Individual contracts are an unwritten rule in Northern Greece

The financial crisis and unemployment are taking on nightmarish proportions in northern Greece. The proposals for special contracts come in tens, with wages below the national collective contract. As members of the Labor Centre in Thessaloniki charge, a clothing company has proposed a 15% income reduction while a joinery has suggested decreases of 12,5% and 2 months' unpaid leave for the 2011 agreement!

Meanwhile, the centre in Serres denounces the fact that for 6 months now in their prefecture, individual contracts are a status quo and checks by the Labor Inspectorate are nonexistent. Employees sign contracts of 450, 500 and 600 euros under the threat of redundancy.

Yesterday, the Council of Social control of the Labor Inspectorat rejected the explanatory report by NEOGAL, which  provided a deal for special business contracts with wages decreased by 9%.

The Council clearly states the following in its advisory report:

* The company’s liquidity is high as reflected by its available funds, which reach 11mil. This amount, which represents 60% of the annual turnover and is about 1,5 times higher than its obligations, makes the company very safe towards any circumstantial shrinking of its financial results.
* It has a strong capital base, as its own equities outweigh its debts by 6,35 times and its total liabilities by 2,35 times.
* Its functional margin (EBITDA) stands at 19,33%, 21,57% and 17,64% for the years 2007, 2008 and 2009 respectively. The margin of net profit after tax is 8,90%, 8,78% and 8,26% respectively.

* The interest coverage ratio rose to 11.76 (times) in 2009, which is too high and too far from the danger zone.
* It operates in an industry that is not characterized by cyclicality and therefore does not expect extreme changes in turnover, unless there are exceptional reasons. However, such a risk is independent of the phase in which a country's economy finds itself in.
“With a reservation concerning the company’s financial course in 2010, for which we have no data, we believe that it does not meet any of the factors that could make it risky for shareholders or creditors. The quantitative and qualitative data available to us does not indicate a compelling need to reduce labor costs to support the company in terms of competitiveness and productivity improvement.
 
Monk’s letter to Rehn

With a letter addressed to commissioner Olli Rehn, the president of the Confederation of European Syndicates, John Monk, intervenes and criticizes the colonial situation in the labor market in Greece and Ireland, both under supervision, by expressing the fear that this could be extended elsewhere in Europe.  

In his letter he notes that the Commission officials are unaware of the processes of social dialogue and collective bargaining. Directives are issued aiming at the deterioration of living standards. Therefore, the proposals made by the Commission in order to cut minimum wages, reduce wage “inflexibility” and cut pension rights, are making the labor market more flexible.

It’s quite obvious now that this attack is basically a case of pressure concerning the degradation of social standards in Europe and is promoted by the Commission. The proposals on economic governance are likely to generalize these pressures inside and outside the Eurozone and might not apply just to countries facing difficulties in global bond markets, says Mr. Monk.

He requested for an immediate meeting with Rehn, warning that the Confederation will not back the actions of EC in this direction.