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  • Private Company & Limited Liability Company: Duration and prospects

    Private Company & Limited Liability Company: Duration and prospects

    The Limited Liability Company was established in the year 1955 (: Law 3190/1955). The Private Company fifty, almost, years later (: Law 4872/2012). The latter, as a newer institution, was, in fact, more modern. Nevertheless, the adaptations of the two corporate types to the needs imposed by the economic and business conditions proved to be necessary. The recent law on SAs (: law 4548/18) and the trends for modernization, innovations and improvements that accompanied it, clearly worked in the direction of introducing improvements to the specific, two, corporate types. This proved to be more feasible for the Private Company but less feasible for Limited Liability Companies: the basic “structural” malfunctions of the latter could not be removed by legislative “patches”. What is the latest effort of legislative improvements of the two institutions? Will it affect their existence and course in the future?

     

    The new regulations

    With recent legislative regulations, (: Law 4872/2021) further improvements were attempted in Limited Liability Companies and Private Companies. The aim, according to the relevant Press Release of the Ministry of Development and Investment, is the (really necessary) reduction of the administrative burdens. Specifically (: art. 50-55 Law 4872/2021): (a) the duration of both corporate forms can now be fixed or indefinite and (b) for those companies that have chosen a certain duration, the duration will be automatically converted to indefinite time, unless the partners decide to terminate them.

     

    The pre-existing regime

    The duration of the Limited Liability Company

    The minimum content of the articles of association of the limited liability company is defined in article 6 §2 of law 3190/1955. This includes its duration (f’). In the previous form of the specific provision (as replaced by art. 2 law 4541/2018) it was provided that the duration of the Limited Liability Company is of a certain time and is defined in years – that is, it could not be attributed in another way (e.g. in months). After the expiration of its planned duration, the Limited Liability Company was dissolved automatically. The dissolution would not come if the Partners’ Assembly had decided in time (before its expiration) to extend its duration.

    The transitional provision of article 12 of law 4541/2018 provided that the Limited Liability Companies, which have defined, before the entry into force of this law (ie: 31.05.2018) “… the duration of the company as indefinite, have an expiration date of 31st December 2021, unless, by amending their statutes before their expiration, another expiration date is set, in which case their expiration date will be that specified in the statute”. The wording of this transitional provision was incomplete. It determined, in particular, the fate of the Limited Liability Company only in the case of the explicit definition of its duration as indefinite. On the other hand, it was not foreseen what would happen if on the one hand no specific years of duration of the Limited Liability Company were defined and on the other hand if the statute did not explicitly state that the company is of indefinite duration.

    In addition, Law 4541/2018 did not provide for one more case: The fate of the Limited Liability Company that would be established after 01.01.2022, which did not specify a specific duration. As we will mention below, in a similar case in the law on Private Companies, the statutory twelve-year long duration was valid. Clearly, for the above Limited Liability Company no issue of invalidity would be raised, given that the restrictively mentioned cases of invalidity of art. 7 §1 case law 3190/1955 does not include the duration of the Limited Liability Company. However, there was a gap, which was filled by the new provisions mentioned above for the duration of the Limited Liability Company.

    The duration of the Private Company

    Based on the pre-existing regulations (: art. 46 Law 4072/2012), the duration of Private Companies was explicitly provided as a certain time. The duration, in fact, was (and continues to be) a mandatory content of its articles of association (: art. 50 §1 per. Of Law 4072/2012). The duration of the Private Company was usually determined in years, starting from the establishment of the company. However, the law (in contrast to the pre-existing regime for Limited Liability Companies and the current regulation for Private Companies) did not preclude the determination of the duration in a different way (eg in months or up to a specific date).

    The law also regulated the cases where the duration of Private Companies was not provided in their statute. According to the explicit relevant preexisting provision, the company lasted twelve years from its incorporation. Therefore, Private Companies of indefinite duration could not exist, in any case.

    The duration of Private Companies could, however, be extended by decision of their partners. Such a decision was taken by an increased majority of 2/3 of the total number of the company shares. This decision had to be registered in GEMI before the expiration of the term of the Private Company. Otherwise, the Private Company was automatically dissolved and any decision to extend it was not tolerated. It was argued, of course, that in the event that the extension decision had been taken before the expiry of a certain period but registered with GEMI later, a legal revival of the company could take place.

     

    The positive effects of the new regulations

    The recent legislation has had at least two positive consequences, as:

    (a) The need-obligation for the Limited Liability Companies, which were established for an indefinite period of time, to amend their articles of association until 31.12.2021 (abolition of article no. 12 of law 4541/2018 with article no. 55 of law 4872/2021) was abolished.

    (b) There is no longer (for both Limited Liability Companies and Private Companies) the obligation to amend the articles of association and extend the duration of the company each time it expires. In case the partners want the dissolution of the company, they will have to make the relevant, specific, decision.

     

    Good intentions and the (intractable) problem

    It is true that these arrangements do help to reduce bureaucracy, reduce operating costs and the administrative burden on businesses. One could easily argue, therefore, that they are based on good intentions.

    But how could such well-intentioned arrangements create serious and possibly insurmountable problems?

    It should not escape our attention that in some, specific, cases, the parties (: partners of Limited Liability Companies or Private Companies) looked forward to the dissolution of their company after a certain period of time. This legislation has a catalytic effect on their will and overturns the data under which they made their decisions and planned their business future. At the end of the contractually fixed time for the duration of the Limited Liability Company and the Private Company, their partners should seek the appropriate (statutory or by law-significantly, however, increased) majorities to achieve the desired dissolution (at least: majority of the 2/3 of the shares for Private Companies & 2/3 of the partners and shares for Limited Liability Companies). Alternatively: the assistance of some of the other, legal, conditions.

    In case the conditions of the law or the statute are not met, the partners will have to accept a (possibly undesirable and / or intolerable) coexistence …

     

    Limited Liability Company and Private Company in the past decade; their prospects

    Very soon a decade will have passed since the law gave the “green light” for the establishment of Private Companies. The market has shown great confidence in this particular type of company from the very beginning.

    Private Companies and Limited Liability Companies have been operating competitively ever since. The legislative improvements that took place over the years, tried to (also) keep the Limited Liability Company “alive” & eligible.

    In our previous article we attempted a comparative overview of Private Companies versus Limited Liability Companies. Of the advantages of one over the other. The results of the comparison has always been significantly to the detriment of Limited Liability Companies. This is despite the fact that significant improvements were attempted in the institution of Limited Liability Companies with law 4541/18 (indicatively: as regards the composition of the name, the composition, in fact without restriction, of the capital, the permissibility of contributions in kind, the possibility of drawing up the statute in the form of standardized articles of association, the acquisition of legal personality, the publicity of the information of the Limited Liability Company, the possibility of (unilateral) exit of a partner, the transfer of a corporate share due to death, the appointment and dismissal of managers, the General Assembly of the partners and so on).

    The market has chosen, over time, the establishment of Private Companies over Limited Liability Companies.

    This fact is certified, moreover, by the number of Private Companies, compared to the corresponding Limited Liability Companies, established during the last decade.

    GEMI data for the years 2012 (when the Private Company was established) until the end of 2021, confirm the trust on them of those involved. The data is overwhelmingly in favor of Private Companies. During the last seven years, few Limited Liability Companies are established (from a little over 400-the maximum / 2015 to less than 300-the minimum / 2021). On the contrary, the establishment of Private Companies is constantly increasing (from 514 in 2012 to 12,836 in 2021). The chart:

    The recent interventions for the improvement of the institution of Private Companies and Limited Liability Companies was, most likely, decided with good intentions. But it is certain that, in some cases, those very interventions will create insurmountable problems.

    On the other hand, we have to accept that the repeated “liftings” to the institution of Limited Liability Companies has never succeeded in keeping them alive; the above-mentioned data clearly prove it. It is, therefore, certain that the recent remedial interventions will not in any way contribute to the recovery of an institution that is already not relevant. The effort to keep this type of company alive will not serve the very various interests of the companies – it will possibly only benefit us, the lawyers and the notaries involved …

    It is time to accept it: the position of the Limited Liability Company in the business reality has already been taken by the Private Company.-

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (January 16th, 2022).

     

    Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

  • Equal Treatment of Employees & Prohibition of Discrimination

    Equal Treatment of Employees & Prohibition of Discrimination

    Employees usually have different qualifications. They have, also as a rule, different tasks assigned to them. Sometimes, however, their qualifications and duties coincide. In these cases, at least in theory, one of the fundamental principles of Labor Law is activated: the principle of equal treatment. Under this principle, unequal treatment of comparable employees by the employer is not allowed. It is often identified, even in legislative texts, with the principle of non-discrimination (on which our previous article).

    What is the content of the principle of equal treatment? What has that got to do with non-discrimination? And what, after all, is the (relevant) situation in our country?

     

    The content of the principle of equal treatment

    The content of the principle of equal treatment in the context of the employment contract is determined by the case law (ind.: Supreme Court 1031/2012): Based on this principle, the employer is not allowed to treat unequally employees of the same holding. As long as they have the same qualifications but also as long as they provide the same services – under the same conditions.

    A basic condition for the application of this principle of equal treatment is that the benefit provided by the employer is not required by law. That is, it must be provided voluntarily, in other words, it must be granted on the employer’s own initiative (ind.: 536/2018 Supreme Court, 673/2014 Supreme Court, 808/2012 Supreme Court).

    Based on the above principle, then, the employer should extend to all employees, who provide the same work under the same conditions and having the same qualifications, any salary benefits (eg wage development, benefits-such as extra allowances for extreme working conditions, shifts). Also, any other service benefits (eg promotions). And all this, regardless of whether it is unilateral voluntary benefits of the employer or benefits that they have contractually undertaken towards certain employees (int.: 1554/2004 Supreme Court).

    On the other hand, this principle is not violated when those who are excluded from certain benefits belong to a different category of employees and provide different work (248/2008 Supreme Court).

    Finally, it should be noted that a specific deviation from this principle is possible when it is adequately justified by a specific and serious, objective, reason (inter: 673/2014 Supreme Court, 1031/2012 Supreme Court, 1144/2012 Supreme Court).

     

    Equal treatment in practice

    It is true that there is no other Authority more competent than the Ombudsman, to express an opinion on Equal Treatment, its implementation and its violations.

    The most recent, relevant, Report is the one that refers to 2020: a year with peculiarities and difficulties – because of the pandemic and the measures that accompanied it. According to the information note of the special report on equal treatment in 2020: “As early as the beginning of 2020, the disproportionately severe consequences of the pandemic, which threaten socially vulnerable groups or groups with special characteristics, became apparent.”

    The persons for whom special planning was required by the State were (among others): “Employees belonging to vulnerable groups, employees / parents, employees with children or a spouse with a disability…”

    The findings are extremely interesting, especially in the field of work, as: “… a significant percentage of the reports received by the Ombudsman are directly related to the effects of the pandemic and the measures taken to deal with it (: special leave, special purpose leave, increase in incidents of domestic violence…). In labor disputes, the new element relates to complaints and concerns abusive dismissals or changes that have occurred in the detriment of employees who have received special leave.

    Complaints of discrimination between men and women concern: “dismissals of pregnant women or protected mothers, difficulties in professional development or in occupying or retaining positions of responsibility of working mothers or women, as well as changes to their detriment after returning from maternity leave. Also: “unfavorable treatment of mothers after returning from a special purpose leave or the abusive suspension of pregnant women”. Finally, “difficulties in obtaining maternity leave or benefits are identified, in connection with the difficulties of easy access to services during the imposition of restrictive measures”.

    Based on the data of the special report of the year 2020, it appears that, during the specific year, 951 new reports were submitted to the Ombudsman. The majority of them concern cases of discrimination based on gender (51%). 73% are directed against public bodies and services and 27%, only, against individuals. However, the reports of gender discrimination in the private sector account for an even higher proportion: 69%. In more detail:

    2021, however, contributed an extremely important event: the passing of the recent labor law (: 4808/21). The relevant legislative improvements are expected to have a positive effect, as assessed, in “mitigating and streamlining the large and often unjustified differences that exist between categories of public and private sector employees, in matters of maternity leave, upbringing or other family benefits”.

    The data for the current year are expected to prove (?) the expectations of the Ombudsman. The time is near…

     

    Legislative basis of the principle of equal treatment

    The principle of equal treatment could not have a stronger legal basis:

    According to the Treaty on the Functioning of the European Union (art. 157): ” Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied”.

    According to the Greek Constitution: “Greeks are equal before the law” (art. 4 §1 Constitution) and “All employees, regardless of gender or other differences, have the right to equal pay for work provided of equal value” (art. 22 §1 in fine Constitution).

    According to case law, the principle of equal treatment derives (also) from the provision of article 288 of the Civil Code. According to the latter, “the debtor has an obligation to fulfill the benefit as required by good faith, taking into account the commercial practices “.

     

    Equal treatment and non-discrimination: identification (?) And / or confusion (?)

    The principle of non-discrimination is only a subset of the principle of equal treatment (ECJ: C-441/14).

    The two principles are partially identical. Regarding the introduction, in particular, of restrictions on the exercise of the managerial right: the treatment of employees in a comparable position must be uniform. It is this obligation that results in the restriction of business freedom itself.

    The EU legislator seems to almost identify the same principles. Directive 2000/78 (on the scope of which we referred to in our above-mentioned article) states that (art. 2 §1): “The principle of equal treatment means the absence of direct or indirect discrimination for one of the reasons set out in 1” (ie due to religion or beliefs, special needs, age or sexual orientation).

    The affinity of these specific principles, but also, in particular, the confusion as to their identification, is exacerbated by the legislative environment itself: Laws incorporating Anti-Discrimination Directives into national law (which we also analyzed in our above article) attribute to the Ombudsman the special responsibility of combating discrimination and the application of equal treatment (: no. 14 Law 4443/2016, 25 Law 3896/2010). The competence also to issue special reports, regarding its action in both the private and public sector and the labor relations in the specific sectors (already from the year 2005-and the entry into force of law 3304/2005, as replaced by Law 4443/2016).

     

    The differences of the two principles

    It is rightly argued, in our opinion, that the two principles, although related, differ in terms of mission, operation and conditions of their application (inter: Zerdelis, Labor Law, Individual Labor Relations, 2019, p. 307).

    The basis and targeting of the two principles

    The principle of equal treatment derives, as already mentioned, from the constitutional principle of equality. It therefore aims to achieve the principle of “distributive justice” in the workplace. For this reason, moreover, it is usually applied in the field of voluntary benefits provided by the employer (446/2019 Supreme Court).

    On the contrary, the principle of non-discrimination derives, in principle, from the (also constitutionally provided) recognition of human dignity (: art. 2 §1 Constitution). It is intended, therefore, primarily to protect an employee from being treated unfairly because of a particular feature.

    The scope of the two principles

    The principle of equal treatment seems to have a limited scope. In particular, this principle can be applied only to active employment relationships. That is, it is not possible to apply it during the recruitment procedure, before it or at the time after the termination of the employment contract (inter: 853/2020 Court of Appeal of Thessaloniki, 1080/2011 Supreme Court).

    The principle of non-discrimination is characterized, on the contrary, by the time span of its application. It is applied before the conclusion of the employment contract, during its force and during its termination. The recent labor law is a tangible, relevant example (: Law 4808/2021). The prohibited grounds for termination of the employment contract include cases where the termination “… is due to discrimination for one of the reasons provided in Article 1 of Law 4443/2016… as a countermeasure to a complaint or request for legal protection, to ensure compliance with the principle of equal treatment, in accordance with article 10 of law 4443/2016”.

    The scope of the principle of non-discrimination is also found in an additional point. The principle of equal treatment presupposes benefits for some employees, from which the employer excludes unjustifiably comparable employees. On the contrary, the prohibition of discrimination concerns every individualized and individual employment relationship, without requiring a decision of the employer for collective, for example, benefit.

    The possibility of limiting the two principles

    The principle of equal treatment and that of non-discrimination also differ regarding the possibility of their restriction.

    The principle of equal treatment may be restricted by the employer themselves if there is an objective reason. In particular, the reasons which the employer may rely on to justify the difference in treatment do not constitute numerus clausus. On the contrary, the purpose of each benefit which they provide may justify any unequal treatment (eg financial benefits in order to retain certain categories of workers, who, according to the criteria of the labor market, are not easily available).

    On the contrary, exceptions to the application of the prohibition of discrimination are explicitly (and restrictively) provided by law. Such a case of non-prohibited discrimination is the different treatment on the basis of a protected criterion, which is linked to some essential and crucial professional condition [e.g. for the distribution of the role of a young man of color, of a racial origin and age in a play are, decisively, according to the above, a professional requirement (art. 4 of Directive 2000/78 and art. 4 of law 4443/2016)]

     

    The principle of equal treatment of employees is enshrined, as extremely important, by law of higher order in the hierarchy of legal norms. Its affinity with the prohibition of discrimination is clear. To such an extent, in fact, that even in important legislative texts it seems that their meanings are identical or, as the case may be, confused. There is no doubt, however, that the principle of non-discrimination is only a special manifestation of the principle of equal treatment.

    The competent Body (: Ombudsman) records, manages and groups the relevant complaints. Let us not forget, however: There cannot be 951 (only) cases of violation of the principle of equal treatment in our country – as many, that is, as are the relevant reports to the Ombudsman.

    The recent labor law has further shielded the principle of equal treatment.

    And, although the omens are not positive – at least in the short term, let us hope that the incidents of its violation (and not only the relevant complaints) continue to decrease. For the benefit not only of the employees but also, of course, of the smooth and efficient operation of the businesses.

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (January 9th, 2022).

     

    Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

  • The Individual, Ancillary Obligations of the Employees

    The Individual, Ancillary Obligations of the Employees

    We have already been concerned, in our previous article, with the concept and distinctions of the ancillary obligations of the employees. Also, with the consequences of their possible violation. But what are the individual obligations and what is their specific content?

    The theoretical analysis of the specific, extremely important, set of obligations is very limited. However, precisely because of their importance, a, albeit brief-case-by-case, approach is appropriate:

     

    Obligation of Obedience

    It is the obligation of the employee to comply with the instructions and orders of their employer. It is basically exhausted in the provision of work according to the orders of the latter. Possible non-observance of the employer’s orders will constitute non-fulfillment (or improper fulfillment) of the employee’s main obligation: to provide work. The obligation to obey, therefore, constitutes a necessary content of the employee’s very main obligation to provide work. However, it is possible, in some cases, for this ancillary obligation to (also) be met independent from the main obligation. As an obligation, for example, to comply with obligations arising from the law (int.: smoking ban).

     

    Fiduciary Obligation

    One of the most important, ancillary, obligations of the employee is the fiduciary obligation. It includes a number of ancillary obligations (the most basic of which follow), which arise from the obligation of good faith. The employee’s fiduciary obligation derives from the general obligation to show good faith (288 Civil Code: The debtor has an obligation to fulfill the benefit as required by good faith, after taking into account the commercial practices). It aims to maintain and promote mutual trust between the parties.

    The fiduciary obligation requires the employee to take into account reasonable expectations and to promote the justified and legitimate interests of their employer.

    The employment relationship is, in fact, a relationship of increased trust; However, its scope varies, depending on the type of employment relationship and the position held by the employee (eg: manager versus ordinary worker and full-time versus part-time employee).

    The employee’s fiduciary obligation cannot prevent them from exercising their legal rights.

    Important obligations arising from the fiduciary obligation are the following:

    Obligation to not Compete

    Content of the non-compete obligation is the omission of activities or acts in competition with the employer’s business. It does not matter if, in the end, the employer’s interests are harmed. As long as such a harm is possible.

    The establishment of this obligation does not require a special agreement. It stems from the bona fide behavior that the employee must display (: 288 Civil Code).

    The non-compete obligation is valid for as long as the contract of employment lasts. It can be extended after its termination, provided, however, that a special agreement is in place (: non-compete clause).

    Obligation to Abandon Parallel Employment

    By concluding a contract of employment, the employee undertakes to dedicate their labor force, for a specific time, to their employer.

    As this commitment concerns a specific time, the employee can, at other times, be free to spend the rest of their time even employed by another employer.

    This option may be limited:

    (a) When there are contrary provisions of compulsory law (when, for example, further employment takes place in excess of the maximum working hours or during the annual leave).

    (b) When employment with another employer is detrimental to the fulfillment of the employee’s obligations to the original employer. Or it constitutes (prohibited) competitive activity.

    (c) When contrary clauses-permissible by the case law- have been agreed (eg omission of employment with another employer or employment after approval of the original employer).

    Obligation of Confidentiality

    The obligation of confidentiality is extremely important. Its content is the prohibition of the employee to make use for their own (or for a third party’s) benefit or disclose to third parties business (commercial and industrial) secrets. Also, personal data that they know on the occasion of their work.

    This obligation is related, in the area of ​​business secrets, to the aforementioned obligation to omit competing transactions.

    Criminal penalties are provided for the case of unfair disclosure of commercial or industrial secrets by the employee. When, ie, the employee “… during the period of their service”, makes the aforementioned notification for the purpose of competition “… or with the intention of harming the owner of the store or the business”, is criminally prosecuted (art. 16 §1 law 146/1914). They face corresponding criminal liabilities when they make the above illegal notification after the termination of the employment relationship (art. 16 §2 law 146/1914).

    The obligation of confidentiality may be maintained, subject to conditions, even after the termination of the employment contract (: retroactive effect). That is, without there being a special, relevant, agreement between employer and employee (7440/1999 Multimember Court of First Instance of Athens).

    Information Obligation

    An additional obligation of the employee, while their employment contract lasts, is the obligation of information (or notification). This obligation is twofold.

    The first aspect of the obligation concerns the obligation of the employee to inform, in a timely manner, the employer about their personal qualities or situations. Especially when they differ from those in force at the time of the conclusion of their employment contract. This is, in particular, information that affects the fulfillment of the obligation to provide work (eg illness, removal of a diploma from an employee as a driver, etc.).

    The second concerns the obligation of the employee to inform their employer about possible damage or risk to the interests of the business (eg any damage to a machine, computer or car that was given to the employee for the performance of their duties).

    Obligation to Submit Medical Examinations

    An ancillary obligation of the employee, which arises in exceptional cases during the operation of the employment relationship, is the obligation to undergo medical examinations.

    Exceptional cases include the performance of medical examinations: (a) provided by law (eg in occupations that may affect public health), (b) in the overriding interest of the employer (eg suspected contagious disease that poses risks to health of other staff; eg Covid-19).

    In these exceptional cases, the examinations carried out must be limited to those which are strictly necessary for the attainment of their respective justifying purpose. Also: to ensure the sensitive personal data of employees.

    Restrictions on freedom of opinion

    The freedom of opinion enjoys constitutional protection. It is not, however, without limits. In the context of the employment relationship, as well, there are restrictions on the employee’s freedom of opinion.

    The fiduciary obligation is violated, inter alia, when the employee’s opinion constitutes inaccurate criticism of the business. Also, when there is defamation of its products or services or insult to the employer’s honor.

    Violation of these restrictions may even be a reason for termination of the employment contract. Whether or not the conditions of such a complaint are met, will depend on the magnitude of the employee’s infringement. In particular, the circumstances under which it took place (for example, the conditions of reprehensible statements should be taken into account: publicly or privately, on the internet and on social media, or in private with a relative, in discussion with a client of the business or a person-relative of the employee).

    In any case, the extent of the restriction of the employee’s freedom of opinion depends on the position and the duties they have undertaken.

     

    Obligation to refrain from conduct that constitutes prohibited discrimination or harassment

    An ancillary obligation of the employee is also the omission of any behavior that constitutes prohibited discrimination (eg due to gender, racial or ethnic origin, age, religious and other beliefs, disability, sexual orientation). Likewise, the omission of behaviors that constitute violence and harassment in the workplace.

    The employee should avoid such behaviors, despite the fact that they are not contractually associated with their colleagues, but only with the employer. The latter is otherwise entitled even to terminate the employment contract of the employee, who may adopt such, intolerable, behavior.

     

    Off duty & off work environment behaviour

    Work life is clearly distinguished from the employee’s private life. However, the employee’s contractual obligations may, exceptionally, extend to their off-duty behavior.

    The above obligation arises, in particular, for employees of businesses, of a special political, moral, ideological direction.

    Based on this assumption, it has been ruled that a doctor in a catholic hospital cannot legally publicly declare themselves an advocate of abortion (although these medical procedures are permitted by law, they are prohibited by catholic ethics and its ecclesiastical rules).

    The off-duty obligations of employees depend, of course, on their position and duties within the business. Other are, e.g., the obligations of the spokesperson and others of the gardener.

     

    Main obligation of the employee continues to be the provision of their work. In addition to the main obligation, however, They are also burdened with a series of other important obligations: the ancillary ones. The importance of the latter proves to be indisputable: the sanctions for the offender are also significant.

    It is the duty of the employee, however, to respectfully fulfill his / her ancillary obligations, focusing, if nothing else, on the management, in good faith, of the issues related to his / her work.

    Let us not forget: the defense of the legitimate interests of the business-employer by the employees seems, at the very least, necessary to achieve the goals and objectives of both.-

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (January 2nd, 2022).

     

    Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

  • Ancillary Obligations of Employees (in general)

    Ancillary Obligations of Employees (in general)

    The obligations of the employer and the employee, in the context of the contract of employment, are specific (but, at the same time, extensive). The most known among them are the “main” ones. The main obligation of the employee is to provide the agreed work, which they make available to the employer (648 Civil Code). The main obligation of the employer, respectively, is the payment of the agreed salary to the employee. However, as in any contractual relationship, it also happens that in an employment contract the parties are also responsible for a set of other, additional, obligations: what we call “ancillary”.

    We will be concerned here with the ancillary obligations of the employee (which we only mentioned in our previous article). In an article to follow, we will approach them on a case-by-case basis.

     

    In General

    We will also find the ancillary obligations with the term “secondary”. It would, however, be wrong to regard them as of degraded and secondary value and importance in relation to the main ones. And precisely for this reason it seems impressive that this issue has occupied only a small part of the theory (in particular: Zerdelis, Individual Labor Law, Individual Labor Relations, Sakkoulas, 2019, p. 709 ff.)

    The main difference between the ancillary and the main obligations is that (unlike the latter) ancillary obligations are not directly provided for as an “exchange” (such as, for example, the obligation to provide work for the agreed salary – and vice versa).

    It is important to note here that ancillary obligations can sometimes be extended. Their starting point may be placed in the (shorter or longer) period of negotiations for the conclusion of the individual employment contract. They occupy, uninterruptedly, the entire duration of its validity. They finally extend, in some cases, even after the termination of the employment contract.

     

    Distinctions of the Ancillary Obligations

    According to the Civil Law, the ancillary obligations are distinguished by the criterion of the function and the purpose that they serve. They are basically divided into two main categories: (a) security obligations and (b) protection obligations. In more detail:

    (a) Obligations to Secure the Main Obligation

    The purpose of this category of obligations is to ensure and facilitate the fulfillment of the main obligation. These obligations do not necessarily require special regulations (legal or contractual). They derive, in any case, from the general obligation of good faith (: 288 Civil Code).

    The bona fide behavior, therefore, that the parties must display, obliges them to act or omit any action, which would result in the abnormal (more precisely: improper) fulfillment of the main obligation. The ancillary obligations, therefore, are closely and directly linked to the main obligation and, therefore, are not independent in nature.

    These obligations are therefore intended to ensure a concrete result. Specifically, in the realization of the purpose of the contract (eg providing instructions for use when selling a machine). Any violation of them creates the possibility for the other party to refuse the main obligation.

    Under the employment contract, the category of securing obligations may include, inter alia, the obligations of:

    (i) Informing the employer of any damage, defects or malfunctions of the machinery, equipment or materials handled by the liable employee. Also, of the details and the course of execution of their work. Lastly, of personal situations (illness, etc.) that make it impossible to work.

    (ii) Compliance with any dress code. The obligation to comply with the dress code may be imposed for security reasons (eg safety clothing / footwear). It may, at other times, be established in a specific business or industry (eg dress code for supermarket employees, medical centers, business executives).

    (iii) Safeguarding the conditions for (adequate) provision of work. The employee is obliged to take care not to fall into a situation that makes it difficult or impossible for them to provide the agreed job (eg: non-use of alcohol or other substances).

    (b) Protection Obligations

    The obligations of protection generally aim at the observance of certain behavior that deterred the causing of damage to the personal property and assets of our counterparty. And even more: that aim at their protection.

    Under the employment contract, the category of specific obligations of the employees includes the obligations of action and the obligations of omission of the employee. In more detail:

    (i) Obligation to take action: These are, among other things, obligations to inform the employer of any impending damage to their personal property or assets. Of course, these also include the obligations of the employee not to damage the specific goods of their employer or to prevent impending, corresponding, losses.

    Furthermore, this category includes the obligation of the employee to provide their work beyond the agreed time limits in cases of emergency.

    Under this category is also the employee’s obligation to inform the employer of any illness. In this case, the employee’s illness may not prevent them from performing their job. It can, however, be contagious. The employee is obliged, in this case, to protect the health of their colleagues (typical case, nowadays, from the disease from covid-19).

    (ii) Obligation to omit an action: These are obligations that are even more important and arise from the obligation to take into account the interests of the other party.

    This category includes, inter alia, the obligations of omission of competition acts and breach of the obligation of confidentiality. Also, the obligations of non-destruction or damage of tools, equipment or materials provided by the employer to the obligated employee.

     

    Consequences of the breach of the ancillary obligations

    The breach of ancillary securing obligations is closely linked to the main obligation, which affects it. Any refusal of a flight attendant to comply with the dress code of the airline in which they work will not, of course, allow them to work. That is, in cases where the employee violates these specific, ancillary obligations, there is a direct effect on their obligation to provide their work (: main obligation). There is, then, the issue of inability to fulfill (or issue of defective fulfillment) of the main obligation. The corresponding legal consequences therefore occur. In the example of the flight attendant, they will not be allowed to work and, of course, they will not receive the corresponding salary. In case of persistence in their refusal, their dismissal will be justified (when there are no more lenient, eg disciplinary, sanctions).

    Breach of ancillary protection obligations (mainly: of the obligations to omit) is also not without consequences. It is possible that the conditions are created for an action (omission and / or compensation) against the offender. Also, in some cases of breach of protection obligations (eg breach of confidentiality or competing activities) it is possible that the conditions for criminal prosecution against the offender are met.

    Finally, the breach of ancillary obligations of the employee, regardless of their type, may create the grounds for initiating disciplinary proceedings against them; even create the grounds for dismissal. This will happen when the Labor Regulations provide for corresponding disciplinary measures and penalties.

    Also, in the event of damage to the employer caused by any breach of ancillary obligations, the employee may have to remedy it. Clearly, in proportion to the degree of fault of the latter.

     

    It is clear from the above that the employee has multiple obligations. Except for the main (: job supply), they also have several (: innumerable) ancillary ones – regardless whether there is a specific reference within the employment contract or not. The ancillary obligations are not, in any case, of minor importance.

    Any violation of them has significant consequences and, at the same time, constitutes ground for sanctions against the offender.

    The question arises, of course: Should we start studying them up?

    Of course not!

    As long as we do our job in good faith – with the intention of defending (and not harming) the interests of our business-employer.

    For a better understanding, however, of these complex issues, an article of ours, a more specific one, is to follow – with an analysis of the individual-ancillary obligations.

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (December 26th, 2021).

     

    Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

  • Executives: A Ministerial Order full of problems

    Executives: A Ministerial Order full of problems

    Executives are particularly important category of employees for businesses (on many levels). These are the employees who are assigned responsibilities that are specific to the powers of the business. They are the ones who hold “…the position of supervision or management, or the position of trust” (: Article 2 a’ of the International Convention of the Washington International Conference, ratified by Article 1 of Law 2269/1920).

    We have already approached, in our previous article, the criteria for identifying an employee as an executive. Also, the legal consequences that this determination brings to the employment relationship. Finally, we referred to the formulation by case law of the specific criteria as a relevant legislative regulation was missing at that time.

     

    Executive Officer: the criteria for court decisions

    The position of the case law as to the criteria for the designating an employee as an executive is firm. The executive is the one who, “… as a result of their exceptional qualifications (specialization, technical or commercial, education and extensive experience) or the special trust in them by the employer – the owner of the business, is assigned the duties of general executive of the whole business or of an important sector of the business and they not only decisively influence the direction and development of the business, but also are obviously distinguished from other employees by exercising the rights and powers of the employer, such as recruitment and dismissals of staff, they have a high degree of initiative and independence, even if they are obliged to comply with the provisions of laws, plans and general guidelines of the employer, sometimes bears criminal responsibilities for compliance with the provisions, which have been established in the interest of employees and is usually paid a salary much higher than the law minimum limits and the salary paid to other employees”(ind .: 1065/2020 Supreme Court, Supreme Court 249/2019, Supreme Court 1467/2012, Supreme Court 74/2011, Court of Appeal of Piraeus 480/2015).

    The specific criteria are already differentiated. At least some of them.

     

    The Ministerial Order for the Designation of the Executive

    The relevant Order No. 90972 / 19.11.2021 of the Minister of Labor and Social Affairs was finally published (: Government Gazette B ‘5393 / 19.11.21). The latter attempts (: Part B’) to list the criteria on the basis of which it is ascertained whether the employee has one of the qualities mentioned in Article 2 of the International Convention of the Washington International Conference.

    According to this MO:

    “Employees who hold a position of supervision or management or of a confidential nature, are presumed to be the employees who, according to an explicit term or terms that are reflected in their individual employment contract and are declared to the ERGANI information system:

    Α. a. Exercise management rights over other employees of the business or

    1. represent and bind the business to third parties, or
    2. are members of the board of directors or corresponding governing body of the employer or
    3. are shareholders or partners holding more than 0.5% of the employer’s voting rights; or
    4. are in charge of Directorates, Units or Departments or of other independent staff of the employer enterprise which are specified in its organization chart, provided that the employer entrusts them with the supervision of part of its continuous, intermittent or extraordinary operation, but in any case, these employees are remunerated in accordance with earnings not less than six times the statutory minimum wage, or
    5. are paid with agreed monthly salaries that are not less than eight times the minimum statutory salary “.

    It is true that these provisions create multiple issues and raise serious concerns.

     

    The Failures of the Ministerial Order

    As to the (necessary?) Content of the employment contract

    As explicitly stated in the specific MO, the conditions which must be met for the designation of an employee as an executive should be reflected in an explicit term of the relevant employment contract.

    These cases include employees who represent and bind the business. Also, those who have the status of a member of the Board or of another administrative body. Or those who have a shareholding or partnership in the employer.

    However, these cases – if true – are not reasonably expected, nor is it probable, to be recorded in individual employment contracts that are often for an indefinite period. It is known that the powers of representation and commitment of the business to third parties are provided by the respective Board of Directors (or any corresponding body), with a relevant decision, which is recorded in the minutes for a limited time. In any case, the maximum duration of the commitment powers and representation provided to the current executive extends, at the latest, to the end of the term of office of the administrative body that assigns them.

    Therefore, a condition in the individual employment contract regarding the way the business is bound and represented to third parties is not legally correct (and not even tolerable). And, much more, such a term (even as an assumption) cannot bind each subsequent governing body, which is entitled and must decide, again, on the delegation of the relevant powers.

    Accordingly, it is not reasonable for the employment contract to contain as a condition the employee’s status as a member of the Board of Directors or another management body, as well as their shareholder or partnership status. These are, after all, traits that may be differentiated-even lost in a short period of time.

    In any case, the specific powers derive and are evidenced by documents provided by business law (eg minutes of formation of the Board of Directors in a body, shareholders’ book, etc.).

    Based on the above data, it is necessary for the presumption for the above-mentioned conditions (incl. Right of representation, board member, shareholder) to derive not only from the terms of the individual employment contract but also from any other document, as provided by the provisions of business law.

     

    Regarding the exercise of the executive right

    The employees who ” … exercise the managerial right over the other employees of the business.” are presumed to be executives”, according to the above-mentioned MO.

    However, this wording raises (legal, among others) concerns. An executive does not exercise the managerial right – that is, all the powers deriving from it. If this were to happen, it would be a substitute for the employer as a whole. The executive, on the other hand, exercises duties and powers that are specific to the business entity either as the latter or (more importantly in this case) as the employer.

    Therefore, it is deemed necessary for this presumption to (also) be related to the employees who exercise part (and whole) of the managerial right.

     

    Regarding the wage conditions

    Approaching the concept of executives in the context of the above article, we mentioned that, clearly, the salary of the executive must be very high. We stressed, however, that “there are no (and could not be – of course) absolute approaches. At the same time, we noted that “Particularly high salaries do not always lead, in an inevitable consequence, to an employee being classified as an executive. Especially when those high salaries are associated with the employee’s long experience and several years of prior professional experience (Supreme Court 1148/2017, Supreme Court 747/2007) “.

    The new MO came to change, in a problematic way, the above assumptions. The salary criteria that it introduces, raise significant concerns. This is for two reasons:

    (a) An executive is considered, according to the above MO, a senior employee if paid “with agreed monthly salaries that are not less than six times the minimum statutory salary”. What if they are paid 5.9 times (only) more than the minimum wage? What if, further, an executive is paid 7.9 times (only) more than the minimum wage? Should they not / can they not be considered executives? The lack of logic is obvious in case we give a negative answer to these questions.

    (b) And further: one reasonably wonders whether, after the ten-year financial crisis and the current health crisis, it is theoretically possible – for the vast majority of businesses, to provide levels of remuneration of executives such as those mentioned in this MO.

    In the context of the above data, this definition already poses a serious problem to the majority of businesses. This is because absolutely few, in number, employees exceed the limits set by the MO- even though they would be accepted as Executives according to the case law to date.

    Therefore, it is considered necessary for the employers to be able to (counter) prove that -especially- the persons of case B ‘(: heads of Directorates, Units or Departments, etc.) who are not paid with six times the minimum wage, are executives in the business, if they receive remuneration significantly higher than the average remuneration received by the other employees in the specific employer. And also, in the case that they have been assigned the responsibility of key sectors for the operation of the business (even when the sector in question, despite its importance, only has one employee).

    In addition, in any case, it must be accepted that to the minimum, according to the specific MO, monthly salaries are added and distributed – as moreover the relevant case law always accepts (inter: 1724/2008 Supreme Court, 1030/2005) the benefits in kind to the executives (inter: car, travel and maintenance expenses, residence, mobile phone, etc.).

     

    The Introduction of Presumptions

    As we have already pointed out, the MO introduces a series of presumptions. If one of the listed cases occurs, it is presumed that the employee is an executive.

    However, the MO does not clearly state whether this is a rebuttable or not presumption. When the law does not discriminate, it is concluded that this is a rebuttable presumption. This means that although one of the divisively reported cases may occur, this presumption is not irrebuttable. It is possible, in this case, to counterprove that the employee does not fall into the category of employees holding a supervisory or managerial or confidential position.

    At the same time, however, this presumption can also be approached vice versa: Can an employee who does not meet the listed conditions be considered, in the end, an executive (?).

    In the event that we finally accept (and rightly so) that the presumptions of this MO are rebuttable, the criteria that, to date, have been formulated by the jurisprudence, will continue to be of particular importance.

     

    Entry into Force

    The entry into force of the above MO, in terms of its part concerning the introduction of a presumption for the characterization of an employee as an executive “… begins after the deadline for submission of the annual E4 Staff List for the year 2021”.

     

    The identification of some employees as Executives is an issue that has occupied, for many years, jurisprudence, business, employees and, ultimately, the economy. The criteria were set by court decisions. But there were no absolutely safe criteria. Each case was considered separately. The court decisions took into account the overall picture formed by the employee’s job and the tasks assigned to them. Therefore: there was no legal certainty.

    The above MO attempts to fill a particularly important gap in terms of establishing safe criteria regarding the characterization of an employee as an executive. Some move, inefficiently, in the right direction. Others are just wrong. And, finally, others are very problematic. It is therefore important that the necessary improvements are introduced.

    Such is important for another reason as well: for the Ministerial Order to become a useful and safe tool for assisting both businesses and employees.

    We all need it.-

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (December 19th, 2021).

     

    Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

  • Prohibition of discrimination at work

    Prohibition of discrimination at work

    The workplace is a pocket version of our society. It is therefore also a place of discrimination. Discrimination, in fact, seems to find more fertile ground in the workplace. It is true that important steps have been taken towards the elimination of stereotypes and social prejudices. The phenomena, however, of unfavorable treatment of employees due to their physical or acquired characteristics have not disappeared; they continue to be identified throughout the employment relationship: from hiring to termination.

    The legislator’s goal is to eliminate discrimination in the workplace. Attempts are being made in this context (at international, EU and national level) to address any discriminatory (and ultimately unfavorable) treatment through the introduction of prohibitive rules.

     

    The prohibition of discrimination in EU law

    Prohibition of discrimination has been a goal of the EU legislature (among others) for decades. Relevant regulations can be found, for example, in the Treaty on European Union (Article 19 §1) and in the Charter of Fundamental Rights (Article 21).

    Of particular importance are the Anti-Discrimination Directives: Directives 2000/43 and 2000/78 aim to combat discrimination based on racial or ethnic origin (the first) and to combat discrimination based on religion or belief, special needs, age or sexual orientation (: the second). Finally, Directive 2006/54 aims to ensure the implementation of the principle of equal opportunities and equal treatment of men and women in matters of work and employment.

     

    The prohibition of discrimination in national law

    The prohibition of discrimination is adopted and imposed by the national legislator through the transposition into national law of the above Directives:

    The transposition of Directives 2000/43 and 2000/78

    The transposition of the specific Directives was carried out with law 3304/2005. Its purpose was to establish a general regulatory framework for combating discrimination based on racial or ethnic origin, religion or other belief, disability, age or sexual orientation in employment and work, in order to ensure that the principle of equal treatment is applied (Article 1).

    Law 3304/2015 was limited to repeating the reasons for discrimination, as they were included in the aforementioned Directives. It was subsequently replaced by the current Law 4443/2016, which aims to create a single, clear and legally sound framework for the application of the principle of equal treatment. This law adopted, moving in this direction, the prohibition of the discriminations mentioned immediately above, but chose to add others as well: (a) color, (b) ethnic origin, (c) descent, (d) chronic illness, (e) marital status, (f) gender identity, (g) gender characteristics. It replaced the term “gender orientation” as anachronistic (see Explanatory Memorandum) with the term “sexual orientation”.

    This law added to the concepts of discrimination (in addition to the concepts of direct and indirect discrimination – as will be discussed below) the concepts of “discrimination on the basis of relationship”, “discrimination on the basis of mental characteristics”, “multiple discrimination” and “denial of reasonable adjustments”.

    Part of the legal theory maintained a critical attitude towards the specific expansion of the reasons that are forbidden to be a reason for discrimination. Their main argument was the possibility of potential interpretive issues based on the overlap of certain (pre-existing and added) personal traits. Also, the vagueness of the wording in relation to some of them. The concern (reasonably) recorded is that the widening of grounds for discrimination may lead to the excessive restriction of contractual and business freedom. And this without necessarily providing a higher level of protection.

    The transposition of Directive 2006/54

    Directive 2006/54 was transposed with law 3896/2010 (which replaced the pre-existing law 3488/2006). The purpose of the law is to ensure the implementation of the principle of equal opportunities and equal treatment of men and women in matters of work and employment, with regard to (Article 1):

    (a) access to employment (including vocational development), and vocational education (including vocational training);

    (b) working terms and conditions, including pay; and

    (c) occupational social security systems.

     

    Critical concepts

    In order to understand the prohibition of discrimination sought through the Directives and consequently the regulations of the national legal order, it is not enough to mention the features that are not allowed to become grounds for discrimination. Further, it is much needed to approach some critical concepts, which are mentioned in national legislation (as well).

    Direct discrimination

    Direct discrimination is considered to be the least favorable treatment of a person because of a personal trait, which is forbidden to be a reason for discrimination. A measure of comparison is the treatment that another person receives, has received or would receive in a similar situation (article 2 of laws 4443/2016 and 3896/2010).

    Indirect discrimination

    The provision of effective legal protection against discrimination, however, and the avoidance of circumvention practices, in addition, require the prohibition of indirect discrimination (as well).

    Indirect discrimination exists when a seemingly neutral provision, criterion or practice may cause a person who bears one of the protected personal characteristics to be treated less favorably than others (Article 2 of Laws 4443/2016 and 3896/2010).

    In the case of indirect discrimination, however, the fact that disadvantageous treatment is not due to the protected trait is to be proved. This occurs when: (a) the provision, criterion or practice in question is objectively justified by a legitimate goal and (b) the means to achieve that objective are appropriate and necessary.

    Harassment

    The concept of discrimination also includes the case of harassment. Harassment occurs when unwanted behavior is associated with one of the protected traits, with the intent or effect of violating the dignity of that person and creating a threatening, hostile, degrading, humiliating or aggressive environment.

    The concept of harassment is of special importance and needs to be effectively addressed in the context of the new labor law (: 4808/2021), as we analyzed extensively in our relevant article (on the prohibition of violence and harassment).

     

    Grounds for discrimination

    The prohibition of discrimination has not become (and rightly so) absolute. On the contrary, according to Law 4443/2016, specific objective reasons are recognized which, if any, justify certain discriminations. The legal theory, however, argues that the non-absolute nature of the prohibition of discrimination must be accepted also in the case of Law 3896/2010.

    The provision of a. Law 4443/2016 provides for exceptions (general and specific) that render conditional the protection against discrimination.

    In particular, the general exception may apply to any protected personal trait. In this context, any discrimination is not considered prohibited, in case the different treatment is connected with a substantial and decisive professional condition and if the relevant purpose is legitimate and the condition is proportional. For example, the distribution of a role to an elderly person does not constitute a prohibited discrimination, if this is required for reasons of authenticity.

    Special exceptions include any discrimination based on religious or other beliefs or age. The exceptions regard discriminatory treatment that is an essential, legitimate and justified professional requirement.

     

    Procedural facilities

    Effectiveness in tackling discrimination is also sought through the procedural facilities provided to victims of discrimination. These facilities include:

    (a) Reversal of the burden of proof: In the event that a case of prohibited discrimination is brought before the courts (or other competent authorities), it is provided that it is sufficient that the plaintiff proves the facts (to provide indications) from which the existence of direct or indirect discrimination is presumed. This means that the defendant is required to prove that any discrimination, if it took place, is not based on a protected feature (Article 9 of Law 4443/2016 and 24 of Law 3896/2010).

    (b) The possibility of representing the alleged victim of discrimination: The alleged victim may be represented before the courts, administrative authorities and bodies by an organization whose purpose is – inter alia – to ensure compliance with the principle of equal treatment. Necessary condition is the consent of the victim (article 8 §3 law 4443/2016 and 22 §2 law 3896/2010).

     

    Discrimination, as mentioned in the introduction, is, unfortunately, a trait of our society.

    However, it significantly and with great intensity burdens the workplace.

    Several pieces of legislation (national and EU) aim to reduce discrimination and its consequences, with the aim of assisting (for a number of reasons) those affected.

    The protection, however, of those employees who have certain characteristics or who, for some reason, have a disadvantage compared to others, should not take place because of an obligation to comply with the law but it should rather be an act of individual and social responsibility. That is when the undoubted positive results will not only affect those with the special characteristics mentioned in the law, those who have a disadvantages and the workplace.

    They will primarily affect the businesses and society itself.-

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (December 12th, 2021).

     

    Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

  • Teleworking: The protection of the teleworker and the right to disconnect

    Teleworking: The protection of the teleworker and the right to disconnect

    The recent labor law (: law 4808/2021), reformed -among other things- the legal status of telework. In a previous article, we already mentioned issues related to the teleworking agreement and its terms. Concluding the basic overview of the issues that concern it, we will now attempt an approach to the issues related to employee protection as well as health and safety issues. Also, the extremely important (and interesting on many levels) right to disconnection.

     

    Maintaining the type of employment relationship

    The legislation on teleworking focuses, in particular, on the (multifaceted) protection of the (teleworking) employee.

    The (teleworking) employee can be employed under a contract of employment (full: full-time or part-time). The teleworking agreement does not affect or change the employment status and employment contract of the already employed (teleworking) employee. It simply changes the way the job is done.

    Additionally: Teleworking can be provided in full-time, part-time or rotational employment, solely or in combination with employment in the employer’s facilities (art. 67 §6).

     

    Prohibition of discrimination between employees and teleworkers

    Any discrimination between employees and teleworkers (§7) is not tolerated. The business is obliged to treat them equally – with the (self-evident) reservation of differences due to the nature of teleworking.

    Teleworkers are recognized with the same rights and obligations as the (comparable) employees employed on the premises of the enterprise or holding, in particular in relation to: (a) workload, (b) evaluation criteria and procedures, (c) rewards, (d) access to information concerning the enterprise, (e) their training and professional development, (f) membership in unions, (g) their trade union activity and (h) their unimpeded and confidential communication with the trade union representatives.

     

    Protection of personal data

    The monitoring of the teleworker’s performance by their employer must take place in a way that respects the privacy of the former. Also, it must be in compliance with the protection of personal data (§8 a΄).

    Particularly important (and on a practical level) is the explicit prohibition of the use of a camera to monitor the performance of the employee (§8 a΄). It is of course easy to understand that in cases where the use of a camera is allowed (inside: above the store cash register or in the context of the examination process for obtaining a certification, etc.) one could hardly imagine how the evaluation of the employee by their employer would not factor in (albeit implicitly) the recording of the relevant cameras…

     

    Protection of the health and safety

    The protection of the health and safety of teleworkers is a very important, complex and, practically, thorny issue.

    The teleworker usually provides their work from home (potentially from other places as well, eg telecentres). However, the actual fact of providing work from a place other than the business’s premises deprives, in practice, the employer of the possibility of controlling that space.

    This finding brings, in a way, the teleworking space to be under the term “workplace”. This is because the place of work is (: art. 3 §1 e’ law 3850/2010) every place “… where the employees are or go to because of their work and which is under the control of the employer”. A counter-argument to this position is, inter alia, the provision of clause 8 of the Framework Agreement on Teleworking. The latter explicitly provides for the possibility of the employer, employees’ representatives and the competent authorities to have access to the telework site, in order to be able to verify the correct application of the health and safety provisions. Clearly, after consultation with the employee.

    The fact of the impossibility of real control of the teleworking space seems to have been taken into account, to a certain extent, by the legislator.

    The employer, on the one hand, has the obligation (: art. 9) to (specifically) inform the teleworker about the business’s policy regarding health and safety at work. The relevant policy should include, in particular, the specifications of the telework site, the rules for the use of visual displays, the breaks, the organizational and technical means required to ensure the right to disconnection, and any other necessary elements.

    The teleworker, on the other hand, is obliged to apply the legislation for health and safety at work. They obliged (!), at the same time, not to exceed their working hours.

    Given, in fact, the specific practical difficulties with which the employer is faced, the legislator introduces a presumption of compliance with the above obligations. During the provision of teleworking, it is presumed (article 67 §9 law 4548/2018) that “… the teleworking space meets the … specifications and that the teleworker complies with the rules on hygiene and safety”.

     

    The right to disconnect

    For the first time in the national legal order, we see provisions for the identification and securing of the right to disconnection (: §10 article 67 of law 4808/2021).

    This particular right has already occupied us in our previous article. We have pointed out, since then, that this is a right reserved for teleworkers. We noted, however, its importance in those cases where the employee, given the technological development, may be employed after the end of their work (eg through answering phone calls and e-mails). Especially in cases of readiness to provide work. The above cases do not appear to justify (at least sufficiently) the differentiation. They also do not seem to justify the non-reservation of the right to disconnection in these cases as well, as is the case for employees teleworking.

    The right to disconnection consists (: §10) of the possibility / right of the teleworker «… to abstain completely from the provision of their work and in particular, to not communicate digitally and to not answer phone calls, emails or any form of overtime communication during their legal leave”.

    The specific, absolute, wording about banning any communication raises concerns, as it may lead to unfair outcomes for the business. Especially when emergencies or incidents arise that constitute force majeure (or are on the verge of constituting force majeure), and they make necessary the provision of telework – in excess of the schedule, of course. Based on the specific data, the teleological contraction of the specific regulation is deemed necessary. At the base, of course, of good faith.

    It must, of course, be accepted that the right to disconnection covers only communications which constitute provision work. This means that arrangements between the employer and the employee on the terms of employment (eg shift change) do not violate the right to disconnection. Therefore, it would be reasonable to consider that the employee is not entitled to refuse such communications.

    It is further provided (: §10) that, in order to ensure the exercise of the right of disconnection, “any discrimination against a teleworker is prohibited, because…”, precisely, they exercised it. A special regulation (art. 66 §1 g.j.d.) explicitly provides for the invalidity of a possible termination of the employment contract of a teleworker due to the exercise of the right to disconnection (as we have pointed out in a relevant article).

    Ensuring the teleworker’s right to disconnect requires a number of technical and organizational means. The specific means are, according to the law (art. 67-10), a mandatory condition of the telework contract and are agreed between the employer and the employees’ representatives. But such an agreement is not, in the end, necessary. When missing, the specific means are determined by the employer who then discloses them to all employees.

    A Presidential Decree is expected to be issued to determine, inter alia, these means (: §12-and immediately thereafter). However, from today, an interesting facilitation emerges: The disconnection of the employee can easily be achieved by the action of the latter or, more precisely, by their failure to communicate in any way (by telephone or digitally). Such an omission does not require (nor is it served) by technical or organizational means. The provision of such instruments may relate, in particular, to the accurate recording of working time, in which case their role becomes basically precautionary.

     

    The enabling provision

    As we mentioned immediately above, the issuance of a Presidential Decree is expected (: §12) which will regulate and specify particularly important issues related to the provision of telework. The issuance of this PD will take place after a proposal of the Minister of Labor and Social Affairs but also after the opinion of the Authority for Ensuring the Confidentiality of Communications and the Authority for the Protection of Personal Data.

    Its subject:

    (a) the specific rules for the health and safety of telework;

    (b) the minimum technical and organizational means to ensure the exercise of the right to disconnection;

    (c) the declaration of teleworking hours at the ERGANI Information System,

    (d) the inspection process by the Labor Inspectorate. In particular, its access to business and employee metadata and communication data via private or public telephone or internet networks and digital data transmission, which is necessary to monitor compliance with working hours. And,

    (e) any other details related to the application of article 67 of law 4808/2021.

    However, the issuance of this decree is (also) pending.

     

    We also mentioned in the previous article of the series (related to teleworking) the introduction of teleworking into daily lives – both ours and businesses’. As is usually the case, the legislator came afterwards to cover the needs that life creates and the gaps that we already experience.

    The point, however, is that in this case (also) the regulation comes not only late but also incomplete.

    Several months after the enactment of the (indeed) important labor law (: Law 4808/21), its basic parameters are missing. In fact, as far as telework is concerned, the absolutely necessary parameters are missing: a Ministerial Order and a Presidential Decree, which will clarify the (really blurry) landscape and will assist, to the absolutely necessary degree, both the companies and the (teleworking) employees.

    We look forward not only to their as soon as possible issuance, but also to their limitation, within logic.-

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (December 5th, 2021).

     

    Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

  • Teleworking. Agreement and terms

    Teleworking. Agreement and terms

    The recent labor law (: Law 4808/2021), brought about a number of amendments to the labor legislation – many of them have also occupied us in our recent articles. It replaces, among others, the current regulation, in place until recently, for teleworking (: no. 5, law 3846/2010). For now we will deal with issues related to the teleworking agreement and its terms. In the next article we will deal with issues related to employee protection, health and safety issues. Also, the (particularly important) right of disconnection.

     

    What is teleworking?

    According to the law (: art. 67, law 4808/2021): “teleworking is the remote provision of the employee’s dependent work also with the use of technology, under full-time, part-time, rotational or other form of employment contract, which could also be provided by the employer”.

     

    The voluntary nature

    The recent (as well as the older) regulation provides for the basically voluntary nature of teleworking. In this context, an employer-employee agreement is required (art. 67 §2, law 4808/2021).

    The teleworking agreement can (and is) verbal. As long as the written form is not required by the type of employment contract (in part-time employment contracts, e.g.). Furthermore, the teleworking agreement may be the subject of both the original agreement between the employer and the employee – upon recruitment or after a subsequent amendment.

    However, in the latter case (: modification of an existing employment contract), the question arises as to the existence (or not) of a right of revocation. In contrast to the previous regime, article 67 no longer regulates this right.

    The answer to this question depends on whether or not we accept the parallel implementation of the Framework Agreement [: integration into the national legal order (: General National Collective Employment Convention 2006-2007-Appendix B’) of the European Agreement- Framework for Teleworking]. The new provision (: art. 67) seems to be in force along with the Framework Agreement on teleworking. This conclusion is deduced from the letter of the law, which explicitly provides that the new regulation replaces, only, article 5 of law 3846/2010.

    Clause 3 of the above Framework Agreement provides that: “If teleworking is not part of the initial job description, the decision to switch to teleworking is revoked by individual and / or collective agreement. Revocation may involve a return to work on the employer’s premises at the request of the employee or employer. The details of this revocation shall be determined by individual and / or collective agreement”.

    Based on these data, the teleworking agreement is freely revocable when it is agreed with a later employer-employee agreement. In this case (also) the contractual arrangement of the details of the revocation should therefore be considered safer.

    Individual parameters of teleworking (: teleworking hours and ratio of teleworking and work in the employer’s facilities) must, however, be declared to the Information System ERGANI (art. 67 §11).

     

    The unilateral imposition of telework

    Despite the essentially voluntary nature of teleworking, it can sometimes be imposed unilaterally. This can exceptionally happen (if the work can be provided remotely) for specific reasons only:

    (a) Following a decision by the employer, for reasons of public health protection. A relevant CMO of the co-responsible ministers is required (art. 67 §3 per. Α΄, law 4808/2021).

    (b) At the request of the employee, in case of documented risk to their health, which will be avoided if they telework. The diseases, disabilities and illnesses that can document such a risk are expected to be determined through a CMO (art. 67 §3 para. b΄). However, the issuance of the latter is pending. Nonetheless, the employer may, for some reason, disagree with the satisfaction of the employee’s request. The resolution of the relevant dispute will take place by the relevant Labor Inspectorate.

    (c) At the request of parents of children up to twelve (12) years of age or caregivers, who are entitled to request, for their convenience, flexible work arrangements, including telework (art. 31). This right has already occupied us in our previous article. There, we have already pointed out that the precondition is the completion of six months of employment (continuously or through successive fixed-term employment contracts), at the same employer. The employer must consider and process any relevant request within a month.

    (d) As a temporary measure of protection against an imminent danger to the life or health or safety of an employee from an incident or conduct of violence and harassment. This temporary measure is imposed either by a decision of the employer or following an order, with immediate effect, by the Labor Inspector (the role of the Labor Inspectorate, in general, in cases of violence and harassment have also occupied us in the context of our previous article).

     

    The obligation to notify the terms of telework

    The informal, in principle, nature of the telework contract is relativized. This is because there is an obligation for written notification of the terms of telework (art. 67 §5 law 4808/20215). The written notification of the working conditions – in general, concerns an already known obligation of the employer. It stems from the Presidential Decree no. 156/1994 and has occupied us in our previous article). In this case, however, the obligation to notify the terms of teleworking constitutes (according to the explicit provision of Law 4808/2021), an additional obligation of the employer-in relation to what is provided under this Presidential Decree.

    This obligation to notify must be fulfilled within 8 days from the start of the telework. It refers to the terms of the employment contract that are modified due to teleworking. These are, for example:

    (a) The right to disconnect.

    (b) The analysis of the additional costs, which are periodically borne by the teleworker due to the telework.

    (c) The equipment necessary for the provision of telework (available to the teleworker or provided by the employer) as well as the procedures for technical support, maintenance and repair of the damage of this equipment.

    (d) Any restrictions on the use of IT equipment or tools and penalties in the event of their breach.

    (e) Agreement for readiness to provide telework, its time limits and employee response deadlines.

    (f) The hygiene and safety conditions of teleworking observed by the teleworker and the procedures for announcing a possible work accident.

    (g) The obligation to protect the professional data as well as the personal data of the teleworker and the actions and procedures required for the fulfillment of said obligations.

     

    The notification to the respective employee of the terms of their employment contract, which differ due to telework, can take place in any way. Even via email. Moreover, when these terms do not apply individually to an employee, they may be communicated collectively. In particular, the law provides that these terms may be communicated to interested parties by posting on the company’s intranet or by notifying a relevant business policy.

    Individual parameters of teleworking (: teleworking hours and ratio of teleworking and work in the employer’s facilities) must, however, be declared to the ERGANI Information System (art. 67 §11).

     

    The cost of telework

    According to the explicit provision of the law, the cost of teleworking is borne by the employer (art. 67 §4 law 4808/2021). This is the total cost of telework [: equipment costs (eg ergonomics or electronic equipment), telecommunications, equipment maintenance, fault repair or equipment replacement].

    However, by agreement of the parties, the costs incurred by the employer may be reduced. This happens if it is agreed that the employee will use their personal equipment. Similarly, the cost of repair can be agreed to be borne by the employee, if they use their equipment. Otherwise, the costs of repairing the employee’s equipment are borne, based on the above, by the employer.

    The costs of teleworking are explicitly excluded by law from the employee’s salary. On the contrary, the law stipulates that these costs constitute a deductible expense for the employer. Given its specific nature, the cost of teleworking is not subject to tax or fee, nor are insurance contributions due to it. While, although not explicitly provided, this cost, since it does not constitute a salary, is not protected under criminal law, it can be offset and confiscated.

    The method of monetary reimbursement of the above mentioned expenses must be defined in the contract or employment relationship of the employee. However, the determination of these costs was not possible until the very recent issuance of the MO which proceeds to determine the above costs.

    Specifically, the authorizing provision of article 79 §1 of law 4808/2021 provides that “by decision of the Minister of Labor and Social Affairs the minimum amount of par. 4 of article 67 is determined, in particular based on the frequency and duration of telework, the provision or not of equipment by the employer, the direct coverage of expenses by the employer or not and any relevant details “. However, the issuance of this MO is still pending.

    The delegated MO determines the minimum amount of teleworking expenses as follows:

    For the use of the home as the workplace, 13 euros.

    To cover the cost of communications, 10 euros.

    For the maintenance of the equipment, 5 euros.

     

    Teleworking not only entered violently, due to the lockdown, in our life and in the labor relations of our country but also (as, again we have supported in a series of presentations, workshops and articles) “is here to stay”.

    And it has stayed.

    The provisions of the recent labor law are moving in the right direction. But they prove to be incomplete. And this, because for a significant period of time after its passing, the (absolutely necessary) Ministerial Orders, which would have filled its gaps, had not been issued.

    Businesses have been and are still called upon to improvise, taking the risks themselves.

    Once again.-

     

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (November 28th, 2021).

     

    Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

  • Termination of the Employment Contract for an Indefinite Time. The Substantive Conditions

    Termination of the Employment Contract for an Indefinite Time. The Substantive Conditions

    Termination of the employment contract is one of the most important sections of Labor Law. The recent labor law (: law 4808/2021) brought changes in this part as well.

    In our previous article, we were concerned with the reapproaching of the formal conditions for the validity of the termination of the employment contract of indefinite period by the employer. We were also concerned about the legal consequences of non-compliance.

    In this article we will deal with its substantive conditions, the burden of proof and the legal consequences of the defective termination by the employer.

     

    List of cases of invalidity

    Article 66 §1 of Law 4808/2021 records specific cases of invalidity of the termination of the employment contract of indefinite period. Indicatively, if it:

    (a.) is due to discrimination against the employee or due to revenge, or

    (b.) occurs in response to an exercise of an employee ‘s legal right; or

    (c.) is contrary to another specific provision of law, in particular when it comes to dismissal:

    (c.a.) due to discrimination or due to a request for legal protection, to ensure compliance with the principle of equal treatment;

    (c.b.) due to the exercise of rights in case of violence and harassment;

    (c.c.) is a dismissal of pregnant women and women in the postpartum period, as well as of the father of a newborn child, when there is no grerat reason;

    (c.d.) is in response to a request or authorization or flexible arrangement for childcare;

    (c.e.) is during the annual leave,

    (c.f.) is of persons with many children, of disabled and generally of persons under a protective regime, who have been forcibly placed when the legal conditions have not been met,

    (c.g.) is of persons in the military,

    (c.h.) is of trainee employees in tourism enterprises,

    (c.i.) is implemented in violation of the legislation on collective dismissals,

    (c.j.) is of trade unionists, members of employees’ councils, when there is no great reason;

    (c.k.) is due to legal union action of the employee,

    (c.l.) is due to non-acceptance by the employee of the employer’s proposal for part-time or rotational work;

    (c.m.) is of employees who refuse the management, which has been collectively agreed and whose refusal is not contrary to good faith, as well as of employees who have not applied for a management, even though they have been asked to do so by the employer;

    (c.n.) is of employees exercising the right to disconnection.

    If the cause of such a termination falls into one of these cases, the already known legal consequences occur. Practical: the employee is entitled to claim recognition of the invalidity of the termination of their contract. In addition, they are entitled to request their re-employment but also the payment of arrears of wages for the period when the employer did not accept their services.

    The list of cases of invalidity is indicative. This is clear from circumstance c΄ of §1. The latter stipulates that the termination of the employment contract by the employer is invalid, as long as it is contrary to “… special provision of law and in particular…” to specific special regulations which, subsequently, the legislator explicitly invokes (ca. c.a.-c.j.).

     

    The burden of proof

    Regarding this issue, it is provided that (art. 66 §2): “if the employee proves in court facts that can support the belief that the dismissal took place for one of the reasons of par. 1, it is up to the employer to prove that the dismissal did not take place for the alleged reason.”

    This is obviously a (proof) facility in favor of the employee. In particular, if the employee invokes and proves a fact which may support the belief that their dismissal took place because of the fact invoked, then the employer must prove otherwise. The burden of proof, that is, is reversed and the employer must prove that they did not terminate the employment contract for the prohibited reason alledged by the employee.

    Of course, the evidentiary facility seems to concern, at a first level, all the cases of §1. This, however, loses its meaning for some of the cases provided there. Indicative: dismissal during the period of the leisure leave which, in any case, is prohibited and for this reason there is no question of proof (beyond the time of its execution). Also, the termination of the employment contract of a pregnant woman who, in any case, also requires the existence and invocation of an important reason by the employer, otherwise it becomes invalid (art. 15 §1 law 1483/1984).

     

    The possibility of paying additional compensation

    To the consequences of the invalid termination of the employment contract of indefinite duration by the employer an alternative one is added (§3, art. 66) this time: In cases of defective termination (with the exception of those already mentioned above – §1 i.e. of the same article), the court, instead of another consequence, awards an additional amount of compensation in favor of the employee.

    The aforementioned restriction leads to the conclusion that §3 includes cases of invalid dismissal which are either not explicitly listed in paragraph 1 or are not contrary to a specific provision of law, even if the latter is not specifically mentioned in §1. Therefore, the scope of this provision (§3 of art. 66) includes any termination of an employment contract that is contrary to a general provision of law. Also, that is, those that are exercised abusively (: article 281 of the Civil Code).

     

    The review of the abuse of the right of termination

    Despite the non-casual nature of the termination of the employment contract of indefinite duration, it is not possible (according to both theory and case law) to oppose good faith and fair dealing. It is therefore possible to have a judicial review on the basis of the relevant provision (: art. 281 of the Civil Code).

    The case law has created criteria for reviewing the termination on the basis of 281 of the Civil Code, the non-observance of which affects its validity. These criteria include:

    (a) The principle of the ultima ratio: Both the Supreme Court and the courts of the substantive assess whether the reasons which led to the termination of the employment contract, make, in fact, the termination necessary. In particular, the termination is the most onerous measure for the employee. Therefore, it should be the last resort of the employer. In case the interests of the employer can be satisfied with less burdensome measures for the employee, the termination from the part of the employer is void.

    (b) The principle of proportionality: This principle is used by the jurisprudence as a criterion for specifying the general clause of good faith (int .: 897/2012 Supreme Court). Any, in fact, violation of art. 281 of the Civil Code and in particular of the principle of proportionality is reviewed by case law in the case of termination of an employment contract for failure to comply with the prescribed disciplinary procedure.

    (c) The correct choice of the dismissed: In cases where economic and technical reasons justify the employer’s choice to terminate the employment contract, the latter may be considered invalid as abusive, if the employer does not select the employee to be dismissed based on social and financial criteria. As such criteria are defined by the jurisprudence as the seniority, age, financial and family status of each of the comparable employees (int .: 722/1999 Supreme Court). And this obligation derives, as the case law accepts, from the principle of good faith.

    (d) The amending termination: The amending termination is a milder measure than the (common) termination. This is a continuation of employment with different working conditions than the agreed upon. And this termination is subject to the review of 281 Civil Code.

    (e) The submission of a complaint before the court as a mere pretence: The exercise of the right of termination is also subject to abuse review in cases in which, although a complaint or lawsuit has been filed against the employee, it is filed as a mere pretence. Specifically, when the criminal prosecution constitutes the reason for the termination, the validity of the latter suffers, when the employer knows the false accusations against the employee.

     

    How to exercise the right to additional compensation

    We have seen above that the termination of the employment contract may suffer for some other reason than those mentioned above – and explicitly refer to §1 (which brings about its invalidity). In this case it is possible, as already mentioned, to ask the court, alternatively (instead of the consequences of the invalidity: re-employment and arrears of wages) for additional compensation. The request can be submitted either by the employee or by the employer at any stage of the proceedings (in the first or second instance).

     

    The amount of the additional compensation

    The amount of the additional compensation cannot (art. 66 §3) be less than the regular salary of three (3) months nor more than twice the legal compensation – due to termination at the time of dismissal. As a criterion for determining its amount, the court takes into account (in particular) the severity of the employer’s fault and the property and financial situation of both (employee and employer).

     

    The possibility of paying additional compensation at the request of the employee

    The employee can request the payment of the above additional compensation in case the complaint suffers for some reason mentioned in §1 -for a reason, ie, which falls within the list of cases of complaints listed there. In this case, the employee is given the right to claim the aforementioned additional compensation – instead of acknowledging the invalidity of the complaint and the occurrence of its consequences.

     

    The prohibition of cumulation of claim for invalidity and additional compensation

    In case the employer files a lawsuit with a request for additional compensation, if one of the prohibitive reasons of §1 is met, «… no request can be accumulated for the recognition of the invalidity of the complaint and the occurrence of the legal consequences of the invalidity, provided that the two requests are based on the same historical and legal basis” (art. 66 §6). According to the letter of the law, this accumulation, even if ancillary, “… leads to the rejection of both as unacceptable.”.

    Therefore, in order for the employee to claim, in this case, the additional compensation, it is presupposed that they cannot claim, at the same time, the occurrence of the legal consequences of the invalidity of the termination of their employment contract (eg re-employment and arrears of wages).

     

    The law of termination of employment contract for an indefinite period is being modernized and rationalized.

    It is already moving in the direction of avoiding time-consuming and costly procedures, in the direction of alleviating the significant burden of cases that concern the courts, in the direction of easing companies and facilitating employees.

    It is ultimately moving towards the benefit of the real economy.

    The (positive) results will soon begin to appear

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (November 21st, 2021).

     

    Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

  • Termination of the Employment Contract of an Indefinite Duration. The Formal Conditions

    Termination of the Employment Contract of an Indefinite Duration. The Formal Conditions

    We were given the opportunity, on the occasion of our current articles on the new labor law (: Law 4808/2021), to point out that, in essence, the new law “rewrote” labor law. One of its most important changes refers to the law of termination of employment contracts of indefinite duration. Reformed, in part, both the formal and substantive conditions, which must be met for the validity of the complaint. Its reform, however, went even further: in its legal consequences.

    In this article we will deal with the formal conditions for the validity of the complaint. We will refer, in addition, to the legal consequences of non-compliance.

    The typical conditions for the validity of the complaint are summarized as follows: (a) written form, (b) notice period, (c) severance pay and (d) social security coverage of the employee.

    In more detail:

    (a) Document type

    Termination of an employment contract of an indefinite period constitutes a formal legal act. In other words, it should be in written (art. 1 law 2112/1920 and 5 §3 law 3198/1955). The document of the termination must clearly state the statement of termination by the employer. However, it is not required to state the reason for the termination (: except for those cases that are explicitly required by law – eg: case of termination of employment contract of a pregnant woman, for which a justification and an important reason are required – no. 10 §2 Presidential Decree 176/1997 and 15 Law 1483/1984).

    In case of non-compliance with the written form, until recently, there was no possibility of treatment. Such a possibility, however, is provided by law 4808/2021. The provision of article 66 §5 provides that “… if during the termination of the contract of employment the conditions of par. 3 of article 5 of law 3198/1955 (note: including the written form) were not observed and with the exception of the payment of severance pay, the validity of the complaint is strengthened, if the employer covers the omission of the formal condition which was not met within 1 month from the service of the relevant lawsuit or from the submission of a request for settlement of a labor dispute. In the event that the fulfillment of the specific conditions takes place after the above deadline, this fulfillment is considered as a new complaint and the previous one as non-existent “.

     

    (b) Warning period

    As a formal condition for the termination of the employment contract of employees (but not, until recently, of workers) is considered the observance of the notice period set, each time, by law. The last (: deadline) suspends the results of the termination while, after its expiration, the employment contract is terminated. Failure to comply with the deadline does not affect the validity of the complaint. In case of non-compliance, the complaint loses its character as aν ordinary termination and becomes dismissal without notice.

    The duration of the notice period (four months, maximum) depends on the duration of employment of the employee whose contract is to be terminated.

    The observance (or not) of the due notice period forms the amount of the legal dismissal compensation to be paid by the employer.

    In case of dismissal without notice (: the most common case), the employer owes the entire compensation provided by law (which is proportional to the duration of employment of the employee). On the contrary, in case the employer terminates an employment contract, observing the (mandatory) notice period, they are obliged to pay only half of the full dismissal compensation (art. 1 law 2112/1920, 4 law 3198 / 1955).

    When the termination of the employment contract is selected in compliance with the notice period, the employment contract remains in force during it. This means that the relevant, main and ancillary obligations of the employer and the employee are also in force. In this context, under the previous legislation, the employer could not refuse to accept the employee’s services during the notice period. In any other case, they become overdue. In the event that the employer unilaterally decided not to accept the services of the employee, this decision was equivalent – with the pre-existing legal regime, with a new dismissal without notice. In this case, full compensation was due.

    The specific data could not be ignored by the employer in case of termination of employment contracts. The stay of an employee at work, for a period of one (1) to four (4) months, while they know that their contract has been terminated, carries, without a doubt, very serious risks for the business – related, among other things, to confidentiality issues and competitive actions. Respectively, the imminent termination of the employment contract deprives the employee of the incentive for the best possible performance of their duties. This data may, reasonably, push the employer to eliminate the notice altogether. This, in the end, is to the detriment of the employee, who, all of a sudden, find themselves looking for a new job.

    With the new legislative data (art. 64 §1 law 4808/2021): “all discrimination between employees and craftsmen regarding the notice period is abolished…”.

    The obligatory provision of the services of the employee (employee or craftsman) also ceases (art. 65) during the notice period. The employer, from now on, has the option to release (unilaterally) the employee from the obligation to provide work (either partially or in total), after the notification of the termination. In this case: (a) the remuneration of the employee is paid in full until the expiration of the notice period and (b) the employer does not become overdue in terms of acceptance of the work.

    In addition (and it is indeed important), if the employer relieves the employee of the obligation to provide work, the employee is entitled to take up employment with another employer during the notice period. In this case, in fact, the results of the termination and the amount of severance paid are not affected. That is, an explicit exception is established from the provisions of article 656 of the Civil Code and the objection of the “earnings from other sources”.

     

    (c) Dismissal compensation

    The payment of the foreseen severance pay to the employee seems (and is) the most important, among the formal conditions, regarding their protection.

    The severance pay is paid either in full on the day of termination (or the expiration of the notice period – if it is observed) or in installments, in cases and in the manner prescribed by law (: no. 74 Law 3863/2010). The amount of the severance pay depends, as already mentioned, on the years of service of the employee to the employer. According to the case law of the Supreme Court, this compensation constitutes “in a broad sense the exchange of the provided work” (32/2005 Plenary Session of the Supreme Court, NOMOS).

    Any non-payment of the legal severance pay (in full or in part) results in the invalidity of the termination of the employment contract (articles 5 §3 law 3198/1955, 3 §1 law 2112/1920, 1144/1983 Plenary Session of the Supreme Court, NOMOS).

    The above is not changed by the provisions of the new law. The non-payment of the dismissal compensation is explicitly excluded from the formal conditions that can be treated based on what the law stipulates (art. 66 §3 law 4808/2021).

    It is expressly provided, however, that “when the amount of the compensation paid is less than the amount of the legal compensation, due to an obvious error or reasonable doubt as to the basis for its calculation, the annulment of the complaint is not recognized, but its completion is ordered” (66 §3 in fine Law 4808/2021). Corresponding treatment was accepted by the jurisprudence under the previous regime. Specifically, the validity of the complaint was saved, in cases where the incomplete payment was justified on the basis of good faith checks (eg: in cases of forgivable error or reasonable doubt of the employer for the full amount due -ind .: 918/2013 Supreme Court, 585/2011 Supreme Court, NOMOS).

    One of the main changes brought by Law 4808/2021 concerns the abolition of discrimination between employees and craftsmen, which enters into force on 01.01.2022 (articles 64 and 80 §2). Under the current regime, until 31.12.2021, the compensation for dismissal of craftsmen is significantly lower than that of employees. This unfavorable treatment raises, as part of the theory, questions of constitutionality. This, however, is not accepted by the case law. From the new year, every provision, which governs the termination of the employment contracts of employees, also applies to the craftsmen.

    The distinction between employees and craftsmen (as far as severance pay is concerned) is no longer valid. From 1.1.2022 they are equalized. For their equation, as regards the severance pay, it is provided that “… the monthly wage of the craftsman is considered to be the 22 wages, unless they are already paid a monthly salary” (article 64 §3).

     

    (d) Social security coverage

    The fourth and last condition for the legal (and third in terms of validity) termination of the employment contract by the employer is the obligation of social security coverage of the employee. In other words, the obligation of the employer to have registered the employment of the dismissed in the salaries kept for the IKA (now EFKA) or to have insured the dismissed (article 5 §3 law 3198/1955).

    Failure to comply with the above condition invalidates the termination of the employment contract. Its validity, however, is strengthened, if the employer covers the formal omission within one month from the filing of a relevant lawsuit or the submission of a request for resolution of a labor dispute (article 66 §5 of law 4808/2021).

     

    The termination of the employment contract of an indefinite period is very important for the employee. Undoubtedly for the employer as well. In order to ensure its validity, it is extremely important that certain formal conditions are met. Under the pre-existing legal regime, failure to comply with them led to the annulment of the complaint. The case law sometimes saved the day (in cases, for example, of incorrect, unintentional, calculations of the compensation due).

    The recent law rationalizes the relevant data. Its above-mentioned interventions (regarding the formal conditions of the complaint) are moving in the right direction. And not just because they facilitate the smooth running of the business. In addition, they relieve the courts of a significant burden of cases, without particular value, which were brought before them. They also release the extremely large number of persons involved in such (meaningless) trials (: parties, witnesses, lawyers) to engage in the real economy. For the benefit, no doubt, of the latter.

    In the next article, however, we will be concerned with the other, extremely interesting, issues arising from the new law, which are related to the termination of the contract of indefinite employment.

    Also for the benefit of employees, businesses and the economy.-

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (November 14th, 2021).

     

    Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

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