Employment 2019 Second Edition Comparisons

Last Updated September 09, 2019

Contributed By Zepos & Yannopoulos

Law and Practice

Authors



Zepos & Yannopoulos is a leading Greek law firm renowned for its long heritage, legal acumen and integrity. It has a strong international orientation which is echoed in its structure, standards and approach, ultimately attested in the profile of its client base, rankings and network of affiliations. They take pride in their distinctive mind-set and their offerings as a full-service business law firm, marked by their responsiveness and ability to draw upon a second-to-none bench of tax and accounting specialists. The firm benefits from the multidisciplinary resources of more than 150 talented professionals.

Blue- and White-collar Workers

In principle, blue-collar workers are those persons who provide manual labour that does not require specialised knowledge or experience, while white-collar employees undertake initiatives and assume specialised responsibilities based on educational qualifications and/or prior experience. In some cases the relevant classification is made by law or by an applicable collective labour agreement on the basis of a formal criterion (eg the holding of a specific employment position or technical licence/certificate). In other cases that are not specifically regulated, the distinction is often ambiguous and the courts make the respective classification based on the facts of each case.

Overall, the two categories have largely been assimilated as regards the rights afforded by employment legislation, ie working time restrictions, annual leave etc. The main difference between them relates to termination rights. More specifically, the severance indemnity due to blue-collar workers in case of termination is significantly lower than the indemnity due to white-collar employees. In addition, the employer has the option to terminate the employment contracts of white-collar employees with prior notice (leading to the payment of half of the amount of severance indemnity due in case of termination with immediate effect), while this is not possible in case of the termination of blue-collar workers – in view of their already reduced severance indemnity.

Managerial Employees

In accordance with the jurisprudence of the Greek courts, persons employed in “managerial positions” or “positions of trust” are exempted from restrictions on working time. There is no specific salary threshold or position level that defines managerial employees. In case of dispute, the classification of an employee under this category is made by the courts based on the facts of each employee (eg salary, position, duties, supervisory role, representation powers). In general, the courts are reluctant to accept the classification of employees as managerial in order to discourage the abuse of the relevant law provisions by employers.

Domestic Employees

Due to the special conditions of their work, domestic employees – and more specifically domestic employees that receive accommodation and food at their employer’s residence – are exempted from the application of working time restrictions (eg overtime, Sunday work). They are covered, however, by the majority of other employment legislation, such as the rules on minimum salaries, annual leave and termination of employment. As regards the latter, domestic employees are entitled by law to the same severance indemnity that is due to blue-collar workers.

Pursuant to Greek law, minimum salaries are determined by the state unless a collective labour agreement covers the employment relationship. Collective labour agreements can be entered into at company, professional or sectoral level or they can cover all employees in the country (National General Collective Labour Agreement). However, the National General Collective Labour Agreement no longer stipulates the minimum salaries, as used to be the case under the previous legal framework and now only sets out non-monetary terms. The minimum monthly salary is set at EUR650 gross.

As regards their duration, there are two types of employment contracts: contracts of indefinite term (which are the standard type) and fixed-term contracts (which are the exceptional type). Each type is subject to different termination requirements (see 6.1 Grounds for Termination).

The execution of a fixed-term employment contract must be justified by the circumstances and the aim of the contract (eg to cover seasonal or temporary needs related to a specific project, replacement of an employee on maternity leave etc). In the absence of such circumstances, the employee may claim that the execution of the fixed-term contract (instead of an indefinite-term one) constituted a circumvention of the employee’s lawful rights and may, therefore, claim conversion of the contract into one of indefinite term.

This risk is higher in the case of consecutive renewals of fixed-term contracts. If the total duration of consecutive fixed-term contracts (ie with a break between the contracts of less than forty-five days) exceeds three years or the number of renewals exceeds three within a three-year period, the contract is “presumed” to be of indefinite term (which means that the burden of proof is shifted to the employer).

Regardless of the number of renewals, a fixed-term contract can be converted into an indefinite term if the fixed-term duration or the renewal of the contract is not objectively justified, as mentioned above. Furthermore, according to the law, the reason for the conclusion of a fixed-term contract (as well as any renewal) must be mentioned in the contract.

Working Schedule

Under Greek law the maximum working time for employees who work a 5-day working week is 40 hours per week and 8 hours per day. The working schedule must be included in the employer’s official personnel list, which is submitted annually to the labour authorities through the electronic platform for employer notifications called ERGANI, while any changes must also be notified to the authorities prior to their implementation.

Overwork

Under the general legal framework, which applies to the majority of employees, work above 40 hours per week and up to 45 hours constitutes overwork. Overwork must be compensated by a 20% increase in the employee’s contractual hourly wage. In addition, overwork must be notified electronically to the authorities through the ERGANI platform at the latest on the same day and in any case before the commencement of overwork.

Overtime

Work above 45 hours per week or 9 hours per day constitutes overtime and is allowed only on an exceptional and short-term basis (eg an unexpected workload) for a maximum of 2 hours per day and 120 hours per year.

Pursuant to special legislation that applies to a variety of companies (mainly of an industrial or technical nature), overtime work is allowed for up to 3 hours per day and up to maximum number of hours per semester stipulated in a Ministerial Decision issued twice every year (the currently applicable Ministerial Decision provides for a maximum of 30 hours of overtime for the second semester of 2019).

Overtime must be compensated by increasing the employee’s contractual hourly wage by a factor 40% (for up to 120 hours of overtime per year). Overtime which exceeds 120 hours per year requires the prior issuance of a special permit by the Ministry of Employment and must be compensated by  a contractual hourly wage increase of 60%.

In case of non-compliance with the above requirements, overtime worked must be compensated by a contractual hourly wage increase of 80%, and is considered an infringement of labour legislation. Furthermore, overtime must be notified to the authorities through the ERGANI platform at the latest on the date of provision of the overtime and in any case before the commencement of overtime.

Part-time Contracts

As regards working hours, employment contracts may be in the form of full-time and part-time contracts.

Part-time contracts can be concluded either at the commencement of employment or during the employment relationship and can provide for less hours and/or days of work. Greek law specifically protects part-time employees from discrimination due to the nature of their employment relationship and seeks to provide them with the same rights as full-time employees (on a prorated basis where appropriate). Furthermore, part-time contracts must be concluded in writing and a duly signed copy thereof must be submitted to the labour authorities through the ERGANI platform.

Work on Sixth Day of the Week/Sunday/Public Holidays and Night Work

Work on the sixth day of the week (usually Saturday) in the context of a five-day working week is compensated by an hourly wage increase of 30%.

The provision of work on Sundays or public holidays is in principle prohibited. The law provides for certain categories of employers/employees who are exempted from the above prohibition, either fully (eg restaurants, security guards etc) or following the issuance of permit by the authorities. Work on Sundays or public holidays (whether legitimate or not) must be compensated by an amount equal to 75% of the employee’s lawful hourly wage. In addition to such compensation, if the work provided on a Sunday exceeds five hours, the employee is entitled to a full day off in the course of the following week (or if such a day off is not granted, the payment of the corresponding daily wage). If the employee works for less than five hours on a Sunday, the employee is entitled to a corresponding number of hours off work in the course of the following week.

It should be noted that the payment of the above compensation does not release the employer from administrative and criminal sanctions provided by law with regard to work on a Sunday/public holiday.

Finally, night work (ie work between 10pm to 6am) must be compensated by increasing the employee’s hourly wage by 25%.

Flexible Arrangements

Flexible working time arrangements are made possible under the law, but only where an agreement between the employer and employees’ representatives has been negotiated (in the event that there is no union or a works council, a special committee must be set up) following a specific time-consuming process.

Moreover, there are specific time limits provided by law, according to which the employer must notify the authorities in advance about the periods of increased and decreased work.

Finally, even in the case of flexible working time arrangements, the maximum working time per day is 10 hours.

Pursuant to Greek law, minimum salaries are determined by the state unless a collective labour agreement covers the employment relationship. Collective labour agreements can be entered into at company, professional or sectoral level or they can cover all employees in the country (National General Collective Labour Agreement). However, the National General Collective Labour Agreement no longer stipulates the minimum salaries, as used to be the case under the previous legal framework and now only sets out non-monetary terms. The minimum monthly salary is set at EUR650 gross.

In addition to the usual 12 salaries paid during the year, the employer must also pay approximately an additional monthly salary as a Christmas allowance, approximately half a monthly salary as an Easter allowance and half a monthly salary as holiday allowance (totalling 14 “salaries” per year). Furthermore an employee may be entitled to special allowances such as a prior service allowance, educational allowances, IT knowledge allowances, family allowances and hazardous work allowances. Such allowances are usually stipulated in the respective professional, sectoral or company collective labour agreements. Eligibility for the above allowances depends on his or her position, professional education, family status etc. Some allowances provide a percentage of the salary while others are for fixed amounts.

In cases where the contractual salary is higher than the minimum lawful salary, the employer is entitled to set off the amount corresponding to the difference between the contractual and minimum salary against any claims of the employee for compensation relating to overwork (not overtime), night work, work on Sundays, public holidays and on the sixth week day pursuant to a written agreement with the employee.

Annual Leave

Under the current legislation, during the first two calendar years of employment, annual leave accrues pro rata based on the employee’s period of employment within the calendar year. As from the third calendar year onwards (January 1st), employees accrue their total annual leave entitlement as of 1st January.

In the case of a 5-day working week, during their first year of employment employees are entitled to a total annual leave of 20 working days, which is increased to 21 days upon completion of 12 months of employment and 22 days upon completion of 24 months of employment. Upon completion of 10 years of service with the same employer, or 12 years with any employer, the employees’ annual leave entitlement is increased to 25 days, while after the completion of 25 years of service with any employer this is increased to 26 days.

The period of taking annual leave is usually agreed by the employer and the employee. In any case, the employer is obliged to grant the annual leave to the employee within two months of the employee’s request and before the end of the calendar year. It must be stressed that the employer is obliged to grant the full annual leave entitlement to the employee by the end of the calendar year; the carry-over of leave is prohibited.

Furthermore, at least half of the employer’s personnel must be granted their annual leave during the period between 1st May and 30th September each year.

The breakdown of leave days is subject to specific legal restrictions, as follows:

  • The employer may split the leave into two parts in the event of serious or urgent needs, eg an increased workload. However, the first of the above two parts may not be less than five working days in respect of employees who work a five-day week. A record of the employer’s decision must be held for at least five years and be available for inspection by the Labour Inspectorate. 
  • The leave may be split in more than two parts at the written request of the employee. One of these parts may not be shorter than ten working days. The applications for leave filed by the employees must be retained in the employer’s records for at least five years and be available for inspection by the Labour Inspectorate. 

Sick Leave

Employees who are prevented from working due to illness are entitled to their normal remuneration during the period of absence on condition that they have been providing their services to the employer for at least ten days prior to their illness. This entitlement does not last for the entire period of the employee’s absence and is subject to the following time limits: (i) if the employee has completed one years’ service with the employer, the employee is entitled to pay for one month’s absence and (ii) if the employee has not completed one years’ service, the employee is entitled to pay for half a month’s absence. The employer has the right to deduct from the amount payable to the employee any amounts which the latter receives from the social security authorities.

Maternity Leave

The total duration of paid maternity leave is 17 weeks, of which 8 weeks must be taken before the expected delivery date and the remaining 9 weeks after delivery. If delivery takes place earlier than the expected date, the remaining leave must be granted subsequent to delivery so that a total of 17 weeks is provided. If delivery takes place after the expected date, the employee is still entitled to take 9 weeks leave following delivery. The maternity leave period is thus prolonged.

Childcare Leave

Following completion of the maternity leave, employees are entitled to reduced working hours (childcare leave) that may be used as follows:

  • (a) the employee may work for 1 hour less per day for a period of 30 months; or
  • (b) the employee may work for 2 hours less per day for a period of 12 months and 1 hour less per day for a further 6 months; or
  • (c) the employee may exercise the above right cumulatively, ie by taking additional days leave equal to the total duration of reduced working time within a period of 30 months (whether in one or more parts); or
  • (d) any combination of the above.

Options (b), (c) and (d) require the consent of the employer, which may not be unreasonably refused.

Special Leave for the Protection of Maternity

Under Greek law, female employees who are insured with EFKA (ie the main social security organisation in Greece) are entitled to Special Leave for the Protection of Maternity for a period of up to 6 months.

During the Special Leave for the Protection of Maternity, eligible employees are entitled to a special monthly allowance paid by the Unemployment Office (OAED), while they are not in receipt of salary payments from their employer.

Paternity Leave (Child-birth Leave)

Fathers are entitled to two days paid leave upon the birth of their child.

Parental Leave

Employees who have completed one year of service with the same employer are entitled to take unpaid leave of at least four months (eight months for single parents) per child (provided that one year has lapsed from the expiry of the previous parental leave taken). The above right is non-transferrable and can be exercised until the child reaches the age of six (or the age of eight, if the adoption process is not completed by the age of six). This parental leave may be taken in one or more parts.

Greek law also provides for a number of special types of leave, including wedding leave, school visit leave, voting leave, leave due to sickness of dependants, student leave etc.

Confidentiality and Non-disparagement

The relevant obligations derive from the general principle of loyalty that is owed by employees to their employer. Employees are obliged to keep confidential all information that is designated as such or has the relevant characteristics and to avoid any action that would be detrimental to the interests of their employer, including making any disparaging statements about the employer, its representatives and its products/services.

Limitation of Employees’ Liability in the Conduct of their Work

The employees’ liability for damage caused to the employer in the course of their work was recently modified with a view to limit such liability. Employee’s liability is limited to damage deliberately caused by the employee. In the case of damage caused due to employee’s negligence, the court may release the employee from any obligation arising or allocate to the employer the cost which corresponds to the business risk or which is deemed excessive for the employee. Any agreement which increases the liability of the employees is invalid.

Non-competition clauses are not specifically regulated by law. Nevertheless, the inclusion of a non-compete clause for the duration of the employment contract is possible (which is derived from the general duty of good faith towards the employer); however, with regard to the post-termination period, a non-competition obligation can only come into being with the agreement of the parties.

The assumption of a non-competition obligation by the employee may not, as such, impede the constitutionally established freedom of the employee to provide services, nor may it lead to an abuse of the employer’s rights. In accordance with the jurisprudence of the Greek courts, the validity of a non-competition obligation for the post-termination period depends mainly on the proportionality of the restrictions imposed on the employee compared to the interests of the former employer which are being protected under the clause.

The courts usually examine whether the obligations agreed with the employee are not excessive with respect to:

the duration of the non-competition obligation;

the geographical area covered by the restriction (the more restricted the area, the more enforceable the clause);

the scope of the prohibited activities (a list of existing competitors will reinforce the validity of the clause);

the manner of dissolution of the employment relationship (ie termination v resignation);

the amount of severance indemnity (ie lawful severance indemnity or a higher amount);

the payment of a non-compete fee and its amount; and

the existence of reasonable justified interests of the former employer.

As regards the non-compete fee, please note that this is not imposed by law. However, its payment would in principle strengthen the enforceability of the clause, depending also on the overall circumstances of the case.

The obligation of employees not to solicit former colleagues or customers of their previous employer primarily derives from the legislation on unfair competition and a relevant claim is usually upheld only when special circumstances exist; eg they relate to key employees of the employer who expressly wish to cause damage to his or her previous employer in order to strengthen the position of a competitor.

In practice, it is not unusual for employers to insert such clauses in employment contracts, especially for managerial employees who, due to their special characteristics, could create substantial risks for their previous employer.

The processing of employees’ personal data is governed by the General Data Protection Regulation, ie Regulation (EC) 2016/679, hereinafter referred to as the “GDPR” which entered into force as of 25 May 2018, along with the Greek data protection law that was enacted on 26 August 2019 and includes additional requirements and restrictions on the processing of employees’ personal data in the context of employment.

On a regulatory level, the Hellenic Data Protection Authority takes a rather strict approach to the processing of employees’ personal data and follows the opinions of the former WP29 and the opinions and guidelines of the European Data Protection Board.

As far as work and residence permits are concerned, a distinction must be made between EU and non-EU citizens. EU citizens are free to stay in Greece for a period of three months provided that they: (i) are employees or freelancers; (ii) have adequate financial means to support themselves; or (iii) wish to study in Greece. After three months, they are obliged to register with the competent police authorities pursuant to a rather simple procedure provided by law.

Citizens of non-EU member states are subject to restrictions and may only be lawfully employed in Greece following the completion of the process to obtain the necessary visa and/or residence permit. Access to the Greek labour market for non-EU citizens is heavily regulated and may only be granted following the satisfaction of specific criteria depending on the type of national visa and/or residence permit.

The standard process for the issuance of a residence permit to third country nationals is a burdensome and time-consuming process, ie:

  • every two years a special Ministerial Decision is issued setting out the maximum permissible number of third-country employees and the position they may hold per geographic area of Greece;
  • employers who wish to employ third-country personnel must submit an application to the authorities, in the framework of the above Ministerial Decision, requesting the employment of specific third-country national(s);
  • if the application is accepted by the authorities, the file is forwarded to the competent Greek Consulate;
  • the Greek Consulate invites the interested third-country national to appear in person at the Consulate in order to obtain the visa following an interview and the submission of the necessary documentation; and
  • upon entry into Greece, the visa holder must appear before the authorities and submit the required supporting documentation for the issuance of a residence permit, which is now issued in the form of a standalone card that includes biometric data from the permit holder.

Another less burdensome option provided by law is the issuance of special-purpose permits for foreign managerial personnel, ie for individuals that assume either corporate offices (eg a member of a board of directors) or managerial roles (eg general managers or managers) in Greek companies under an employment contract.

The validity of the initial residence permit is generally for two years and the duration of each renewal is three years.

Other types of residence permits include the “EU Blue Card” for highly qualified employees and special permits for seasonal work. The EU Blue Card framework applies to highly skilled workers who can supply evidence of higher education qualifications or evidence of at least five years of professional experience of a level comparable to higher education qualifications which is relevant in the profession or sector specified in the employment contract.

On the other hand, a special permit for seasonal work is a national visa issued for a short period, usually not exceeding 6 months, to work in specific sectors of the economy where (mainly) manual labour is required (eg fishermen or workers in the agriculture and farming sectors).

Finally, Greek law provides for a residence permit for third country nationals (and members of their families) who purchase real estate or invest in Greece under the so-called “golden visa programme”. Such a permit, however, does not provide access to the Greek labour market.

The freedom to establish unions is expressly protected by the Greek Constitution and is further regulated through special legislation. The relevant legal framework sets out the rules for the establishment and operation of unions as well as the rights afforded to unions and their elected officials (eg special protection from dismissal). The two primary rights of unions are the right to enter into collective labour agreements and the right to strike.

Unions are divided into professional unions, sectoral unions and company unions. Professional unions are those covering employees of the same profession (eg accountants); sectoral unions are the ones covering employees who work in a particular market sector (eg the pharmaceutical sector); and company unions are unions covering employees of a specific employer. Employees may become members of only one company union and only one sectoral or professional union.

Unions are further divided into first-tier unions, second-tier unions and third-tier unions. First-tier unions are base-level unions in the sense that they are formed directly by employees. The establishment of a first-tier trade union requires at least 20 employees. Second-tier unions are federations of first-tier unions, consisting of at least two such entry-level unions, whereas third-tier unions (confederations) consist of at least two second-tier unions.

All employees who have completed at least two months of employment with the same company or profession or sector (as appropriate depending on the type of union for which they seek membership) are eligible to become members of a trade union.

According to the law, the purpose of unions is to safeguard and promote the interests of employees from a labour, financial, social, insurance and union freedom perspective. First-tier unions, usually in the form of an association, undergo an official recognition and registration process (court decision, registration in special records kept by the competent district court), have to observe certain bookkeeping requirements (members’ records, general meeting minutes, board resolutions, financial books and records of assets) and are governed by a general meeting of its members (responsible, among other things, for the election of the union’s managing board).

Works councils, although not frequent in Greek practice, can be established in companies with at least 50 employees (or 20 employees if no trade union exists in the company). Under the law, works councils enjoy specific information, consultation and (limited) co-determination powers aimed at improving working conditions and protecting employee rights.

Furthermore, Greece has implemented EU legislation on the establishment of European Works Councils, whose purpose is to facilitate the exchange of information and consultation between management and employees.

According to the law, collective labour agreements are divided into the following categories:

  • National General Collective Labour Agreements (NGCLA), which set non-monetary employment terms for all employees in Greece. The said CLAs bind all employers and employees, regardless of whether they are members of their respective employer associations and employee unions. 
  • Sectoral, which applies to employees working at similar businesses. Sectoral CLAs bind employers and employees who are members of the employer associations and the employee unions that executed the CLA, unless they are declared as generally applicable by the Minister of Labour. This means that the scope of the CLA is extended by ministerial decision to cover all employers and employees in a specific sector regardless of whether they had signed the CLA or not.
  • Professional (such as a CLA for accountants, engineers etc), which applies to employees of specific professions or similar specialisations. As regards the extension of their scope by ministerial decision, the above-mentioned analysis for sectoral CLAs applies in this category as well.
  • Company CLAs, which apply to employees of a specific company or establishment, bind only that particular company and its employees, regardless of whether the employees are members of the union that negotiated with the employer and signed the CLA. 

Employment Contracts of Indefinite Term

Termination process

Under Greek law, the termination of indefinite term employment contracts requires: (i) the handing of a written termination letter to the employee; (ii) payment of the legal severance indemnity; and (iii) prior registration of the employee with the competent state social security fund.

The termination letter needs to be downloaded from a special electronic platform (ERGANI), signed and stamped by the legal representative of the employer and handed to the employee on the day of termination; the severance indemnity must be paid by bank transfer on the same day. If the employee refuses to sign the termination form, this must be served on him or her by a court bailiff. After its signature by both parties, the termination form (or the relevant court bailiff service report) must be uploaded to the ERGANI platform within four working days of the termination date.

The law does not impose the granting of prior notice. It does, however, give to the employer the option to terminate the employee with the minimum “lawful notice” and pay one-half of the legal severance indemnity that would be due in case of termination without notice (see below for details). However, this option is rarely followed in practice.

Furthermore, Greek law provides for a 12-month statutory probation period for indefinite-term employment contacts, during which termination by the employer does not require the payment of a severance indemnity or the granting of prior notice (unless otherwise agreed by the parties).

Calculation of the legal severance indemnity

The calculation of the legal severance indemnity is based on the employee’s length of service with the employer and his or her “regular emoluments” in the month prior to termination. According to the Greek courts, “regular emoluments” include the fixed salary and benefits paid regularly over an extended period of time.

The calculation formula in case of termination without prior notice is:

  • employees with 1-4 years of service are entitled to 2 months' regular emoluments;
  • employees with 4-6 years of service are entitled to 3 months' regular emoluments;
  • employees with 6-8 years of service are entitled to 4 months' regular emoluments;
  • employees with 8-10 years of service are entitled to 5 months' regular emoluments;
  • employees with 10 full years of service are entitled to 6 months' regular emoluments;
  • employees with 11 full years of service are entitled to 7 months' regular emoluments;
  • employees with 12 full years of service are entitled to 8 months' regular emoluments;
  • employees with 13 full years of service are entitled to 9 months' regular emoluments;
  • employees with 14 full years of service are entitled to 10 months' regular emoluments;
  • employees with 15 full years of service are entitled to 11 months' regular emoluments; and
  • employees with 16+ years of service are entitled to 12 months' regular emoluments.

By way of exception, employees with 17+ years of service as of 12 November 2012 are entitled to an extra month's pay (capped at EUR2,000 per month) for every additional year of service beyond 16 years completed on or before that date (up to a maximum of 12 extra months' regular emoluments). No further severance rights are accrued after 12 November 2012.

The calculation formula in case of termination with prior notice

In case of termination with lawful notice, employees are entitled to half of the legal severance indemnity mentioned above. The length of the lawful notice depends on the employee’s service with the employer, as follows:

  • 1 month for employees with 1-2 years of service;
  • 2 months for employees with 2-5 years of service;
  • 3 months for employees with 5-10 years of service; and
  • 4 months for employees with at least 10+ years of service.

On the termination date, the employer must also pay to the employee all accrued payroll amounts, ie his or her salary up to the termination date, a percentage of Christmas/Easter allowance, holiday allowance and compensation for untaken leave, as applicable.

Ultima ratio - selection criteria

In case of redundancy, the employer must also comply with certain requirements, as set out in the jurisprudence of the Greek Courts, namely the exhaustion of all alternative means (“principle of ultima ratio”) and the application of specific selection criteria.

According to the ultima ratio principle, the dismissal of an employee must constitute a means of last resort, ie before proceeding to dismissal, the employer must have exhausted all means available, such as offering another, even inferior or part-time, position to the employee (if available).

The selection criteria involves the evaluation of performance and between “equally performing” employees the application of “social criteria”, eg mainly seniority (length of service), age, family status (especially with regard to dependants) and the financial status of the employee. The correct application of the selection criteria may entail risks as it is not always clear who the “comparable” employees are, while the significance given to each criterion by the courts may not be fully predicted. The incorrect application of the selection criteria may lead to the invalidation of the dismissal and entitle the employee to back salary and reinstatement.

Collective redundancies

Under Greek law, if the number of redundancies within a calendar month exceeds 6 employees (for employers with 20 to 150 employees) or 5% of the company’s employees (up to a maximum of 30 redundancies) for employers with more than 150 employees, the employer is obliged to follow the process for collective redundancies which includes the election of employee representatives, collective consultations and the involvement of the authorities.

Employment Contracts of Fixed Term

Fixed-term contracts are subject to a totally different legal regime. Fixed-term contracts expire automatically upon their agreed expiry date without payment of a severance indemnity. However, the early termination of such contracts, ie termination before the agreed expiry date, is only possible for "serious cause". In case of termination for serious cause, no severance or other indemnity is payable to the other party. Pursuant to the jurisprudence of the Greek courts, "serious cause" constitutes "any cause which, in accordance with the principle of good faith, makes the continuance of the employment contract impossible for the parties". In general terms, the existence of a "serious cause" is very difficult to establish. If the employer terminates the contract without serious cause the employee can file a lawsuit and ask for the termination to be declared invalid by the courts. By virtue of the said lawsuit the employee may either ask for his reinstatement or for the salary due until the expiry of the contract (or a combination of the two).

As mentioned above, the granting of a prior notice of termination is optional for the employer. For more details see 6.1 Grounds for Termination.

Greek law provides that the payment of severance indemnity is obligatory in all cases of termination by the employer regardless of the reasons thereto, unless the employee is within the statutory probation period or the termination falls under one of the three cases where severance indemnity is not due by the employer, as analysed in more detail under 6.3 Dismissal for (Serious) Cause (Summary Dismissal).

As analysed in more detail in 6.1 Grounds for Termination, the termination of indefinite term contracts does not require the existence of serious cause for termination, although the employer is required to have a valid, non-abusive reason for termination. However, the law provides for three cases in which the employer is not obliged to pay severance indemnity upon termination, even after the lapse of the statutory probation period.

Termination Following the Filing of a Criminal Lawsuit

The first case is if the employer has filed a criminal lawsuit against the employee before the termination of the employment contract. If the employee is eventually discharged by the criminal court, he or she is entitled to claim the severance indemnity (which must be paid immediately or within a reasonable period as of the notification to the employer of the relevant court’s decision), otherwise the termination will be declared invalid and the employer will be liable to pay “back salaries” to the employee. It should be noted that termination following the filing of a criminal lawsuit can also be held invalid if it is proven that the employer proceeded to the termination knowing that the allegations against the employee were false. If such a claim is upheld by the courts, the employee will be reinstated and awarded “back salaries” with interest from the dismissal date until the reinstatement or until the issuance of a final court judgment, which could take a few years.

Termination Due to Force Majeure

Secondly, the employer is released from an obligation to pay severance indemnity in case of permanent closure of the company due to an event of force majeure, against which the employer was not insured (if insured two-thirds of the severance indemnity becomes due). Force majeure constitutes an unpredictable event that could not be prevented by the employer even through the exercise of due skill and care, such as the destruction of premises attributable to earthquake, fire etc.

Termination Intentionally Caused by the Employee

Finally, the employer is released from an obligation to pay severance indemnity in cases where the employee has intentionally caused his or her termination in order to receive the severance indemnity. However, this is extremely difficult to prove in practice and is therefore rare.

An alternative to the unilateral termination of employees is the execution of mutual separation agreements. From a legal perspective, this is the safest option as it protects the employer from the potential risk of invalidation of dismissal, as well as from other possible claims made by the employee to the maximum extent allowed by law. Such agreements will, in practice, involve the payment of an increased amount of severance indemnity in consideration of a waiver of the employees’ rights against the employer.

The law does not set out any specific procedure for the conclusion of such agreements and does not require the coverage of the employee’s legal costs by the employer (as is the case in other jurisdictions). In practice, the option of a separation agreement is offered by the employer prior to unilateral action and after an agreement on its terms is reached between the parties it is signed either with immediate or future effect.

Dismissals may be prohibited for certain categories of employees under certain conditions. In particular, employers may not dismiss employees during their annual leave, during pregnancy and the first 18 months after giving birth or while the employee is serving in the army.

Certain trade union members and members of works councils are also protected from dismissal for the duration of their term in office and one year thereafter. Employees who suffer from an addiction are protected from dismissal if they participate in a relevant therapeutic programme for a period of four months following the commencement of such therapy.

Under Greek law, employees have three months from their date of termination to challenge the validity of their dismissal by reason of non-compliance with any termination requirements and processes, eg an abusive reason for termination, incorrect calculation of severance indemnity, incorrect application of selection criteria etc.

If a claim for the invalidation of the dismissal is upheld, the court will order the reinstatement of the employee and the payment of back salaries with interest for the period starting from the dismissal date until reinstatement or until the issuance of a final court judgment (which could take some years).

Greek law lays down a general framework for combatting discrimination on the grounds of disability, age, religion or belief, sex, sexual orientation, family or social status, race, colour, ethnicity etc.

The relevant framework seeks to prohibit discrimination both in the initial stage of access to employment as well as during the employment relationship. The law sets out a robust protection system, which includes administrative fines in case of infringement of its provisions and provides access to independent bodies (such as the Labour Inspectorate and the Greek Ombudsman) while in the case of litigation the burden of proof is borne by the defendant employer (rather than the plaintiff employee).

Greece does not have special labour courts or tribunals. Labour disputes are subject to a special procedure under the Greek Civil Procedure Code which provides for a more flexible (as regards the admissibility of evidence) and faster (lawsuits relating to the validity of termination and overdue salaries are set for hearing within a very short period) process compared to the standard litigation procedure.

The courts that hear labour disputes are single-member courts both at first instance and upon appeal. Both parties are required to file their pleadings with the court on the date of the hearing along with all evidence and supporting material; one witness testimony before the court is allowed per party. Litigation in Greece is quite lengthy and the final resolution of cases usually takes 3-4 years or more.

A common recourse before employee litigation is the conciliation process before the Labour Inspectorate. In addition to the overall supervision of the labour market, the Labour Inspectorate may hear complaints by employees in tripartite conciliation hearings, where the employee and the employer present their views and the Labour Inspector provides some guidance with a view to resolving the matter.

In cases of maternity or gender-based equal treatment claims the Greek Ombudsman is also usually involved. 

Under Greek Civil Procedure Code, employment disputes cannot be made subject to arbitration.

Provided that the winning party had so requested in its pleadings to the court, the court may award an amount of judicial expenses to cover attorney’s fees – although in practice the amounts adjudicated are usually lower than the actual attorney’s fees incurred. The adjudication of such sums is at the discretion of the court, which may decide not to award any amount if it considers that the legal issues involved were particularly complex.

Zepos & Yannopoulos

280 Kifissias Ave.
Halandri
Athens
Athens
Greece
152 32

+30 210 696 7000

+30 210 699 4640

info@zeya.com www.zeya.com
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Law and Practice in Greece

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Zepos & Yannopoulos is a leading Greek law firm renowned for its long heritage, legal acumen and integrity. It has a strong international orientation which is echoed in its structure, standards and approach, ultimately attested in the profile of its client base, rankings and network of affiliations. They take pride in their distinctive mind-set and their offerings as a full-service business law firm, marked by their responsiveness and ability to draw upon a second-to-none bench of tax and accounting specialists. The firm benefits from the multidisciplinary resources of more than 150 talented professionals.