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Employment in Greece

Employment in Greece

Employment Comparative Guide: 2023
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Contributed by Politis & Partners.

1. Hiring

1.1. Contracting

Greek labor law does not introduce any specific provisions for background checks. In principle, however, the employer may collect the personal data of candidate employees only when this is substantially related to the purpose and function of the employment relationship and to the extent necessary for hiring them.

In view of the above and taking into consideration applicable privacy law, processing of prospective employees’ data for background checks are permitted only if – and to extent that – this is necessary for the purposes of entering into an employment contract.

More specifically, the collection of information concerning special data categories (sensitive data) under the EU General Data Protection Regulation (GDPR), such as health, religious and political beliefs, any criminal prosecutions or convictions, and trade union membership, is in principle prohibited. It can be allowed only on an exceptional basis, under strict conditions, and to the extent that this is objectively necessary.

On the same note, there is no obligation for a candidate employee to undergo medical examinations, unless there is a special provision imposing such an obligation, such as the provisions on the protection of minors (Article 60 of Law 3850/2010), or the exercise of professions of health interest.

Medical checks would include the collection of medical data that are considered special category data. Thus, the legal framework is strict and the candidate’s health data must be collected only if this is necessary for the recruitment procedure or the execution of the employment relationship, in accordance with the data minimization principle.

A foreign entity not having a permanent establishment in Greece may hire employees in Greece and subject them to local labor laws, in accordance with Regulation (EC) No 883/2004.

More specifically, under applicable EU law, the said employer must fulfill all the obligations laid down by the legislation applicable to his employees, notably the obligation to pay the contributions provided for by that legislation, as if they had their registered office or place of business in Greece.

There are several categories of employment contracts, such as fixed-term, part-time, temporary employment, and teleworking employment contacts. As a general rule, an employment agreement does not have to observe a specific contractual type and may even be oral. This does not apply to part-time, or temporary employment agreements, nor to the renewal of fixed-term employment agreements.

Employers are nevertheless always required to inform their employees in writing about the material terms of the contract. This requirement applies to both indefinite and fixed-term contracts, as well as working relationships of a duration exceeding one month. The information must be communicated to the employees no later than two months upon assumption of duties, whereas omission to do does not cause the employment to be void, but may leave the employer exposed to administrative penalties.

Although there is no standardized form delineating an employment contract, Presidential Decree 156/1994 requires the employer to notify the employee of the material terms and conditions of the employment in writing. The main terms that should be included therein are indicatively the full particulars of the contracting parties, the place of the work and the job position, the duration of the contract, the basic salary, severance and notice obligations, bonuses and other benefits, working hours and any applicable collective labor agreement.

The written form is required only in part-time agreements, temporary employment agreements, fixed-term employment agreements, and remote working arrangements. Moreover, the termination of fixed-term agreements is exceptionally made in writing.

Given that there are no mandatory formalities governing employment contracts, these qualify as private documents and are considered valid when they are drafted and duly countersigned by the contracting parties.

There is no specific provision for an employment contract to be drafted in Greek. However, this is a standard practice, for the employer to mitigate any legal exposures and consolidate the validity of the contractual terms. That being said, if the employee has a fluent command of a foreign language and is, therefore, able to fully understand the content of the employment contract, then this may be concluded in a foreign language.

The Greek labor law provides that in the event of an indefinite-term employment contract, the probation period may not exceed twelve months, during which time the contract may be terminated without due notice and any compensation for dismissal unless otherwise agreed between the parties.

Employees who exert a significant influence and have decision-making power may qualify as executive employees. More specifically, these employees may fall under the following categories:

A. Executives, who (a) exercise managerial rights vis-a-vis other employees of the undertaking; (b) represent and bind the undertaking towards third parties; (c) are members of the employer’s Board of Directors, or equivalent management body; or (d) shareholders or partners of the employer.

B. Executives who manage directorates, units, or other independent departments of the employer’s enterprise as structured in the latter’s organizational chart, provided that the employer’s enterprise entrusts them with the supervision of a certain part of essential operations, and remunerates them with agreed monthly salaries not less than six times higher than the respective minimum statutory salary.

C. Employers, who are remunerated with agreed monthly salaries not less than eight times higher than the respective statutory minimum salary.

There should be stressed, that regardless of the above, executive employees are in any case considered employees, i.e. they provide dependent work and therefore fall under the protective provisions of labor law. However, because of the position they hold and the nature of duties they perform in the undertaking, they are exempt from the application of certain provisions and are in some cases treated in the same way as employers.

In particular, managing employees have been found by competent courts to be exempt from the provisions on working time limits, weekly rest, compensation for overtime or work on Sundays and holidays, as well as on the granting of annual leave. Nevertheless, the rest of labor legislation, such as the provisions on the termination of an employment contract, still applies.

1.2. Employees versus independent contractors

An employee is subject to a dependent service agreement, by virtue of which the contracting parties agree in advance to the provision of services against a salary, with a strong dependence element. This dependence derives from the employer’s right to give the employee binding commands and directions regarding the manner, place, and time the services are executed, and to monitor and control the employee to ascertain whether they comply.

On the other hand, a free-lance service provider provides their services without being under anyone’s control and without being obliged to comply with any commands or directions. There is no statutory checklist to distinguish dependent work from freelance services. The characterization is made by competent courts that assess on an ad hoc basis the terms and conditions under which work is carried out, taking under consideration the type and nature of such work.

A misclassification might leave the employer exposed to considerable statutory and contractual risks, such as the imposition of administrative fines, or claims emanating from a terminated employment relationship.

1.3. Foreign employees

Under Greek law, there are different provisions applicable depending on whether a foreign national qualifies as an EU or European Economic Area (EEA) citizen or a non-EU/EEA citizen. In particular, EU and EEA citizens may freely reside and work in Greece. The only requirement for their lawful residence is the possession of a valid EU citizen passport. EU/EEA nationals, who wish to stay and work in Greece for more than three months, are provided with an EU national registration certificate, for indefinite period of time from the police department of their residence. While for an EU/EEA citizen, the prior issuance of a visa is not required to enter Greece, a non-EU/EEA citizen who wishes to work in Greece must be provided with a visa before traveling to Greece by the Greek consulate authorities of their country of residence. Given that the employment of non-EU nationals in Greece is heavily regulated, only certain types of visas and/or residence permits provide employment rights.

1.4. Home office

A teleworking arrangement may be agreed upon in writing either upon hiring or by means of an amendment to the employment contract. Exceptionally, teleworking can also be unilaterally applied, either by the employer for public health reasons, or by the employee, in case of evidenced health risk that can be otherwise prevented. Moreover, the employer covers all costs related to remote working (i.e., professional equipment, internet access, and communication costs). Within eight days following resuming of remote working, the employer shall provide the employee in writing with the terms of the employment that are different due to the nature of remote working, including the employee’s right to disconnect, an analysis of the additional costs related to remote working, how these costs are covered by the employer, any restrictions related to use of equipment or network, health and safety rules related to remote working, obligations related to confidentiality and personal data law provisions, etc. In addition, the employer is responsible for the health and safety of employees working remotely. Particular emphasis should be given to the recently introduced “right to disconnect,” which is a significant provision of Greek labor law entitling employees to completely refrain from their work duties outside working hours.

Contract Modification

An email falls under the category of an electronic document that consists of mechanical representations. Pursuant to this provision, mechanical representations are equated to and qualify as private documents. If the employee’s declaration of intent to modify the employment contract clearly derives from the e-mail, then such declaration is considered valid.

Given the above, a contract modification performed within the ambit of managerial prerogative cannot be always considered valid, unless explicitly accepted by the employee. Any modification in the employment contract that is to the detriment of the employee and has been performed without their prior consent, can be regarded as a unilateral termination of the employment contract.

In the performance of an employment contract, the employer has in principle the right to determine the type, place, time, and other conditions governing the provision of work, as well as to regulate any matter relating to the proper organization and pursuit of legitimate business objectives. Therefore, the employer is entitled to transfer employees and place them in other units of the undertaking if this is appropriate and necessary from a business perspective.

However, the above right is not unconditional but is instead confined by the terms of the individual employment contract, applicable labor laws, collective labor agreement (if any), and/or work rules policy (if any), as ruled by the competent civil courts.

In case the employees’ tasks are described in the employment contract in a broad and general way, a contract modification may not be required.

The restrictions on modifying employer policies/internal regulations are imposed by law, good faith, and the prohibition of abusive exercise of rights. In the case of a work rules policy, this is modified by means of an administrative procedure followed before the Labor Inspectorate.

2. Termination

2.1. Termination types

An employment relationship may be terminated either mutually or unilaterally. The main termination types are; (i) termination of an employment contract by the employer, (ii) resignation, and (iii) termination of the employment contract following the agreement of the parties.

Terminating an employee does not require specific reasoning but is nevertheless subject to certain statutory restrictions. In this respect, it can be challenged before competent courts as either illegal or abusive.

Article 1 of Law 2112/1920, as in force, provides that the notice period depends on the employee’s completed years of service within the enterprise. Employee termination is valid only if made in writing and upon simultaneous payment of the exact amount of the statutory severance due. There is an exception when the employee has committed a criminal offense and consequently, the employment contract can be terminated without the payment of any severance amount. The termination document should be notified electronically to the labor authorities through ERGANI (the electronic platform of the Ministry of Labor).

The termination of the contract with prior notice includes the right of the employer to discharge the employee from the obligation to work during the notice period until the effective date of termination. In that case, the employer is obliged to pay the employee all salary amounts until the effective date of termination.

A mutual termination agreement should be signed by both parties and be electronically notified within four working days to the labor authorities on the ERGANI platform.

During employment, restrictive clauses can be agreed upon in the employment contract that may include non-competition, non-solicitation as well as confidentiality obligations. In addition, there can be provisions prohibiting the worker to be employed by another employer at the same time.

Following termination, the employee has the obligation to refrain from competing practices during the employment relationship only if there is an explicit provision in the terminated employment contract. Pursuant to well-established jurisprudence, for any such provision to be deemed valid and survive the termination of the employment contract, there are specific requirements that are taken into account, such as the duration of the respective obligation, the qualifications and the previous work experience of the employee, the employee’s position within the enterprise, whether the said employee has been receiving any kind of compensation for undertaking said obligations, etc.

2.2. Collective dismissal

Collective redundancies as described in Law 1387/1983 mean dismissals made by establishments or enterprises employing more than twenty workers, for reasons that do not relate to the individual workers dismissed, and exceed in the course of each calendar month the following numerical thresholds: (i) up to six employees for establishments employing from twenty to one hundred and fifty employees, and (ii) up to 5% of staff and 30 persons for establishments for enterprises employing more than 100 employees.

Before any collective dismissal is carried out, the employer is obliged to provide information and enter into consultations with employers’ representatives, in order to explore the option of either avoiding or reducing dismissals. More specifically, the employer is required to provide in writing the reasons redundancies are in order, the number and categories of employees to be made redundant, the number of employees normally employed, the period over which the redundancies shall be effected, and the criteria proposed for the selection of the employees to be made redundant.

The above procedure is monitored by the Ministry of Labor and Social Affairs and is limited by the restrictions set by good faith.

2.3. Unlawful termination

Given that an unlawful termination is invalid and does not develop legal effect, there derives that the employment contract is not terminated but remains in force. The same goes for the rights and the obligations of the parties deriving thereunder, such as the employee’s right to salary. In this respect, in case of unlawful termination, employees have the right to be reinstated to their duties, since their employment contract continues to apply. Respectively, the employer is obliged to pay the employee the legal or agreed wage, including benefits, for the period that the employee’s services were not accepted.

The reference income for the calculation of the damages is the wage that is agreed upon in the employment contract between the parties. It does not, however, include benefits that the employer voluntarily grants, or benefits granted for the operational needs of the undertaking.

Any damages for lost income are taxed as income deriving from salaries or business activity, in accordance with applicable legislation (Court of Cassation Judgment no. 1121/1994). On the other hand, any amount awarded for non-pecuniary damages is not considered income (Independent Authority for Public Revenue, Administration of Dispute Resolution Decision no. 2971/2022).

Dismissals can be revoked in case the employee has not received notice of the termination of the employment contract yet. If the employee has been notified of the termination of the employment contract, a new employment contract is required as the previous one will have been terminated.

Employees are protected during annual holiday leave, when exercising the right to parental leave or family obligations, when exercising the right to refuse the amendment of an employment contract from full-time to part-time, and when the termination is threatened as a penalty against complaints against an omission to apply the equal treatment principle. Moreover, for the following categories of employees, the termination of an employment relationship is in principle prohibited: (a) pregnant employees, new-parent employees (for a period of 18 months as of the date of birth), (b) war veterans, and disabled employees in a mandatory employment relationship, (c) members of the board of directors of a union or works council, (d) employees on military service. The termination of the employment contract for the aforementioned categories of employees is permitted only on serious grounds.

Employers can discipline an employee with a warning and a termination for the same conduct since there is no such restriction under Greek law.

3. Wage And Hour

3.1. Wage

There is a national minimum wage in Greece, which as of today amounts to EUR 713 for employees. The minimum daily salary for unskilled workers is EUR 31.85 and their monthly wage amounts to EUR 713.

The salary must be paid in the local currency, i.e., in Euros.

The allowances cannot be included into the base monthly salary, since the salary paid (hourly wage) is used under Greek law as the basis for calculating remuneration for overtime work (Article 1 of Legislative Decree No. 435/1976, Article 1 Paragraphs 3 and 4 of Law 3385/2005).

3.2. Working time

The weekly working time is 40 hours, eight hours per day for a five-day working week, and six hours and 40 minutes per day for a six-day working week.

Employers may, at their discretion, request work over the above-mentioned working times, and employees are obliged to provide such work as follows: (a) for a five-day working week: one additional hour per day, amounting to nine hours (i.e., 41 to 45 hours per week); and (b) for a six-day working week: one hour and 20 minutes, amounting up to eight hours (i.e., 41 to 48 hours weekly).

Where the daily working time exceeds four hours, a break of not less than 15 minutes and not more than 30 minutes is in place, during which workers are entitled to leave their post. The lunch break is not within working hours and consequently, is not paid unless otherwise agreed in the employment contract.

Under Article 58 of Law 4808/2021, the maximum limit for overtime In Greece is set at 150 hours per year for all employees in Greek territory.

There are no rules on working time banking under Greek law.

For each calendar year, employees on a five-day working week are entitled to 20 to 26 working days, whereas employees on a six-day working week are entitled to 24 to 31 working days, depending on the years of service and the year of employment with the employer.

To be eligible for compensation for sick leave, an employee must be employed for at least 10 days by the employer. Employers must notify their employers about their absence due to illness by any means and verify their condition by furnishing supporting medical documentation. Employees can claim half salary in case they are employed for a period longer than 10 days and shorter than a year, and one salary in case they have been employed for over a year. If the duration of sick leave is longer than three days for the first time within a year, the employer must cover half of the daily salary for the first three days. From the fourth day of leave and up to a month, the employee receives daily compensation from the Social Security Fund. After setting-off, the amount paid to the employee by the Social Security Fund, the employer pays the rest of the amount until the covering of the actual payment of the employee.

4. Collective Labor Law

4.1. Trade unions

The establishment of a trade union in Greece entails the following steps:

(a) at least 20 employees, who are employed in the same enterprise and are considered as the founding members. The founding members of a trade union must have completed two months within the last year in the enterprise or branch. The association of at least 20 employees is made by a founding act, which contains the decision of the founding members to establish a trade union following the procedure laid down by law and to be subject to the provisions of the statutes.

(b) The founding members must then elect a five-member provisional Board of Directors by secret ballot.

(c) The provisional Board of Directors prepares a draft of the Articles of Association, which comes to the General Meeting for consultation. The Articles of Association shall contain the conditions to admit new members, the profession that the employee must perform, the enterprise, and/or the holding in which the employee must be employed, in order to be eligible as a member of the trade union.

Greek law provides for three levels of trade union organization. On the base, there are first-level trade unions, which are legally autonomous, and their activities are governed by law. Then, there are the second-level organizations, which are either sectoral or occupational federations or regional organizations, known as work centers. Lastly, the third-level structures are confederations such as the GSEE, made up of second-level organizations. The two main confederations in Greece are: (a) the GSEE (General Confederation of Greek Workers) for workers in the private sector and (b) the ADEDY (Civil Servants’ Confederation) representing only public sector employees (i.e., education, public hospitals, ministries).

The main rights of trade unions are the right to strike, the right to internal autonomy, and the right to form their will.

Collective bargaining agreements are the base of individual employment agreements since they provide a general framework of mandatory rules for the protection of employees, from which no deviation is allowed. Such mandatory rules provide for the minimum wage, working days and hours, compensation for overtime work, employee leaves, severance payments, etc.

4.2. Works councils

Works councils can be set up by the employees in companies that employ at least 50 employees, where a trade union already exists in that company, or at a company employing at least 20 employees if there is no such trade union. Works councils have three to seven members, who are elected by the employees during general assembly convocation. They have an advisory role contributing to the improvement of working conditions and the development of the enterprise.

The most prominent rights of works councils are rights relating to information, consultation, and participation in decision-making. This means that the employer should inform the works council before implementing any decisions regarding matters such as changes to the company’s legal status, the introduction of new technology, any change in the staff structure, any increase or decrease in the number of employees, the annual budget for company health and safety measures, etc.

5. Transfer Of Undertakings

In case of transfer of a business or undertaking, employees are automatically transferred to the buyer under the same terms and conditions. Such a transfer is under the scope of the European Community’s Acquired Rights Directive, as applicable.

Employers have the obligation to inform only the employees’ representatives (i.e., works councils) about the transfer and not every employee.

The legal consequences for failing to comply with the information process of the employees’ representatives provide for an administrative fine which can vary between EUR 147 to EUR 8,804 per violation.

Under the applicable labor law, the employment relationship is transferred automatically, without requiring the consent of any of the parties involved, namely old and new/successor employer and employee. In other words, the rights and obligations arising from dependent employment relationships are automatically (ipso iure) transferred to the successor employer (beneficiary), including rights related to seniority, service development, length of service, etc. Nevertheless, the transfer of business is a rather complicated legal matter that is approached on a case per case basis, in accordance with applicable EU and national labor law.

6. Labor Investigation

The most significant employment law violations are divided into four categories and refer to violations regarding (a) common labor law infringements (e.g., late or incomplete submission of forms to public authorities); (b) violations and harassment at work; (c) violations in connection with the digital card system; and (d) provable infringements of labor law regarding health and safety at work.

These violations incur administrative fines imposed by the Labor Inspectorate.

The labor authority fines may start at EUR 300 for minor infringements and can go up to EUR 8,000 in case of a serious violation. The amount of such fines is consolidated by means of a decision issued by the Minister of Labor and Social Affairs and depends on the type of violation, the number of employees, the number of persons that are affected by the infringement, and the size of the enterprise.

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Guide Contributors For Greece

Emmanouil Savoidakis,

Partner

esavoidakis@politispartners.gr

+30 210 72 97 252

 

Kassiani Skamaga,

Junior Associate

kskamaga@politispartners.gr

+30 210 72 97 252