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Labor and employment law challenges in business transformations

Greece

Workforce restructuring

The key practical issues in workforce restructuring include:

  • Legal justification
  • Works council and employee representatives’ process
  • Labor administration process
  • Costs and timing
  • Litigation risk

Applicable legislation

Collective redundancies are governed by Law 1387/1983 (as amended by Law 4472/2017 and in force). It is only applicable to companies with more than 20 employees and implemented for reasons unrelated to the employees’ performance and/or for personal reasons. It also applies when the number of employees terminated exceeds specific thresholds per calendar month set by law.

The following are the specific thresholds:

  • At least 6 employees in an undertaking or establishment with 20-150 employees
  • At least 5% of the employees and up to 30 employees in an undertaking or establishment with more than 150 employees

It is important to note that the current applicable legislation regarding collective redundancies is expected to be amended.

Required legal justification

The employer has the obligation to inform the impacted employees of the reasons for the redundancies. Law 1387/1983 is only applicable to redundancies taking place for reasons unrelated to the employees’ performance and/or for personal reasons. Thus, it applies to redundancies related to the employer and the business activity (i.e., redundancies taking place in the context of economic or technical changes).

Works council/unions or other employee consultation requirements

Consultation requirements with works council/unions

Before implementing the contemplated collective redundancy, the employer is required to enter into a consultation process with the relevant trade union(s) of the impacted employees in order to discuss the options to avoid or reduce the redundancies and its negative impacts thereof. It is common practice in Greece that the trade union(s) of the impacted employees are usually assisted either by sectoral trade unions or by representatives of the National Employees Federation.

The employer must provide employee representatives with all necessary information and notify them in writing of the following:

  • Reason(s) for the collective redundancy
  • Number and categories of the employees to be terminated
  • Number and categories of the employees employed by the employer
  • Period over which the implementation of the collective redundancy will be carried out
  • Selection criteria

The employer is required to enter into a consultation process with the employee representatives in order to discuss the options to avoid or reduce the redundancies and its negative impacts thereof. The consultation process begins upon the relevant notification by the employer to the employee representatives and must last for at least 30 days. During the consultation procedure, the employer may provide employees with a social plan, including measures aiming at mitigating the negative effects of the termination of employment.

Consultation requirements with other employee representatives

There are no specific consultation requirements with other employee representatives.

Consultation requirements with employees

No legal barrier is set by law — the employer is free to communicate with employees on the contemplated collective redundancy.

Approval/notification of the labor authorities or other government authorities

The result of the consultation is reflected in minutes signed by the parties to the consultation process and submitted by the employer to the competent Supreme Council of Employment.

In case the parties have reached an agreement, the contemplated collective redundancies may take place after 10 days following the date of submission of the minutes to the Supreme Council of Employment.

If there was no agreement between the employer and the relevant trade union(s), the Supreme Council of Employment may, within 10 days from the date of submission of the minutes of the consultation process, either decide that the consultation obligations towards the employees were met or extend the consultation process or request from the employer to provide additional information to the employees. Once the Supreme Council of Employment decides that the information obligations of the employer towards the employees were respected, the termination may take place after 20 days following the issuance of the relevant decision. In any case, the termination of employment may take place following 60 days after the submission of the initial minutes reflecting the consultation procedure to the Supreme Council of Employment.

Employee selection criteria

As per established case law, the employer is required to apply “social criteria” in selecting the employees to be terminated, so that redundancies not be deemed as violating the provisions of the Greek Civil Code (Art. 281) and thereof abusive.

In specific, the employer must take into consideration the following information about employees:

  • Years of service (seniority)
  • Family situation
  • Financial status
  • Productiveness

The information must be considered in such a way as to keep occupying, among employees with the same abilities, those more senior and/or more financially disadvantaged and/or with more family obligations (Supreme Court decision no. 653/1983). Further, the productiveness of the employee is a critical factor for the selection, as the termination of a less productive employee is not abusive.

The employer is also required to notify the employee representatives in writing with respect to the criteria applied for the selection.

The following categories of employees are afforded special protection from termination:

  • Female employees cannot be terminated during pregnancy and up to one year after giving birth; however, the termination is valid if it is due to misconduct or severe negligence or poor performance.
  • Members of the trade union and the founding members of the trade union cannot be terminated during the period of their office and one year thereafter; however, the termination is valid if it is justified by a specific reason indicated in the law and if it is approved by the Committee for the Protection of Trade Union officials.

However, in the context of collective redundancy, such protected employees could be terminated when the business/undertaking ceases operations. In all other cases, the protected status of such employees must be taken into consideration.

Actions required to limit the negative impact and social plan

Before implementing the contemplated collective redundancy, the employer is required to enter into a consultation process with the employee representatives in order to discuss the options to avoid or reduce the redundancies and the negative impacts thereof.

Internal alternative employment/redeployment

The employer is only required to enter into consultation process and to provide specific information to employee representatives as mentioned above. In practice, such options may include placement in another position within the same undertaking or within other undertaking of the same group, introduction of part-time occupation or occupation on rotation, salary freezing or cuts, postponement of redundancies, etc.

Other measures

There is no legal requirement on the employer to draft a social plan.

Estimated timeline

Preparation of any specific documentation required for the information and consultation process with the employee representatives on the contemplated collective redundancy may take about four months.

The legal time frame for the information and consultation process with employee representatives and the competent authority on the contemplated collective redundancy may take at least a month or more, calculated as follows:

The process begins with the invitation addressed by the employer to the employee representatives for the consultation process. This process must last at least 30 days.

  • If the parties reach an agreement, the employer can proceed with the implementation of the contemplated collective redundancies according to the terms of the agreement after a 10-days period.
  • If the parties fail to reach an agreement, the Supreme Council of Employment will issue a decision on contemplated collective redundancies within 10 days, either deciding that the consultation obligations towards the employees were met or extend the consultation process or request from the employer to provide additional information to the employees. Once the Supreme Council of Employment decides that the information obligations of the employer towards the employees were respected, the termination may take place after 20 days following the issuance of the relevant decision. In any case, the termination of employment may take place following 60 days after the submission of the initial minutes reflecting the consultation procedure to the Supreme Council of Employment.

Estimated costs

Mandatory costs

The key components of mandatory HR legal costs are as follows:

  • Notice or an indemnity in lieu of if the employee is released from working during the notice period (if the employer respects the notice period set by law then only half of the full severance payment is due)
  • Termination indemnity

Customary additional costs

There is no additional customary HR legal cost.

Hiring restrictions post-redundancy

No specific legal barriers are set by Greek law for hiring new employees following the implementation of collective redundancy. However, as per case law, it could be considered as an evidence of abusive terminations and thus the initial terminations may be ruled as null and void and the employer will be obligated to rehire the terminated employees.

In addition, Greek law prohibits hiring temporary workers when the employer has proceeded with termination of employees of the same specialty within the past three months or has proceeded with collective redundancies of employees of the same specialty within the past six months.

Litigation risk

Interested parties

Any collective redundancies implemented in violation of the provisions of Law 1387/1983 are invalid. As a result, once the employer serves the termination document to the impacted employees, the employees may bring lawsuits related to the redundancy process.

Impacted employees may bring claims (individually or collectively) against the employer in order for the court to rule the terminations invalid. Impacted employees can base their claims on grounds, such as violation of obligation to inform and consult with the representatives, failure to apply the social criteria, nonpayment of the severance due, abusive nature of the terminations etc. There is a three-month statute of limitation.

The collective redundancy process may stop or slow down to the extent the Prefecture and/or the Minister of Labor have the decisive power to reject or allow collective redundancies.

Based on the grounds of the claim(s), the court may rule the terminations partly or wholly invalid.

Damages and other remedies

Challenges could lead to remedies, including criminal sanctions.

Damages for unfair dismissal

Employees may claim the payment of salaries from the date of unfair dismissal. In addition, and if the employees have raised a relevant claim, the employer must also pay moral damages (the amount of damages awarded may vary depending on the employees’ claim; however, based on practice, said damages may amount up to EUR10,000 per impacted employee).

Reinstatement

Employees are entitled to reinstatement within the company when the redundancies are declared invalid. In this case, the employer shall pay salaries from the date of unfair dismissal. In addition, and if the employees have raised a relevant claim, the employer shall pay moral damages.

Criminal sanctions

The law regarding collective redundancies does not currently include criminal sanctions related to noncompliance; however, this may not exclude criminal sanctions based on other law such as violation of laws related to protection of maternity.

Country-specific issues

There are no other issues specific to Greece.

Contact

Primary Contact for Greece Labor and Employment Law

Maria Rigaki
Platis - Anastassiadis & Associates Law Partnership
+302102886528

Global Labor and Employment Law Guide
Workforce restructuring
2017-06-19
Greece
GR

Contacts