The recent meeting of the Labour Advisory Body proved productive in clarifying several issues, moving others forward, and reaffirming disagreements among social partners.
The key outcomes from the session are: The government appears to favour a piecemeal implementation of pension reform to avoid significant delays in its execution. Discussions on the hourly yield of the minimum wage will commence immediately, though any final changes are unlikely before the next decree revision in 2028. Following explanations regarding the final minimum wage decision, unions remain committed to their request for a meeting with the President of the Republic. The employers’ side is absolutely unwilling to consent to any changes regarding the minimum wage before 2028. Discussions on the bill concerning minimum wage adequacy will continue swiftly within the relevant Committee for final submission to the Parliament.
Minimum Wage: Disagreement Persists
The update and discussion on the minimum wage were highly anticipated. Despite explanations from the Ministry of Labour on the parameters that led to the government’s final decision, fundamental disagreements between employers and unions regarding the final amount persist.
The union side believes that, based on the recommendation of the relevant Committee (which suggested a range with a ceiling of €1,115), the final amount of the minimum wage could have been higher. Consequently, the unions insist on meeting with the President and expect a response to their request within the coming week.
Employers believe the minimum wage issue is closed until 2028, despite their own disagreements with the government’s decision. They argue that the unions’ attempt to meet the President to influence a change in the governmental decree is improper. They underlined that they will in no way accept changes to the decree before the next scheduled revision in 2028.
Hourly Wage and Adequacy Discussions
Labour Minister Marinos Mousiouttas confirmed after the meeting that the discussion on the hourly yield of the minimum wage will begin immediately in 2026, as per the Council of Ministers’ decision.
He added that the Minimum Wage Readjustment Committee will remain active in 2026 to discuss topics including: defining a procedure for an impact study of the minimum wage on economic development and discussing the necessity of setting a link with hourly yield.
Regarding the bill on minimum wage adequacy, Minister Mousiouttas stated that following the latest decision by the European Court of Justice concerning a challenge by Denmark and new emerging data, the discussion will continue swiftly in the relevant Committee to finalise the bill for submission to the Parliament.
🏛️ Pension Reform: Piecemeal Approach Proposed
Pension reform was the other major topic. Information suggests that the Minister of Labour expressed the government’s intention to proceed with a phased implementation of the reform.
Instead of a single plan covering both the First Pillar (Statutory Social Insurance System/Social Insurance Fund) and the Second Pillar (Provident Funds), the government intends to implement changes to the First Pillar first, followed by the Second Pillar.
The employer side did not raise significant objections, provided the basic parameters are agreed upon, however, unions believe the reform should be unified, arguing that changes, such as those related to the well-known 12% penalty, would be easier to implement if both pillars moved forward simultaneously.
Minister Mousiouttas noted that the actuary informed the Body on the progress of the reform and that discussions will continue immediately to allow all partners to reach a common understanding. The initial plan is to complete the discussion, submission, and parliamentary approval of the new pension reform within 2026, with the ultimate goal of implementation in 2027.
Separately, the President of the Republic spoke about pension reform yesterday, stressing that the reform being planned for 2026 is a milestone for upgrading the quality of life for the elderly.
The President stated: “We are moving forward with pension reform with one and only goal: to substantially reinforce pensions, especially those of low-income pensioners, because someone cannot cope with a pension of €500 or €510.” He expressed hope that the reform could be submitted and approved before the Parliament adjourns for elections, or immediately thereafter.