mass layoffs (of total workforce) to be extended to 8 or 10 percent.

According to a recent survey by "N" of European countries' relevant labor laws, countries such as Germany and Belgium allow for up to a 10-percent layoff figure at a specific time. Other countries, such as Portugal, allow for a much lower figure.