Kelemenis & Co.

 
Forums For Adjudicating Employment Disputes

Employment disputes are brought in the single-judge civil court (Employment Disputes Section). There are specific rules that apply to employment disputes which simplify the procedure before the court (e.g. shorter deadlines, the possibility of the parties to appear at the trial without a lawyer etc).


The Main Sources Of Employment Law

The main sources of employment law are the following:

  • The Greek Constitution.
  • International Treaties.
  • European Directives and Regulations.
  • The Greek Civil Code.
  • Employment legislation.
  • Collective Labor Agreements and decisions of arbitral tribunals related to such collective agreements.
  • Customary practices.
  • Case law.

National Law And Employees Working For Foreign Companies

Greek legislation applies to non-nationals working in Greece. However, the parties may choose the governing law of the employment agreement on the condition that they observe all mandatory legal rules provided in Greek law (e.g. those governing the working hours, the minimum wage, the employees’ equal treatment, the prohibition of juvenile work, the protection of maternity and pregnancy etc). Given that a great part of Greek employment legislation comprises of mandatory rules, choosing the law of another jurisdiction as the governing law of the employment contract leaves little room for variation.

It should be noted that foreign companies have the right to hire staff and employ them in Greece. On the condition that the nature of the services to be provided by the employees locally does not give rise to a permanent establishment for the said foreign company, the latter is not obligated to set up a branch or undertake any other registration in Greece. In this case, all withholding and social security obligations are registered and reported by the employees themselves on a regular basis with the Greek tax and social security authorities, as indicated by (21.2) Regulation 987/2009 (EC) and the Greek legislation about taxation (art. 59 of law 4172/2013).


National Law And Employees Of National Companies Working In Another Jurisdiction

Greek legislation applies only to employees working in the Greek territory. Greek nationals working in another jurisdiction are not subject to Greek legislation but rather to the legislation of the country in which they carry out their work. This obligation derives from art. 5 of the Brussels Convention. Exceptions, however, can be made due to a bilateral agreement between Greece and the foreign jurisdiction and by the governing law clause included in the particular employment agreement. Another exception is where a Greek employee is posted to another EU jurisdiction for a limited period of time (Directive 96/71/EC)


Data privacy

According to Greek legislation, the employees are holders of personal data rights and the employers are responsible for the management of their employees’ personal data. The employees’ personal data concerns any information related to their private life, their financial life, medical data and data related to other sensitive aspects of their personal life (e.g. nationality, religion, origin).

The basic legislative framework for data privacy in Greece is art. 9A, 19 (1) of the Constitution, art. 8 of the ECHR, art. 7 and 8 of the Charter of Fundamental Rights of the European Union, Directives 2002/58 and 2016/680, Laws 3471/2006, 3917/2011 and 4624/2019 and General Data Protection Regulation 2016/679 of the European Union. The general principle of the regulations and laws for personal data privacy is that the collection and processing of employees’ personal data shall be permitted only when this is necessary for the fulfilment of defined, explicit and legitimate purposes and only after the employees have been informed of such collection of their personal data.

Legal Requirements As To The Form Of Agreement

There is no legal obligation for the employment agreement to be made in writing, except in the case of part-time employment agreements, job-rotation employment agreements and the renewal of definite duration employment agreements. However, the employer must in any event provide the employees with the main terms of their employment in writing. The employment agreement may be concluded orally or implied by the actions of the employer and the employee. Exceptions are provided for specific employment agreements (e.g. with the Greek State) which must always be made in writing. Whether made orally or in writing, the employer must communicate in writing to the employee the key employment terms (i.e. work location, nature of tasks, duration of the contract, working hours, salary etc.).


Mandatory Requirements
  • Trial Period
  • A trial period is not mandatory but is often used in practice for the indefinite duration employment agreements. Regarding the indefinite duration employment agreements, the law provides that if an employee is dismissed within twelve (12) months of his/her hiring, he/she is not entitled to severance payment.

  • Hours Of Work
  • Pursuant to article 6 of the National General Collective Labour Agreement of 14.02.1984, as amended and in force, employees may not work more than 40 hours per week and more than eight hours daily on a five-day working week.

    • Overwork
    • Overwork, is the work that is offered in addition to the weekly hours set out in the labour contract, which currently stands at 40 hours for full time employment, up to the following maximum number of hours:

      • up to 45 hours for 5-day working weeks (i.e. 41 – 45 hours) and
      • up to 48 hours for 6-day working weeks (i.e. 41 – 48 hours).

      Overwork is determined on a weekly basis. The aforementioned applies according to the general provisions of labour law. Collective bargaining agreements may provide for different working hours.

      When employers occupy employees more than the expected weekly hours, for every hour worked over 40 hours per week and until 45, the hourly salary is paid with an increment of 20% in the case of 5-day working weeks.

    • Overtime
      • Legal and illegal overtime

        Overtime is differentiated between legal and illegal overtime. In order for overtime to be deemed legal, the following requirements must be met cumulatively:

          1. Overtime must be provided for one of the following circumstances:
              1. Urgent work necessary for preventing accidents, organizing rescue measures for addressing sudden damages to material, premises or buildings;
              2. Urgent work of a temporary nature or extraordinary urgent needs for serving the public;
              3. Extraordinary workload;
              4. Eve of holidays;
              5. Preparatory or supplementary work which, due to their nature, are performed past the statutory working hours and
              6. Making up for lost time in the event the business experiences an interruption.
          2. According to the relevant provisions, the Employer must notify the Greek Information System ERGANI in advance of the overtime. Please note the notification to the Information System ERGANI must take place no later than the same business day.
          3. Allowed limits of legal overtime vary depending on the field of employees. Daily overtime in industrial companies must not exceed 3 hours. Exceptionally and only under urgent needs of the employer, the daily overtime may exceed 3 hours for the first day, but it must not exceed 4 hours for the remaining 4 days of the week. As regards the staff in shops and the employees of banks, the overtime must not exceed 2 hours on a daily basis and 120 hours per year and lastly as regards unskilled labour, the overtime must not exceed 120 hours per year.
          4.  

          Time Limits For Overtime Work

          Overtime is work provided beyond the maximum daily statutory time limits. The maximum daily statutory time limits for 5-day working weeks are 9 hours. Overtime is any work provided above 9 hours per day. Allowed limits for legal overtime are mentioned above.

          In the event of unskilled labour, any overtime above 120 hours per year requires approval from the labour inspector.

          Increments

          Legal overtime is paid with the following increments:

          • Up to 120 hours per year, hourly salaries are paid with an increment of 40%
          • Above 120 hours per year, hourly salaries are paid with an increment of 60%

          Each hour of illegal overtime is paid with an increment of 80% from the first hour of overtime (previous rate before legislative amendment was 100%).

    • Work on Sunday
    • It should be noted from the onset that employment on Sunday is neither overwork nor overtime. If someone is to work on Sunday, this is considered an independent working day with the right of receiving the increment set out below. It is only when the employee exceeds the weekly (in the case of overwork) or daily (in the case of overtime) hourly limits that he/she is entitled to additional increments for such work.

      Employees working on Sundays are entitled to an hourly salary increased by 75% and in case the work on Sundays exceeds 5 hours, the employees are also entitled to an alternate date of rest within the following week. It should be noted that the increase of 75% is calculated on the statutory salary provided by law and not the actual salary paid to the employee. For sake of clarity, statutory salary is the minimum salary provided by law or collective bargaining agreements and not the agreed salary actually paid to the employee.

      Employers must seek permission from the labour inspector for its employees to work on Sundays for urgent work, due to the nature of the products or the season or in the event the work cannot be postponed to another day within the week.

      It should be noted that the increment of the 75% applies also to work during any other public holiday.

    • Night Work
    • Night work is work provided at night between 10:00 pm and 6:00 am the following day. Work provided at night is paid with an increment of 25%. The following categories of employees are not entitled to receive the increment of 25%:

      • employees not covered by the pay system under the Collective Labor Agreement, which sets minimum wages and wage levels, such as agricultural workers, home workers, etc.
      • employees who are paid for being on stand-by.

       

  • Special Rules For Part-time Work
  • Employees whose working hours, calculated on a daily, weekly, or monthly basis, are less than the comparable full-time employees, are considered as part-time employees. The employment agreement for part-time work must be in writing and must include the days and the hours of work in detail. Furthermore, the employment contract must be notified by any means to the Labor Inspection Office within eight (8) days. In case the employment agreement is not in writing or the agreement is not notified to the Labor Inspection Office, the work is considered as full-time.

  • Earnings
  • According to Greek laws, minimum earnings are set out as follows:

    • the minimum daily gross wage for workers is €29,04 per day and
    • the minimum monthly gross salary for employees €650,00 per month.

    Both the minimum daily gross wage for workers and the monthly gross salary for employees depend on the work experience as follows:

      EMPLOYEES
        Work experience     Minimum monthly gross salary     Increment due to work experience     Total monthly gross salary  
      0-3 years 650.00 _ 650.00
      3-6 years 650.00 65.00 715.00
      6-9 years 130.00 130.00 780.00
      More than 9 years 650.00 195.00 745.00


      WORKERS
        Work experience     Minimum daily gross wage     Increment due to work experience     Total daily gross wage  
      0-3 years 29.04 _ 29.04
      3-6 years 29.04 1.45 30.49
      6-9 years 29.04 2.90 31.94
      9-12 years 29.04 4.36 33.40
      12-15 29.04 5.81 34.85
      15-18 29.04 7.26 36.30
      More than 18 years 29.04 8.71 37.75


  • Holidays/Rest Periods
  • Employees working a five-day working week who have completed at least two months of employment with the same employer are entitled to 2 days of leave for every month of employment. This means that on completion of the 1st year of employment, an employee is entitled to 20 working days of paid annual holiday. Annual holiday leave is increased by a day for the second year of employment and another day for the third year up to a maximum of 22 working days.

    For employees working more than five days a week, the minimum annual holiday entitlement is 24 days. Annual holiday leave may reach a maximum of 26 working days.

    Employees who have completed 10 years of work at the same employer or 12 years in total at any employer are entitled to 25 days of leave if the work five days a week and 30 working days if they work 6 days a week.

    Employees who have completed 25 years of work in total at any employer are entitled one additional day of leave, i.e. 26 working days if the work five days a week and 31 working days if they work 6 days a week.

    This annual holiday entitlement cannot include paid public holidays (e.g. Christmas, the Monday after Greek Easter, Independence Day). Additional paid public holidays (up to five days per year) may be decided by the Minister of Employment.

  • Minimum/Maximum Age
  • According to article 127 of the Greek Civil Code, the minimum age for an employee is 18 years old. However, employees younger than 18 but older than 15 may work with the permission of their guardians. There is no maximum age limit set.

  • Illness/Disability
  • In case of illness or disability, an employee is entitled to time off during which he/she retains his/her right to a salary, which is met both by the employer and the social security organization, according to the provisions of the social security legislation.

    The duration of paid illness or disability leave depends on the duration of the employment relationship. In particular, the law provides for the following:

    • Employees who have worked for less than four years can take a maximum of one month off,
    • Employees who have worked for more than four years but for less than ten years can take a maximum of four months off, and
    • Employees who have worked for more than fifteen years can take a maximum of six months off.
    •  

  • Location Of Work/Mobility
  • The location of work must be stipulated in the employment contract or provided in writing by the employer. In the event of doubt, it may be agreed orally or it may be implied. It can also be agreed that the employee must provide his/her services at different places (in the same city or in different cities), in which case the company must cover the employee’s travel expenses.

  • Pension Plans
  • Greek employers do not participate in pension schemes as pensions are funded by the Greek State. However, two kinds of supplementary pensions exist in Greece which the employer may adopt.

    • subsidiary pensions, which are funded by employer contributions which are paid to the social security organization.
    • In companies occupying more than 100 employees, the employer may provide employees with access to occupational pensions (Law 3029/2002). These pensions are voluntary and result from mutual contributions made by both the employer and the employee.
    •  

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
  • According to Article 50 of Statute 4075/2012 on “Parental Leave for Upbringing”, parents, including adoptive parents, have the right to ask for and receive this leave without pay. The leave can be for up to four (4) months (given all at once or in instalments) and may be requested from the parent until the child reaches the age of six (6) years old. During the course of the employee’s leave, the employee has full insurance coverage from his/her social security under the condition that both the employer and employee contributions are paid in full during this period. The leave for school visits, which is normally paid, can be granted for a maximum of four (4) days per year to parents of children not older than sixteen (16) years old (art. 4, National General Collective Labour Agreement of 2008/2009).

    Moreover, Greek law provides for a protection scheme for pregnant women, mothers, fathers and adoptive parents. Pregnant women are entitled to a total of seventeen (17) weeks’ paid leave (art. 11, Statute 2874/2000, of which eight (8) weeks should be taken before birth and 9 weeks after birth (art. 7, National General Collective Labour Agreement of 2000/2001).

    Pursuant to article 97 (B1) of Statute 3144/2003 (art. 9, National General Collective Labour Agreement of 2004/2005), mothers are entitled to reduced working hours for a period of thirty (30) months after their maternity leave ends [i.e. one (1) hour less for thirty (30) months or two (2) hours less for twelve (12) months and one (1) hour less for six (6) months].

    In addition, according to Statute 3655/2008 (art. 142), mothers are entitled to an additional 6 months leave after the expiration of the above 17-week maternity leave which they can take either before or after exercising their right for reduced working hours for a period of thirty (30) months. Fathers are entitled to two (2) days of paid leave for the birth of each child (art. 10, National General Collective Labour Agreement of 2000/2001). They also have a right to reduced working hours where the mother does not make use of her relevant rights (art. 7 (B2), Statute 3144/2003).

  • Compulsory Terms
  • Compulsory terms of the employment agreement are:

    • the full particulars of the contracting parties;
    • the place of work and the job position;
    • the duration of the contract;
    • the annual leave entitlement;
    • severance and notice obligations;
    • basic salary;
    • bonuses and other fringe benefits;
    • the working hours; and
    • the applicable collective labour agreement.
    •  

  • Non-Compulsory Terms
  • In so far as non-compulsory terms do not contravene mandatory law provisions the parties are free to agree any terms of a non-compulsory nature (e.g. bonuses).


Types Of Agreement

The most common types of employment agreements are:

  • full-time/part-time employment agreement of an indefinite duration,
  • full-time/part-time employment agreement of a definite duration,
  • collective, as opposed to individual, employment agreements.

There are several types of collective employment agreements, i.e. the National General Collective Labour Agreements (applicable to all employees), the National Occupational Agreements (applicable to employees of the same occupation in Greece), the Regional Occupational Agreements (applicable to employees of the same occupation in a certain city or district), Branch Collective Agreements (applicable to employees of a certain occupational subsector) and Company Agreements (applicable to employees of a certain company).

In addition to the above, Greek Labour Law provides the following flexible types of employment:

  • Employer’s Suspension Right
  • The issues concerning the conditions and the procedure for placing employees under suspension have been recently enacted pursuant to labour law no. 3846/2010, Art. 4(1). Businesses and undertakings whose economic activities have been reduced may, instead of terminating employment agreements, suspend employees, by written communication, for not more than three (3) months on annual basis. Such suspension is valid only after consultation with the employees’ legal representatives, pursuant to the provisions of presidential decree no 240/2006 and the provisions of law no 1767/1988 (regarding Employee Committees). If there are no legal representatives of employees, the notification and consultation procedures take place with all employees. Notification is deemed to have been affected by virtue of a single announcement made at a visible and accessible point in the company.

    During the suspension period, the employees under suspension receive half of the average of the salary they had received the preceding two months as full-time employees. Following the period of three months, the same employee may be placed again under suspension only after he/she has been reinstated at work for a period of at least three (3) months. Suspension of employees must be notified by any means with the competent Labour Inspection Office, Social Security Institution and Labour Employment Office.

  • Job Rotation
  • According to Law 3846/2010, in the event the Employer experiences reduction in its operations, it may, instead of terminating employment contracts, impose a system of job rotation, the duration of which cannot exceed more than 9 months per calendar year.

    In order to apply the system of job rotation, the Employer must previously inform and consult with the employees’ legal representatives. According to the law, job rotation is the working schedule with fewer working days per week or fewer weeks per month or fewer months per year, or a combination thereof, but always with full working days.

    In addition, new employment agreements will have to be signed, which must include the time of employment, the allocation of work, the working periods and the method by which salaries will be calculated.

    Job rotation must be notified by any means with the Labour Inspection Office within eight (8) days.


Secrecy/Confidentiality

The employee’s obligation for secrecy and confidentiality is set out in the Greek Civil Code. Under this code an employee is under an obligation not to disclose to third parties anything concerning the employer’s business, which is or could be, considered confidential. The employment contract may set out in more detail an employee’s secrecy/confidentiality obligations by specifying its content and duration. Such clauses can extend the obligation to post termination.


Ownership of Inventions/Other Intellectual Property (IP) Rights

According to Law 1733/1987, there are three types of inventions and intellectual property rights:

Clerical invention: This invention is created in the course of the employment relationship. Therefore, it belongs entirely to the employer, unless it is profitable for the employer, in which case the employee is entitled to reasonable remuneration.

Dependent invention: This invention is created by the employee making use of the employer’s materials, means or information. Therefore, 40% belongs to the employer and 60% belongs to the employee.

Free invention: This invention is created by the employee during the course of his/her work and belongs entirely to the employee.


Pre-Employment Considerations

Greek legislation does not indicate any pre-employment consideration.


Hiring Non-Nationals

Where an employee is an EU-national, there are no any specific legal requirements, with the exception of obtaining a Greek tax number and Greek social security (unless the employee provides a certificate that he/she has social security in his/her home jurisdiction).

If the employee is a non-EU non-national, the employee must obtain the following:

    1. A Greek Tax Registration Number,
    2. Greek social security (unless an exemption is obtained pursuant to a bilateral social security agreement),
    3. A work – residence permit issued by the Ministry of the Interior or the local competent Prefecture, according to Law 4251/2014, and
    4. An entry permission (visa) issued by the Greek Embassy or the Consulate.

The cost and length of the procedure for obtaining the above permits depend on whether the employee comes to work in Greece at his/her own initiative or after an invitation of his/her own initiative or after an invitation of his/her employer, according to Law 4251/2014.


Hiring Specified Categories Of Individuals

There are certain categories of employees who enjoy greater protection by law. In particular, there are specific legal provisions which ensure the protection of parents with more than four children, employees on military service, disabled persons and victims of wars. According to Law 2643/1998, companies employing more than 50 employees must ensure that at least 8% of their workforce is made up of the above categories of employees.


Outsourcing And/Or Sub-Contracting/Temporary Agency Work

According to article 651 of the Civil Code, secondment of employees is allowed. In such cases, the consent of the employee is always required. During the secondment, the initial employer retains its contractual obligations towards the employee. In addition, the employer and the employee may agree that during the course of the employment relationship the employee shall provide his services to third parties (arts 113 et seq., Statute 4052/2012). This kind of employment is known as “temporary employment” and applies to companies operating under the form of an SA and licensed by the Minister of Commerce.

Changes To The Contract

If the employer wants to change the terms of the contract, the employee’s consent is always required. If the employer makes a unilateral change, in particular where such a change is detrimental to the employee, without requesting or obtaining the employee’s consent, the employee may treat the contract as being terminated. According to Greek case law, changes such as the transfer of the employee to another office or department or the reduction of the employee’s wages may be regarded as a unilateral prejudicial change amounting to termination of the contract.


Change In Ownership Of The Business

Where there is a change in the ownership of the business, the employee retains all of his/her previous rights with the previous employer. According to article 4 of the Presidential Decree 178/2002, where a business is transferred the employees are by default transferred to the new employer who must take all possible measures to maintain the employees’ previous employment status/benefits.

In line with EU Directive 2001/23/EC on safeguarding employees’ rights on transfers of undertakings, businesses or parts of businesses, Presidential Decree 178/2002 provides that if employees are transferred to a new entity, they are deemed to retain their period of continuous employment, as well as all rights relating to their previous employment.


Social Security Contributions

Both the employer and the employee make social security contributions. The employer must pay all social security contributions to the social security organization (IKA) within a month of making the corresponding deductions from the employee’s gross salary. An amount equivalent to 40.06% of the employee’s salary is contributed. This percentage is made up of 15.50% from the employee and 24.56% from the employer.


Accidents At Work

According to article 662 of the Greek Civil Code, the employer must take all necessary measures to protect the health and safety of employees. Law 1568/1985 provides that employers must keep the work place in good condition so as to prevent accidents.

Where an accident takes place at work, or is associated with work (e.g. commuting), and the employee cannot work for 4 days or more, the employer must pay the employee damages. The Law recognizes a strict objective liability for employers in case of an accident at work. The employee is entitled to compensation irrespective of the employers’ fault. The amount of such damages, as stipulated by Law 551/1915, depends on the gravity and the duration of the employee’s absence from work. Damages can be awarded up to a maximum of 6 years’ salary where the employee is permanently disabled as a result of the injury. The employer must notify the accident to the Police, the Labor Inspector Organization and the Social Security Organization (IKA).


Discipline And Grievance

Dismissal must used by an employer as the last resort when an employee has committed a breach of their employment contract.

According to article 1 of Legislative Decree 3789/1957, the following penalties can be applied to employees who breach the terms of their employment:

    1. A complaint can be lodged against the employee either orally or in writing,
    2. A Reprimand, which must take place always in writing,
    3. A Fine or,
    4. Suspension from work (temporary dismissal) fir up to 10 days per yeard.

Employees should be aware of the above penalties through the company’s Regulation. An employee subject to a disciplinary measure has the right to defend himself/herself before the employer. The above penalties must not be exercised capriciously by the employer, which means that the measure chosen in each case must be proportional to the breach.


Harassment/Discrimination/Equal pay

Pursuant to articles 2 and 5 of the Greek Constitution and article 57 of the Greek Civil Code, the employer must take all necessary measures to ensure that employees are not discriminated against or subjected to acts of harassment, moral or sexual (as underlined in the National General Collective Agreement of 2000/2001) and must try and ensure that employees’ dignity is maintained.

Articles 4 and 22 of the Greek Constitution provide for the principle of equal treatment of all employees, forbidding any kind of discrimination based on one’s sex, race, age, political convictions, religion, sexual orientation etc. According to this constitutional principle, all employees must have the same access to employment, the same prospects of career progress and promotion, and receive equal treatment from their employer - especially regarding remuneration and other voluntary financial benefits.

The principle of equal pay is one of the most fundamental in Labour Law. It is applied to all employees having the same qualifications and providing the same type of work under the same conditions.


Compulsory Training Obligations

Greek Labour Law does not provide for such obligations. However, training is obligatory in some companies in order to improve employees’ qualifications.


Offsetting Earnings

According to article 664 of the Greek Civil Code, the employer cannot offset earnings against the employee’s debts. The above does not apply if the employee caused a financial loss to the employer in the course of the employment agreement.


Payments For Maternity And Disability Leave

During maternity or disability leave the employee maintains his/her right to salary, which is covered by both the employer and the social security organisation.


Compulsory Insurance

Upon hiring an employee, the employer is under an obligation to insure the employee with the appropriate social security organization. If the employer does not insure the employee the employer is subject to administrative and criminal penalties. For certain occupations (e.g. in the construction sector) employers must also maintain civil liability insurance. There is no obligation to provide any form of employer, third party liability or life insurance to the employees.


Absence For Military Or Public Service Duties

Employees are entitled to leave for military or public service duties. If an employee has been employed for 6 months, he or she cannot be dismissed during the course of such leave.


Works Councils or Trade Unions

Companies that employee more than 50 employees must allow employees to form work councils, which are usually composed of 3 to 7 members. Work councils work with the employer to discuss and improve the work conditions of the employees and the development of the company. Apart from work councils, Law 1264/1982 has introduced the employee’s right to participate in trade unions. A trade union needs at least 20 members.


Employees’ Right To Strike

The right to strike is established by article 23 of the Greek Constitution.


Employees On Strike

During the course of a strike the employment relationship is suspended so the employee cannot be dismissed for participating in a strike, unless the strike is illegal.


Employers’ Responsibility For Actions Of Their Employees

Pursuant to articles 334 and 922 of the Greek Civil Code, employers are wholly responsible for the acts of their employees in the course of the employment relationship.

Procedures For Terminating the Agreement

Pursuant to Law 2112/1920, the termination of an employment agreement is possible on the condition that it is made in writing, that the employer pays severance to the employee and that it is not regarded as proportionate. If the employment contract is of indefinite duration and the employee has not completed twelve months of continuous work with the same employer, no severance is payable. Termination must be notified both to the employee and the Greek Manpower Employment Organisation within 8 days.


Instant Dismissal

An employer can instantly dismiss an employee without having to give any reason. In this situation an employer will be liable to pay the employee the statutory severance payment unless the following circumstances apply:

    1. If the employer has already started criminal proceedings against the employee because of a criminal act the employee conducted at work
    2. If there is a judicial decision against the employee for any kind of indictable offence
    3. If the termination of the employment contract is the result of the employee’s gross misconduct
    4. If the company ceases its operations because of force majeure

In the above cases the employer may terminate the employment contract without giving a notice period and without paying severance.


Employee's Resignation

According to article 4 of Law 2112/1920, the employee may terminate the employment agreement by giving a maximum of 3 months’ notice to the employer.


Termination On Notice

As mentioned above, it is not compulsory for the employer to give notice of termination. However, if a notice period is given, its duration depends on the duration of the employment. According to Law 2112/1920 and 4093/2012, the following table provides the statutory notice periods in case of termination of the employment agreement by the employer:

      Year of Service     Notice Period  
    1 year completed 1 Month
    2-4 years completed 2 Months
    5-9 years completed 3 Months
    Over 10 years completed 4 Months

The maximum notice period is 4 months for an employee with over 10 years of employment. A longer notice period may be agreed with the employer. If the employer does not observe the notice period, he is liable to pay an increased severance payment. If the employer follows the prescribed notice period, according to the Law, the severance payment will be half of the severance payment that would be due had notice not been given (see below relevant section “Severance Payments”).


Termination By Reason Of The Employee's Age

Employees entitled to their pension may terminate the employment relationship and receive severance payment (as per Law 2112/1920, reduced at 50%). The employee holds the same right even if the employer terminates the employment relationship because of the employee reaching retirement age.


Automatic Termination In Cases Of Force Majeure

The death of the employee may constitute a force majeure which automatically terminates the employment relationship. The death of the employer, however, does not automatically end the employment relationship unless the parties agreed that this would be the case.


Collective Dismissals

Collective dismissals are regulated by Law 1387/1983. Greek legislation protects employees from collective dismissals and their negative effects. The employer must consult with the employees’ representatives to examine possible ways of avoiding or minimizing dismissals and reducing the negative effects of such dismissals. In any case, the employees must be informed in writing about the adopted measure of collective dismissals and furthermore the employer must explain the reasons and the criteria of such dismissals. Pursuant to Law 1387/1983 as amended by Law 3863/2010, only companies with more than 20 employees are allowed to proceed with collective dismissals under the following restrictions:

    1. For companies employing 20 to 150 employees, Law 1387/1983 applies where at least 6 dismissals take place in one month.
    2. For companies employing more than 150 employees Law 1387/1983 applies where at least 5% of the employees or at least 30 dismissals take place in a month.

Termination By Parties’ Agreement

The parties may decide mutually to terminate the agreement at any time.


Directors Or Other Senior Officers

There are no specific terms required for the termination of the employment relationship in the case of directors or senior officers. However, the employment status of a director is different from that of ordinary employees and often falls outside the provisions of Greek Labour Law (e.g. provisions for annual leaves, working hours and the payment of overtime work).


Special Rules For Categories Of Employee

Certain categories of employees enjoy a wider protection against dismissal. Employment legislation (e.g. Laws 3514/1928, 1264/1982 ,1483/1984 and 3996/2011) provides protection to employees executing their military service, employees with disabilities, victims of wars, employees exercising their trade-union rights and pregnant women. According to law 3996/2011, pregnant women cannot be dismissed during the course of their pregnancy or within eighteen (18) months after the childbirth. Employees cannot be dismissed because of their participation in trade-union activities. Individuals with disabilities and war victims can only be dismissed because of the company’s financial difficulties, whereas employees having executed their military service may not be dismissed within a year after their discharge.


Whistleblower Laws

The termination of the employment agreement is subject to Laws 2112/1920, 3198/1955 and the Decree 16/18.7.1920.


Specific Rules For Companies in Financial Difficulties

Where a company faces financial difficulties, the employer may decide to make redundancies but only if the matter has been discussed with the employees’ representatives. The employer must enter into consultation with the employees’ representatives to examine possible ways of avoiding or minimizing dismissals and reducing the negative effects of such dismissals. Following consultation, the employer must notify the Minister of Employment or to the Prefect of the decision reached. Where the employer and employees’ representatives fail to reach an agreement, the competent administrative authority (the Minister of Employment or the Prefect) will decide on the case.

Pursuant to governing Law 1387/1983 as amended by Law 3863/2010, only companies with more than 20 employees are allowed to make redundancies subject to the following restrictions:

    1. For companies employing 20 to 150 employees, Law 1387/1983 applies where at least 6 dismissals take place in one month.
    2. For companies employing more than 150 employees Law 1387/1983 applies where at least 5% of the employees or at least 30 dismissals take place in a month.

Special Rules For Garden Leave

The principle of garden leave is not governed by Greek law; however, it can be agreed by the parties. The reason why garden leave is not specifically regulated by Greek law is because employers can terminate employment agreements any time under the condition that the statutory severance is paid. Alternatively, only 50% of the severance is payable, when statutory notice is given. In Greece, the majority of the employers do not make use of the notice period as they prefer to terminate the employment contract immediately. However, the parties can agree that during the statutory period the employee may be asked to stay at home while he/she receives his/her salary (which is the equivalent to garden leave).


Restricting Future Activities

Employees are subject to the principle of confidentiality and the prohibition of competition. This obligation can be put into the employment contract; however, such a clause must be specific to the company’s business interests and be limited in terms of time and area. If the clause is unreasonable and an abuse of the employer’s power the clause can be deemed as null and void.


Severance Payments

If the employment contract is terminated without notice, the employee is entitled to be paid the following severance:

      Year of Service      Severance   
    1 – 3 years completed 2 months
    4 – 5 years completed 3 months
    6 – 7 years completed 4 months
    8 – 9 years completed 5 months
    10 years completed 6 months
    11 years completed 7 months
    12 years completed 8 months
    13 years completed 9 months
    14 years completed 10 months
    15 years completed 11 months
    Over 16 years completed 12 months
    Additional severance payments for employees who have completed more than 17 years of work at the same employer on 12.11.2012
    17 years completed 13 months
    18 years completed 14 months
    19 years completed 15 months
    20 years completed 16 months
    21 years completed 17 months
    22 years completed 18 months
    23 years completed 19 months
    24 years completed 20 months
    25 years completed 21 months
    26 years completed 22 months
    27 years completed 23 months
    28 years completed 24 months

The statutory severance payment is calculated based on the gross regular monthly salary of the employee at the time of termination of employment and includes the salary and any other benefit provided to the employee on a fixed and permanent basis, according to his employment agreement. This includes bonuses and allowances paid to the employees on a regular basis.

Furthermore, Greek employment Law provides for certain limitations when calculating the gross regular monthly salary on the basis of which the minimum statutory severance payment is calculated (i.e. the “Minimum Statutory Base Salary”):

    1. ) The Minimum Statutory Base Salary for the first 16 years of completed service with the same employer (i.e. 12 months of severance payment) cannot be greater than 8 times the daily wage of an unskilled worker multiplied by 30, which at current applicable rates, is a monthly Minimum Statutory Base Salary of €6,283.20.
    2. ) According to a recently enacted law, for employees who have more than 16 years of service with the same employer, the calculation of years of service is calculated according to the number of years of service he/she had on 12 November 2012. This effectively means that irrespective of the number of years employees will continue to work with the same employer, he/she will be able to calculate the number of years of service according to the number of years he/she had on 12 November 2012, without taking into consideration any further years of service.
    3. ) In addition to the above, for 17 or more years of completed service with the same employer, the monthly Minimum Statutory Base Salary, according to recently enacted Greek employment legislation, cannot be greater than €2,000.
    4. ) Notwithstanding the above, it should be noted that the limitations set out in above, when calculating Minimum Statutory Base Salary do not apply in the following two cases:
      1. If the employment agreement stipulates that the employee if entitled to statutory severance payment on the basis of the actual gross salary without any limitations stipulated in Greek law; and
      2. If the Employer agrees to waive the above limitations at the time of dismissal and pay the statutory severance payment according to the employee’s actual gross regular monthly salary.

The employer does not have to pay severance to the employee in the following situations:

  • If the employer has already started criminal proceedings against the employee because of a criminal act the employee conducted at work.
  • If there is a judicial decision against the employee for any kind of an indictable offence.
  • If the termination of the employment contract is the result of the employee’s gross misconduct.
  • If the company ceases its operations because of force majeure.

In the above cases the employer may terminate the employment contract without giving notice and without paying severance.

A reduced severance payment is possible when the employment contract is terminated because of the employee’s retirement (see above).


Special Tax Provisions And Severance Payments

According to article 15 par. 3 of the Greek Income Tax Code, severance payments are subject to Greek withholding tax as follows:

  • 0% tax for severance payments up to €60,000
  • 10% tax for severance payments between €60,001 and €100,000
  • 20% tax for severance payments between €100,001 and €150,000
  • 30% tax for severance payments over €150,001.

Allowances Payable To Employees After Termination

Employers are not required to pay allowances to employees after termination.


Time Limits For Claims Following Termination

Claims relating to an unfair dismissal can be raised within a period of 3 months of the termination.

Claims relating to severances can be raised within a period of 6 months from the event.

Specific Matters Which Are Important Or Unique To This Jurisdiction

Other than what is described in the various areas covered above, there are no specific matters which are important or unique to this jurisdiction.



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Yannis Kelemenis
Kelemenis & Co.
Greece


Disclaimer:

© 2021, Kelemenis & Co. All rights reserved by Kelemenis & Co. as author and the owner of the copyright in this chapter. Kelemenis & Co. has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021