Financial Participation and Corporate Restructuring - Greece

Dr Christos A. Ioannou IAFP, THE ROLE OF FINANCIAL PARTICIPATION IN CORPORATE RE-STRUCTURING Rome, 20 September 2010

Financial Participation and Corporate Restructuring - Greece Outline Adversarial management & unions relations: Neither much room for Participation, nor for Financial Participation. Behavioural and Structural limits Trends in Restructuring and Participation. What room for a new paradigm : signs of change new agenda.

Christos A. Ioannou, IAFP, September 2010

The dominant type of relationship between Management & Unions.

Current pattern of Corporate Governance in Greece (& Italy, Spain, Portugal): Civil Law system One-tier model What companies: SOEs. Private companies : Large Scale + mainly SMEs / both Family Businesses. Employee Participation very weak (to SOEs), if any. Mixture of National level Social Dialogues with Adversarial Industrial Relations at the plant level (mainly Greece).

Christos A. Ioannou, IAFP, September 2010

Corporate Governance and Adversarial Employment Relations.

National Level: Adversarial ERs till the early 1990s.

Social Dialogue practices and institutions since mid1990s till mid-2000s.

Workplace Level: Despite Social Dialogue the plant (and individual) level ERs remain mostly adversarial, with microcorporatist islands. Adversarial dynamics in workplace ERs explain or relate to the emptiness of worker participation (mainly EU-related) institutions (information, consultation, works councils).
Christos A. Ioannou, IAFP, September 2010 4

Structural Restrictions ?

Christos A. Ioannou, IAFP, September 2010

Social Dialogue and Participation under the EFM (EU-ECB-IMF) ?

No much

room for Social Dialogue in the context of the Emergency Financing Mechanism. concluded in May 2010 a collective bargaining agreement with a 3-year horizon.
Christos A. Ioannou, IAFP, September 2010 6

National level social partners

National General collective agreement, 2010 - 2012

The agreement foresees a wage freeze

for 2010 and an average annual wage increase below 1% per year over the 2010-2012 period. as from 1.7.2011 and 1.7.2012 linked to the Harmonised Index of Consumer Prices in the Euro area.
Christos A. Ioannou, IAFP, September 2010

Increases provided

Profit Sharing Agreement

Clause

in

the

2010-2012

Article 5. Facilitation of distribution of profits in the personnel of enterprises Companies of any form and type can, with their decision, distribute in each economic year part of annual net profits in their personnel. The contracting parts will seek jointly the application of suitable tax regulations, so that this participation of workers in the profits of enterprises is encouraged.

Christos A. Ioannou, IAFP, September 2010

Heavy Restructuring underway

Reduction in Employment Pay and Wage cuts and flexibility Contract Flexibility Change in Work Organisation Reduced Working Hours Relocation, Divesting, Outsourcing, M&As. All mixes of the above

Christos A. Ioannou, IAFP, September 2010 9

Restructuring and Financial Participation

Share Ownership: Future Returns-Voice ? To what extent should FP be used for pay substitution ? - in cases of pay freezes - in cases of pay cuts

Christos A. Ioannou, IAFP, September 2010

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