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The obligation of the company to pay the accrued salaries of its employees seems self-evident. The corresponding claim of the latter is also self-evident. But what happens when the company is not able (or simply chooses) not to pay the dues? In a previous article we talked about the relevant risks of the business.

Here we will focus on one more important risk: The possibility of perceiving the non-payment of wages due as a unilateral detrimental change in working conditions. What happened in the past? What is happening today? And what is the approach to this issue in the light of the current recession?

The importance of the salary and its protection

We talked extensively about the importance of salary in our article mentioned above.

As already mentioned there, the payment of the legal or, as the case may be, the agreed salary is the basic-the main obligation of the employer (648 CC). It is their consideration in order to utilize for their own benefit the work of the employee.

The salary is the means of livelihood of the employee – so its value is indisputable. The law therefore provides important means for protecting it.

We also, in our article mentioned above, referred to the option that the employee, basically, has in case of non-payment. Of course, in the (related) risks of the business as well.

Delay in the payment of wages as a unilateral detrimental change in working conditions

However, the employee is provided with another important option: To consider the delay in the payment of their accrued salaries beyond two (2) months as a unilateral detrimental change of their working conditions. And this, regardless of the cause of the delay (article 58 of law 4635/2019).

This provision applies to employment contracts of indefinite duration. In fixed-term contracts, non-payment of wages can be a serious ground for termination.

This provision is an amendment of article 56 of law 4487/2017. This regulation recognized, for the first time, the non-payment of wages as a unilateral detrimental change in working conditions.

The provision of article 7 of law 2112/1920 (provided, until 2017, that): “Any unilateral change of the terms of the employment contract that harmed the employee, is considered as a termination of the agreement for which the provisions of this law apply. Such a case may the transfer of an employee to an office abroad, if the transferred employee does not accept the transfer. ”

The unilateral detrimental change of working conditions (concept & legal consequences)

Delays in the payment of accrued salaries beyond two months are explicitly recognized, as already mentioned, as a case of unilateral detrimental change in working conditions.

But what does “unilateral detrimental change in working conditions” mean? And what are its legal consequences?

According to the jurisprudence, “unilateral change” is considered any modification of the working conditions by the employer, which is made in breach of the employment contract. Regardless of whether it is beneficial or harmful for the employee. However, in order for the unilateral change to be subject to Article 7 par. a of law 2112/1920, it is required to be harmful to the employee. To cause, that is, direct or indirect material or moral damage to them (indicatively: 1370/2010 AP).

A detrimental change does not occur, when it has been agreed in advance with the employment contract that the employer is entitled to unilaterally change its terms. The limits of the change must, of course, be precisely specified in the contract and the employer must act within them. In this case, the unilateral change, even if it is harmful, is agreed upon. Therefore: legal -provided it does not conflict with a prohibitive provision of law. Also, of course, with in the provision of article 281 of the Civil Code regarding the abusive exercise of a right.

Therefore, when there is a unilateral (not agreed upon) detrimental change of working conditions by the employer, specific rights are recognized to the employee.

Specifically (the employee) is entitled to:

(a) Accept the change. In this case, it is considered that a new contract is concluded, amending the original one. This (new) contract is valid as long as it is not contrary to a prohibitive provision of law or morality, or

(b) To consider the change of terms by the employer as termination of their employment contract. In this case they are entitled to demand the payment of severance pay, which is provided in Law 2112/1920, or

(c) To insist on the respect of the contractual terms. At the same time, continue to offer their services in accordance with the working conditions before the change. In this case, if the employer does not accept the services offered by the employee, the employer becomes default and owes the wages outstanding.

Alternatively, the employee can provide their work under the new conditions and, at the same time, express their objection. And cumulatively, to go to court, asking that the employer will be obligated to employ them according to the conditions before the change.

However, the non-payment of wages beyond two months is not subject to the general provision that provides for the unilateral detrimental change of working conditions (: par. A of article 7 of law 2112/1920). The more specific provision of non-payment of accrued salaries as a unilateral detrimental change was deemed necessary (par. C of article n.2112 / 1920). The more specific legislative provision for the year 2017 was a consequence of the, admittedly, problematic attitude of the courts, namely the Supreme Court, regarding the issue of non-payment of accrued salaries.

The long-standing position of case law that created the need for legislative intervention

The position of the Supreme Court as to whether the non-payment of accrued salaries constitutes a unilateral detrimental change in working conditions has been long-standing. Its position, in principle, was negative. The Supreme Court acknowledged that “The mere non-payment of the employee’s accrued wages, even in the long run, is not sufficient to establish the notion of a detrimental change in the terms of their employment contract, unless it is linked to the employer’s intention to force them to resign in order to avoid payment of the severance pay to them.” (indicatively 677/2017 AP, 447/2015 AP, 381/2012 AP, 795/2007).

This settled case-law has been criticized by legal theory. The reason for the criticism is the employee’s difficulty in proving the employer’s deceit regarding forcing the former to resign. The deepest economic crisis (which has been affecting our country since 2009) has turned hardship into weakness. The liquidity problems was a given for the majority of businesses. The non-payment of salaries was clearly not without a reason. Sometimes employers paid small amounts (even for a long time), instead of the total salary due. They proved, in this way, that, in no case did they seek the resignation of the employee. The employee could not support that the employer was (fraudulently) forcing them to resign.

This case law has created problematic situations, which have affected not only employees. Often the impasse was detrimental to business as well.

Specifically:

For the employee:

The employee was trapped in an employment relationship which did not bring them the agreed compensation. Non-payment of wages was not considered a complaint by the employer. Unless they proved the latter’s intention to force them to resign. In practice, basically impossible.

In order for the employee to free themselves from their financially unprofitable employment relationship, they had to resign. The damage from this decision, however, was twofold:

(a) The resigning employee is not entitled to severance pay. That fact rendered the option of resignation problematic. Especially in the cases where employees had a significant length of service and thus were entitled to higher severance pay.

(b) Possible resignation of the employee, you would put them in a voluntary unemployment status. They would not, therefore, be entitled to receive the unemployment benefit from OAED either.

The employee, trapped by in above situation, often seemed forced to maintain a (problematic) employment relationship.

For the company:

The employee is, basically, considered the weak party in the employment relationship. They seem to be, the case of non-payment of accrued salaries not excluded, the only one negatively affected. However, during the economic crisis, there were many businesses that, because of it, lost the privilege of being the powerful on in the relationship. The long-standing position of the case law trapped these businesses in employment relationships that they did not want to continue. Despite the reduction in their activity, they continued to employ redundant staff, as they were unable to make legal dismissals. The validity of the dismissal depends on the full and timely payment of the legal dismissal compensation. But many of the businesses were unable to pay it. Therefore, they could not opt ​​for dismissals. They were looking forward to the resignation of the employee. When this did not come, the financial burden of the business was simply inflating;

The (first-timid) legislative intervention

The Supreme Court, despite the above, did not choose to change its case law. Its obsession with its long-standing position (: claim of existence of a fraudulent intent by the employer) with the issuance of its decision no. 677/2017, was the reason for the legislative intervention, following an amendment proposed by the Communist Party of Greece.

In Article 7 of Law 2112/1920, a third paragraph was added: “Also considered a unilateral detrimental change in working conditions is the significant delay in the payment of the employee’s accrued wages by the employer, regardless of the reason for the delay” (56 Law 4487 / 2017).

The choice of the legislative provision to presuppose a “significant” delay seemed, from the beginning, unfortunate. The reason was the ambiguity and interpretive issues it caused as a vague concept. Modifying it was a matter of time.

The (final) legislative intervention regarding detrimental change

Article 58 of Law 4635/2019 finalized the relevant intervention: “Also, the delay of more than two (2) months in the payment of accrued salaries of the employee by the employer, regardless of the reason for the delay, is considered a unilateral detrimental change of working conditions.”

The time limit for late payment of accrued salaries is intended to eliminate important interpretative issues. Already, a delay of more than two months in the payment of accrued salaries automatically constitutes a detrimental change in working conditions.

The retroactive (?) Application of article 58 of law 4635/2019

The issue that arises, after the above amendment since the entry into force of article 56 of law 4487/2017, is the possible retroactive application of article 58 of law 4635/2019. As noted in the explanatory memorandum of Law 4635/2019, for article 58, the term “significant” is vague, resulting in a question of interpretation and application of the provision and legal uncertainty, since it is solely up to the subjective judgment of the characterization or not, as “significant”, of the delay of payment of accrued salaries…. Therefore, the proposed regulation removes the legal uncertainty created by the indefinite term “significant”.

Based on its explanatory memorandum, Article 58 should be considered a true law of interpretation, in accordance with 77 of the Constitution. It therefore has retroactive effect. Therefore, in labor cases, the facts of which took place after 09.08.2017 (when the law 4487/2017 was published in the Official Gazette), the maximum time limit of two months of law 4635/ 2019 will apply.

The consequences of the (final) legislative treatment

Non-payment of accrued wages is now equated “by law” with a unilateral detrimental change in working conditions. The condition of proving the fraudulent expulsion of the resigning employee, in order to substantiate a unilateral detrimental change, no longer exists.

Consequences of a detrimental change in case of delay of due wages. The relevant conditions

The employee, as analyzed above, is entitled (inter alia) to consider the non-payment of their accrued wages as termination of their employment contract by the employer. In this case, they will be entitled to severance pay.

The reason for the delay in the payment of accrued salaries is irrelevant. The delay is considered a unilateral detrimental change, regardless of the reason it occurred.

Therefore, in order for the delay in the payment of due wages to be considered a detrimental change of working conditions, the following must take place (: par. C of article 7 of law 2112/1920-as in force):

(a) The delay in the payment of accrued remuneration, that is due and payable, which is not paid. (It should be noted that in the case of work retention there is no question of “accrued remuneration” – therefore there is no unilateral detrimental change in the working conditions of the employee who is exercising this right).

(b) The delay in the payment of accrued salaries exceeds two months.

The legislation of 2019 (article 58, law 4635/2019) solved an important problem. A problem that burdened employees and, ultimately, businesses. Non-payment of accrued wages for a period of more than two months is considered a unilateral detrimental change of working conditions with all the (deriving from it- as mentioned above) legal consequences.

It is therefore desirable for companies to take into account these legal consequences, in the event that they are either unable or would consider choosing not to pay accrued wages.

Our country has already entered a new recession. Possibly deeper than the one we experienced recently. Businesses face relevant challenges.

Experience, however, has already shown that the two-month period in question (in terms of non-payment of accrued wages) may prove to be extremely short.

And dangerous for businesses…

Stavros Koumentakis
Managing Partner

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.

Work on the sixth day of the week (: The five-day working week system)

The six-day working week system is one hundred and ten years old in our country. The equivalent of forty-hour and five-day working week system. What happens when the business’s needs may require work on the sixth day of the week (Saturday or Sunday)? Is such employment legal? And, in the affirmative, what regulations govern it? What are the business’s obligations and what are the risks?

Regarding the (distant) history

The limited, in a number of days, employment is a (very) old story: “Six days thou shalt labour, and shalt perform all thy work. But on the seventh day is the sabbath of the Lord thy God».

Saturday, according to Mosaic law and Jewish tradition, is a day dedicated to God, family and rest. Absolute abstinence from all kinds of work is required. Sunday is of similar importance for Christians, although the relevant restrictions are less important.

Sunday was established as a holiday, though not by all, by the government of Kyriakoulis Mavromichalis. The relevant law came into force on January 4, 1910.

These days have been of great importance in labor relations. They have been (and continue to be -as one would expect) a cause for controversy. Sometimes intense. In this context, Sunday was established as a holiday in Thessaloniki in the 1920s. The Jewish merchants on Saturday (of course) did not work. The obligatory Sunday holiday essentially imposed a five-day working week on them. There was no doubt that it was detrimental to their financial interests. Intensities and intense confrontations were, justifiably, to follow.

Nevertheless, the foundations of the six-day work week proved strong.

 The introduction of the five-day work week

The establishment of the five-day work week was not absolute. The General National Collective Employment Convention of 26.02.1975 established the five-day work week, the implemetation of which was left “at the discretion of the employer” (Article 6 §4).

The LD/29.12.1980 (ratified by Law 1157/1981), provided for the possibility of establishing the five-day employment system as mandatory, in accordance with the provisions of Law 3239/1955 (Article 2). That is, through Collective Employment Agreements and arbitration decisions (D.A.).

The distribution of working time and, in general, working time limits are particularly important issues. We have already addressed them in our previous articles. (Ed .: Organization of Working Time: Eight-Hours: An Old, Very Old, Story… and Organization of Working Time: A New Perspective, Free From Rigidities)

The five-day work week has ended up being identified with the five working days of the week. However, the weekly needs of businesses are not necessarily met in the five working days. Sometimes a sixth is required. This (sixth) day is usually Saturday.

Work on the sixth day, in the cases were the five-day work week system was applied, was not immediately regulated by law. As a result, various views have been formed on the provision of labor on that day. Particularly regarding the employee’s due remuneration.

Work on Saturday

Difference of opinion

Saturday is a day of mandatory rest when five-day work weeks apply. (Respectively so is any other day that is considered as the sixth day of employment.) This is a position on which everyone agreed/agrees.

However, there were disagreements regarding whether or not Saturday should be considered a business day and, in addition, whether or not to count it in the working hours of the other five working days:

The past

The non-prevailing view – Its rejection by the majority of case law

The majority of the legal theory supported the view that working hours on Saturday should be counted in the working hours of the other five workdays.

This view was based on the GNCEC of 26.02.1975. That’s because it envisioned the five-day work week – but without abolishing the six-day work week. In other words: it established the possibility of five-day work weeks without, at the same time, prohibiting work on the sixth day.

Saturday is different from Sunday, which is a mandatory holiday. In this context, Saturday is a day when it is possible, legally, to provide work, resulting in it being treated as such in terms of the remuneration offered as well.

According to the above view, it was correct for Saturday’s working hours to be counted in the working hours of the other five working days. Also in the calculation of the total weekly working time. Thus, working hours on Saturdays, as they were added to the working hours of the other five days, led to exceeding the contractual (or, as the case may be) legal hours. As a result, they was “overwork” or overtime – with the relevant, in each case, increases in the remuneration (which we mentioned in a previous article).

The prevailing view in jurisprudence and the need for intervention by the legislator.

The above view did not prevail in case law.

According to the prevailing view (indicatively: 268/2016 Court of Appeal of Piraeus), the work of an employee on Saturday, it being the sixth day in a five-day work week, does not constitute “overwork” or overtime. Unless it exceeds the daily work limit and only for the part of the possible excess. Even in cases where a court (of first or second instance) has considered it as such, the Supreme Court of Cassation has intervened.

Indicatively, with its decision no. 312/2010, the Supreme Court ruled: “With this ruling the Court of Appeal… that is, by accepting as valid in this case, based on an agreement, the six-day work week and subsequently, by classifying the employment of the appellants as illegal overtime during the ninth hour and by taking into account the working hours on Saturdays for the determination of overtime hours, it violated “provisions of substantive law”.

Thus, based on the held position of case law, the (voluntary or forced) employment on Saturdays is prohibited by public order rules. This is because it is a day of obligatory rest due to the exhaustion because of the five days of work. Therefore: null and void. Thus, such a null and void employment benefit does not give rise to an obligation to pay the due salary or the corresponding part of the salary. As a result, the employee’s claim is limited to the benefit the employer enjoyed from the provision of their invalid work. This claim is based on the principles and provisions of unjust enrichment-articles 904 et seq. of the Civil Code. The benefit, in this case, “consists in the remuneration that the employer would pay to another employee, who would be validly employed under the same conditions as the one who had been invalidly employed for the time mentioned above, without taking into account the latter’s personal circumstances. » (indicatively: 191/2011 SC).

This view, however, posed a problem. It significantly decreased the burden of the (illegally acting) employer. And also: at a cost free of the surpluses being added when the maximum working hours are exceeded.

This fact made the intervention of the legislator inevitable.

The present: The (seperate) regulation on work on the sixth day, despite the “five day work week” rule.

Resolving the difference of opinion

The above “dispute” tormented the Greek legal order for forty-five years. Only in 2010 did the legislator decide to address and resolve the problem.

The relevant provision (art. 8 of Law 3846/2010) stipulates that: “The work, provided on the sixth day of the week, in violation of the five-day work system, regardless of the penalties provided, shall be remunerated by the paid wage increased by 30%.” Those working in hotel and catering businesses were excluded from this regulation.

According to the specific legislative intervention, work on the 6th day in a five day work week is still illegal, as long as it is against a law or a provision of a Collective Employment Convention or of an Arbitration Award. It is therefore invalid. Therefore, it would be more appropriate to talk about “compensation” and not “remuneration” of the work provided under such circumstances (: 5618/2019 Court of Appeal of Athens).

In brief…

Until 10.5.2010, those who worked on Saturday were entitled to compensation based on the provisions for unjust enrichment. No increase was provided for.

Since 11.05.2010, those who work on Saturday (in cases where Saturday is the sixth day of the week), are entitled to a 30% increase in their salary (indicatively: 493/2019 Supreme Court, 46/2018 Court of Appeal of Thessaloniki, 456/2019 Court of Appeal of Larisa).

The criminal dimension

The five-day work week, as mentioned above, can be exclusively applied if such a restriction is introduced via a provision of a Collective Employment Convention or of an Arbitration Award. In case this restriction is violated, the penalties of article 21 of law 1876/1990 apply (“fine of at least 200,000 drachmas”).

The administrative dimension

The non-payment of the (increased by 30%) labor remuneration -for work provided  on the sixth day in violation of the restriction for the five day work week- imposes an administrative fine of € 800 per affected employee (MD 60201 / D7.1422 / 31.12.19, Government Gazette B ‘4997 / 31.12.19).

Work on Sunday as the sixth day of employment

In General

We have already mentioned that in the five-day work week the sixth day is usually Saturday. It is possible, of course, for it to be any other working day. Maybe Sunday too.

However, the provision of work on Sunday falls under a special provision. Both in the five-day employment and in the six-day week system.

Work provided on a Sunday did not rise corresponding differences of opinion as those of the work provided on a Saturday.

The Greek legislator dealt with work on Sundays, and other holidays, very early on. It quickly developed a separate regulation that is not addressing the working hours of other working days (see No. 8900/1946 JMC “regarding the determination of increased wages for employees in general on Sundays and holidays”, as JMC No. 25825/1951 interpreted art. 2 of law 435/1976 and art. 10 par. 1 of RD 748/1966).

In particular: Sunday as a compulsory holiday

As we already mentioned, Sunday is a compulsory holiday. Therefore, employment on this day is expressly prohibited. However, the law also provides for some exceptions to the above prohibition on certain types of work (Article 2 & 7 of RD 748/1966).

Working hours on Sundays are not counted in the hours of work provided on other days of the week. They are, therefore, not taken into account for determining any possible exceeding of the conventional or legal schedule and for determining any overwork or overtime. However, in the event of exceeding the legal daily schedule for Sunday (ie eight hours), those hours are overtime.

 The consideration of work on Sunday

Employment on Sunday (legal or illegal) is paid with a 75% surcharge. The surcharge is on top of the legal (not the one actually paid) hourly wage.

At the same time, in case the employment exceeds 5 hours, the employee is entitled to rest, lasting 24 consecutive hours, on another working day of “… the week which starts on Sunday”.

Depending on the way the employee is paid, their salary for their employment on Sunday is calculated as follows:

Daily Wage: Those who are paid a daily wage, regardless of the increase of 75% they receive, are entitled to a fee corresponding to the hours they worked on Sunday. This fee is independent of the provision or not of the rest day.

Salary: Those who are paid a salary are not entitled, in principle, to any remuneration other than the surcharge. The reason is that their remuneration for Sunday is included in their salary. Of course it is only included if they receive the compulsory 24-hour rest on another working day of the week following the Sunday in question.

Otherwise, the provision of work on all five (or six depending on the work system) working days of the following week is illegal for one of these days, because it conflicts with a public order provision (Article 10 §1 RD 748/1996). Therefore, the employer is obliged in this case to reimburse the employee for the benefit they gained from the employee’s work, based on the provisions of unjust enrichment. According to case law, this benefit amounts to 1/25 of the paid salary. That is, the amount that the employer would pay to the same employee if they worked on their day off, without this work increasing the overtime of other days and the ratio of leave and holiday allowances (Supreme Court 191/2011, 339/2011, 436/2010, 1117 / 2017).

The surcharge of 75% of the legal hourly wage is also paid in cases of employment during other mandatory holidays. However, there is no obligation to provide the relevant 24hour rest to the employee in these cases.

Regulations regarding work provided on Saturdays (and possibly on Sundays) could already be considered obsolete.

In times of recession, such as the current one, it is especially important to save jobs. Flexible forms of employment are a solution. Will they prove to be sufficient?

Most of the time, life is what shapes the need for legislation. The law rushes to catch up with it. Shaping the employment time is already a European reality. The regulation is ready to go.

Why didn’t we include the possibility of extending/arranging of working time on Saturday as well? Maybe on Sunday too? (But always respecting the limits set by European legislation).

Wouldn’t it be a tool for safeguarding and strengthening jobs?

A tool to strengthen businesses?

A tool to help national economy recover and develop?

The SURE program of the European Union and the “Cooperation” Program of our country have an end.

The search for more permanent solutions is the responsibility of every business and, of course, of the Greek government and the Greek legislator.

Let’s not leave things to chance…

Stavros Koumentakis
Managing Partner

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.

A very significant number of businesses in our country are in the field of catering. An important part of businesses operating in the field of tourism are catering establishments. Economic activity in our country has suffered a severe blow. Ans so have catering establishments. What happens regarding the reopening of these businesses immediately after the, still ongoing, pandemic? What obligations burden them? Dozens of questions regarding the “next” day. Let us take a closer look at the basics, taking into account recent legislation.

Which businesses constitute catering establishments?

“Catering establishments” are, among others, taverns, restaurants, nightclubs, dance clubs, clubs, patisseries, bars, cafes, etc.

How can they operate?

The opening hours of restaurants are, in most cases, defined by law. They may apply five-day or, as the case may be, six-day work weeks.

Work on Sundays can legally be provided to catering businesses. In these cases, a legal increase of 75% is provided on top of the legal minimum daily wage.

The work schedule (in other words: the alternation of working days and hours – the so-called “per diems“) is usually drawn up on a weekly or monthly basis. This is done, as a rule, by exercising the “managerial right” of the employer. Depending on the needs and choices of each business.

The choices of work schedules vary. Indicative: (a) Part-time (less, ie, “per diems” per week), (c) Rotational Work (with a reference period per week or per month), (d) Part-time with few working hours per day, (e) Alternation of full-time and part-time employment and so on.

Is a catering establishment obliged not to make redundancies after its reopening? Is it entitled to reduce the salaries and working days of its employees?

Businesses in the catering sector are (also) entitled to extend the suspension of their employment contracts for the month of May (the same will probably apply for June). In this case they will not be entitled to lay off their staff – for the entire period of the suspension. They will also be required to maintain the same number of jobs for another 45 days (after the expiry of the suspension period) – with the same type of employment contracts. It will be possible, ie, to dismiss an employee but someone else will have to be hired in their place – with the same type of contract (full-time, part-time, etc.).

However, in the event that such a business does not extend the suspension of employment contracts, it is not burdened with the specific obligations. It is therefore entitled to make redundancies and, under certain conditions, to reduce the working hours and days of its employees. That is, the general provisions of labor law apply.

What happens to the resignations of employees when there is an obligation to maintain jobs?

This phenomenon seems common in this area. Resignations are excluded from the job retention obligation clause. As long as their resignations are truly voluntary.

However, there are two more exceptions to the job retention obligation clause. These are the cases of retirements and of expirations of fixed-term employment contracts.

In the event that a company “does not make it”, what is the fate of the redundancies?

This question is very important and of wider interest.

In order for a dismissal to be legal and valid, the payment of severance pay is required. Even when a business closes because, as they say, it “did not make it”.

However, compensation for dismissal is not due in the event of force majeure (if, for example, a business is destroyed by an earthquake). Thus, if the pandemic (which could lead to the closure of a business) is assessed as a “force majeure event”, no severance pay will be due.

We wait with eager anticipation the first court decisions on this issue.

Do changes in licenses, ownership or a possible transfer of business affect employment relationships?

Changing the subject-matter of a store (from a club, for example, to a cafe), changing the share ownership scheme or the “boss” has no impact.

Especially regarding the change of employer, we must stress that: The one who succeeds or replaces a certain employer in a company, enters (as a rule) in the position of the (initial) employer, in terms of the obligations deriving from employment relationships.

What about special purpose remuneration for employees in this industry?

The employees of businesses that reopen, will receive the special purpose remuneration depending on the days that their employment contracts are suspended in the month of May, calculating on the total sum of 534€ (18€ rounded up / day).

For the period of the extension of the suspension of the employment contract lasting 24 days (01.05.20 – 24.05.20) until the reopening of the catering establishments on 25.05.20, the employees will receive 432 €.

What are the most important among the recent prime ministerial announcements regarding, among others, businesses in the field of catering and tourism?

Particularly important are those concerning the retention of jobs and the remuneration of employees. In particular, efforts are being made to maintain jobs while facilitating business. “Businesses that… face lower demand will be able, until the end of October, to adjust the working hours of their employees accordingly.” Reduced working time, however, will not mean (respectively) reduced wages. These employees will continue to receive, according to the Prime Minister, almost the same salary. Also: their insurance contributions will be fully covered. The COOPERATION program will be used, which will be funded by the European SURE program.

Other important provisions are:

(a) The reduction of VAT from 24% to 13% for the next 5 months on all tickets in the means of transport.

(b) The reduction of the tax advance.

(c) The reduction of VAT on coffee products and non-alcoholic beverages.

(d) The extension of the rent reduction by 40% for the whole summer.

(e) The announcement of domestic tourism support programs for the disadvantaged citizens.

(f) The gradual reopening, from 01.07.20 on, of direct flights abroad to tourist destinations, following sampling tests and compliance with health protocols.

An important part of the business activity in our country is associated with the catering industry. There is a great number of businesses in that field. But the number of employees in them is even greater. The recent legislative measures (also, of course, the recent prime ministerial announcements) highlight the absolutely necessary care the state must take for the survival of these businesses (among others). In order to also save the jobs they offer.

And this seems perfectly normal: The recovery of the Greek economy can only be achieved if this specific sector is taken very much into account.

The majority of catering businesses are small in size. The legal and other problems they are called upon to manage, however, do not differ from the ones the larger and / or very large businesses in the same industry face. It is therefore necessary for them to manage them in spite of the costs that they, inevitably, entail.

After all, one thing is certain: careful management of a business’s problems is a necessary condition for both its survival and longevity.-

Stavros Koumentakis
Managing Partner

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.

Employment time has always had a special value in labor relations. An intense request for the regulation to be introduced on working time seemed reasonable 134 years ago. The request made was to limit work to only eight hours per twenty-four hours. As time passed, the care of the European and national legislation for the regulation of the employee’s working and resting time seems self-evident. The relevant issues that arise (legal and conventional working hours, overtime, “overwork”, prohibition of offsetting working hours, etc.) have already occupied us in our previous article [: ” Organization of working time (eight hours: an old, very old, story …)]. That is where the rigidities and distortions of the provisions currently in place in our country today emerged. First of all: the inability to cope with the upcoming, and in the current circumstances unbearable, wave of unemployment. And, in addition, the need for a new rigidity-free perspective…

The equation to be solved and its variables…

Managing the ongoing economic crisis and recession is the main goal. The (possibility) of focusing exclusively on business survival is unreasonable. The intractable equation of rescuing (the maximum possible number) of jobs should also be taken into account.

The equation would prove even more intractable if we added one more variable: employee satisfaction. After all, what good would it do to save jobs in an unfavorable environment for employees? In a work environment similar to that in Chicago in 1886?

We tend to ignore the first quarter of the 21st century. The parameter of employee satisfaction leads (our valuable associates and friends HR managers would tell us) to the increase of the degree of commitment to the business. And, of course, in higher quality and quantity performance.

However, we must not overlook the impact of work on the personal lives of employees. After all: “When work is a pleasure, life is a joy. When work is a duty, life is slavery “(Alexei Maximovich Peshkov, better known as Maxim Gorky, 1868-1936).

In our article mentioned above, we saw that the flexibility in the organization of work presupposes the possibility of offsetting working hours of different days, weeks or months. And, in fact, without increasing salary costs. Based on the changing needs of the business and (why not?) the wishes & needs of employees.

It would be useful, in the present circumstances, to further explore the advantages and disadvantages of a modern, more flexible and, above all, well-structured employment time management system. In addition, to gain some experience from the organization of working time happening within the European Union. What is particularly important during the current situation is to help businesses survive and save jobs. And, in order to be practical, it is necessary to introduce a scheme where both the employer and the employee are satisfied by the employment time management system in place.

Let us start with the example of Cyprus. It looks typical.

The example of Cyprus

The organization of working time in Cyprus is regulated by the Law on the Organization of Working Time of 2002. The system adopted there (Article 7) is very simple and has the following pillars:

(a) weekly working time may not exceed 48 hours on average, including overtime. More favorable arrangements for employees prevail.

(b) In calculating the average, paid annual leave periods and sick leave periods are not taken into account or are neutral.

(c) The reference period is four months.

(d) The above provisions do not apply when the employee does not consent to the provision of this type of work and, in addition, there is no consequence if they do not agree to perform this work,

In other words: The employer and the employee can agree on what they want within a very broad framework (subject to, in principle, the provisions on the health and safety of employees but also any more favorable arrangements).

The framework described immediately above provides for flexible forms of employment. Among them:

“Flexible Working Hours: The employees decide for themselves on the time of their arrival and departure each day within certain frameworks determined by the employer but covering a basic core of working hours. The flexibility framework should not be less than one (1) hour.

Individual Work Time Accounts: The Working Time of each employee is kept in total on a time basis (annual, semi-annual, quarterly, etc.) and there is a possibility of distribution- “consumption” according to the needs of the business or the wishes of the employee, so that periods of leave and / or part-time work, for which no salary reduction is provided for, alternate.

Compressed work week: The employee can work their total weekly hours in less days”.

Advantages and disadvantages of a well-structured time management system

Generally

By adopting a well-structured system of managing working time, like the one that applies in Cyprus but also in other European countries (Germany, for example), a number of advantages, some of which we will mention, are enjoyed. Those advantages are enjoyed by businesses, employees, society as a whole and the national economy.

The advantages

As for the business

The business manages its staff more effectively – based on its real (sometimes seasonal) needs.

The business meets its changing needs without the (significant) additional financial burden of overtime and overwork. This way, its inelastic (salary) costs are reduced.

The business is not discouraged by having to retain jobs entailing completely inelastic obligations.

As for the employees

The employee enjoys (significant) freedom in managing their working time. Their ability to manage their free time increases their level of satisfaction, promotes welfare and has a beneficial effect on their physical and mental health. The employee maintains the ability to organize their working time, according to their own needs.

Moreover, their arrangement of working time, based on their own needs and desires, will undoubtedly have a positive effect on their qualitative and quantitative performance.

An employee who has special (personal, family or other) responsibilities increases the chances of finding the right job for them.

Relaxation in arranging working time reduces travel times (when there is no teleworking regime) as it makes sense to avoid rush hour travel.

In terms of society as a whole and the economy

Employment opportunities and conditions for reducing unemployment are expanding.

The conditions are created for concluding flexible forms of employment-benefits for the business and the employee.

The configuration of the employee’s free time will logically have a positive effect on the increase in consumption. The increase in consumption will logically have a positive effect on reducing unemployment and, consequently, on GDP growth.

The (absolutely) flexible arrangement of working time has a positive effect on the environment and the economy. Most importantly: In saving valuable jobs in the current environment and, of course, business survival.

Disadvantages

Indeed, one should make an effort to identify disadvantages in a system of managing employment time. One of them could (possibly) be the reduction in the income of employees who will be called to work overtime. But this, in the end, is debatable…

The institution of arranging working time in our country

We always manage to turn a simple situation into a complex one. Feeding, among other things, the monster of over-regulation. By offering, of course, work to our lawyers and to the courts. But not by helping entrepreneurship and the economy grow. In contrast to the pre-described system of Cyprus, let us take an (absolutely concise) look at the only current relevant provision in our country. An absolutely distorted arrangement and therefore, in practice, a complete failure.

The provision of article 42 of law 3986/2011 provides for two systems of arrangement of employment time. They both concern businesses with a conventional weekly working time of 40 hours.

The first work system: Provides for the possibility of providing additional working hours for a specific period (: increased employment) and subtracting them, respectively, from the working hours of another period (: reduced employment). The total time of periods of increased and decreased employment may not exceed a total of 6 months in a period of 12 months (article 42 §1 par. A).

The second work system: Accepts as possible the distribution of 256 working hours within a calendar year in periods of increased work that cannot exceed 32 weeks per year. During the remaining period of the year, reduced working hours are provided for -in relation to the maximum legal working time limits (article 42 §2 par. A).

Employment during periods of increased employment may not exceed (in both systems mentioned above) ten hours per day. In addition, during the reference period (6 months or one calendar year respectively) may not exceed per week – on average:

 (a) 40 hours (excluding overwork and legal overtime) and

 (b) 48 hours (including overwork and legal overtime)

The arrangement of working time cannot be agreed upon with the agreement of an employed employer. It necessarily presupposes an operational NCEC. Alternatively, an agreement between the employer and a trade union or employees’ union or association of persons of their business (in more detail: article 42 §6).

In other words: Regardless of the complexity of the regulation (even to understand it, one still needs legal advice), we come to a conclusion of a fact that lacks of seriousness: If there is no trade union in a business, it is not possible to apply a time management system(!!!)

The coronavirus and the “wisdom” it bequeathed to us (?)

The coronavirus offered us, without a doubt, experience. And (possibly-in some cases) some, minimal, wisdom.

It proved, in the clearest way, that the (strict) eight-hour weeks is not the only way for the effective operation of a business (let us accept the exceptions – the businesses of continuous operation, for example).

It also proved that eight hours may not be the best choice for employees.

And even more: It forced us to adapt immediately to the new data. It helped us to look elsewhere – in searching for the optimal management of situations new to us.

It made us care more about human life. Health. Business survival. Saving jobs.

The measures introduced, however, are gradually being lifted. What will happen to the businesses that will not survive? And those that are on the verge? What will happen to the jobs that are lost and those that are difficult to save?

Can we take action to prevent the impending disaster? And, if so, what actions should be taken?

The “constant” and the need NOT to reinvent the wheel

What is the constant that we do not need / can / want to change: the weekly working limits (40 hours, for example, in a five-day work week and 45 hours in a six-day work week) and what the European Legislation requires.

What can we do to improve the situation?

Help businesses and growth?

Make employees happier?

Reduce unemployment?

It does not seem, really, necessary to (rediscover) the wheel!

We can easily (?) Adopt three alternatives:

Alternative I: Inaction – we leave things as they are…

This is the safest option in the direction of not causing, in the first phase, any reaction. At least at the beginning. As time will go by, and hundreds of businesses will shut down, we will complain (and blame each other) for the phenomenon.

Alternative II: Intervention in the already existing institution of working time arrangement

We can intervene in the existing (pre-described) institution of the regulation of working time (article 42 of law 3986/2011):

• Allowing the possibility of an individual agreement between employer and employee.
• Offering them the possibility for a daily schedule of up to eleven (instead of ten) hours of employment.
• Maintaining, as it were, the other provisions.

And finally,

Alternative III: Adopting a very simple system

 The core

Gaining knowledge from the existing systems in place in other countries of the European Union (including: Cyprus and Germany) to create a, new, corresponding – absolutely simple system.

This system can be based on the institution we would describe above as a “basket of working hours” or, alternatively, an “individual employee hours account”. Relevant to the standards set by other countries, ie those in Cyprus (and/or Germany-among others). One or two verses at most would be enough in a relevant regulation:

“The working time of each employee is observed on a total time basis – reference period (annual, semi-annual, quarterly, etc.) and there is a possibility of distribution -” consumption “according to the needs of the business or the wishes of the employee, so that periods of intensive employment provision alternate with periods of leave and / or part-time work, for which no fluctuation of remuneration is provided”.

And it would be useful, if we are not afraid (which we should not be) of reactions, distortions or rigidities, to add the following dimension:

“The employee and the employer are entitled to agree (instead of remuneration for the overtime of the employee – if the work provided is not covered by their salary or instead of their overtime pay) that the employee will receive (additional) reduction of working hours, corresponding rest days (days off) or a combination of reduced working hours and rest days (days off) “.

The (unnecessary and problematic) details…

It is true that we are accustomed to highly complex and unnecessarily detailed regulations — even when they prove to be completely ineffective. It’s time to try to simplify. In any case, if such an arrangement (like the one mentioned above) seemed, to some, alarmingly simple, we could add:

 (a) Possibility of an agreement between the employer and the employee regarding increased working hours in periods when the business has increased needs, up to eleven (or, under certain conditions, up to thirteen) hours per day (without differentiation in the agreed salary of the latter).

(b) Possibility of an agreement between the employer and the employee regarding reduced working hours (and / or fewer working days) in periods when the business has fewer needs and / or regarding the employee’s obligation to complete the total agreed-due working hours (without differentiation in the agreed salary of the latter):

• (in the case, for example, where the employee works ten hours a day for four days a week it is possible to agree not to work on the fifth day),

(c) Possibility of an agreement between the employer and the employee to “transfer” working hours from one working week to the next – until the end of the reference period (subject to the consent of the employer).

(d) Maintaining the current existing legal (or contractual) weekly schedule (eg 40 hours per five-day week) and requiring the employee to work during the reference period per week-on average, in accordance with the above existing legal ( or conventional) weekly schedule.

(e) Payment for the entire reference period of a salary equal to the agreed (eg for 40 hours of work) without variation either during the period of increased employment or during the period of reduced employment.

The next day…

..it will be difficult – we all know that.

And on the other hand: 1886 has begun to fade in the mists of the past.

The needs and desires of today’s employees are not equivalent to those of their colleagues of that time. Neither are the businesses’.

Determining the time of employment is very important. It is also important that the life, health and safety of the employee continue to be put before the needs of the business. It is important to see the degree of employee satisfaction but also the commitment to the business (which comes after, as a consequence).

However, it is important to turn our attention to the long-suffering business. The one that is already struggling to survive in the midst of a global crisis. The one that (uninterruptedly will continue to) struggle to stop the intensity of the recession.

Flexible forms of employment (as they formed in the light of the pandemic and have already occupied us) are an absolutely necessary, and not just useful, relevant tool.

But let’s move on to the next step:

Would it be bad to recognize margins of flexibility in the organization of working time (with full respect for European directives on working and rest time)? A flexibility that can meet the needs of businesses and employees? A flexibility that will, under the current circumstances, prove valuable for business survival and savings jobs? A (proven) flexibility that, in the end, will make employees and entrepreneurs happy?

Is it really time to try it?

Will the stakes, otherwise, be unexpectedly high?

Stavros Koumentakis
Managing Partner

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 ongoing pandemic has created new important data – on a global scale. The protection of life and health, the survival of businesses, the safeguarding of jobs were (and rightly so) the object of state concern. The “next” day requires braver decisions. Saving national economies (and jobs) does not seem like a simple matter. Obviously, the ban on layoffs or compulsory employment is not a solution. Unemployment is expected to hit our country hard. Are there tools suitable for dealing with it? Could the organization of working time be one of them?

Does the (134-year-old, then reasonable) claim for “eight hours of work, eight hours of rest, eight hours of sleep” seem (especially under the present circumstances) completely obsolete?

Let’s take a look at the data.

Working time: Eight hours of work and flexible forms of employment

In our recent article on flexible forms of employment, we recorded the use of some of them as a tool for crisis and recession management. The transition from fixed working hours seems, under the current circumstances, another (important) tool in the relevant toolbox.

The time difference in the employment contract is, without a doubt, significant. One would say sacred. Working time is, as a rule, linked to the compensation of labor itself: the salary.

Working hours are inextricably linked to protecting the lives, health and safety of employees. Its multidimensional importance, after all, was the reason why the regulation on the maximum permissible working time limits is met in the first pieces of labor law legislation.

The maximum time limits are determined on a daily and / or weekly basis (daily or weekly schedule-respectively). Going beyond them, above certain limits, is not tolerated. Regardless, in fact, of a possible relevant remuneration or the consent of the employee.

The European Union’s guidelines on working hours

The European Union has chosen to establish, through the Directives, some basic rules for the organization of working time.

Directive 93/104 has provided for the provision of minimum daily, weekly and annual rest periods. Also, for appropriate breaks as well as for the introduction of maximum weekly employment (Rev. Recital 19). It was succeeded by Directive 2000/34.

The 2003/88 Directive in force today, among other things, codified the two previous Directives. It is basically regulated the (minimum) rest the employee must enjoy. Specifically:

With a reference period of twenty-four hours: Each employee must have at their disposal (every 24 hours) a minimum of eleven consecutive hours of rest (Article 3).

With a reference period per week: Each employee should have, every 7 days, a minimum continuous rest period of twenty-four hours. At this specific 24 hours, the eleven hours of (minimum) daily rest are added (Article 5 §1).

This Directive provides for minimum daily rest time limits (: 11 hours). The maximum daily working hours are deduced. Therefore, the daily working hours cannot be more than thirteen.

In contrast, the Directive in question has chosen to regulate directly (and not by contrary inference) the maximum weekly duration of work. It specified, in particular, that in a period of seven (7) days, the working time may not exceed, on average, 48 hours (overtime included).

The omission of an explicit regulation of the daily working hours is not a choice made at random. The goal is to offer flexibility (: Recital 15). And even further: the acceptance of some, potential, deviations (Articles 17 to 22). Prerequisite: the provision for compensatory leave for employees (: Recital 16).

Our country has probably conservatively utilized the above possibilities – especially in comparison with other European countries (eg Germany, Cyprus, England). Conservative utilization which ends up bringing no value. To none: neither employees nor businesses.

The regulation of working time at the national level

The legal working hours

In our country, the working hours of employees are determined by special provisions. Provisions of public order.

In other words, it is acceptable only to limit the maximum (provided by law) working time – by individual or collective labor contracts, by arbitration decision or other normative acts. However, it is forbidden to exceed it without observing what the law provides for overtime employment (indicatively: 288/2018 of the Supreme Court).

The maximum working hours are calculated, basically, with a reference period per day (daily schedule). The weekly schedule is calculated based on the corresponding daily schedule.

In the minds of most people, the maximum daily schedule is intertwined with 8 hours. And that should be it! (in the first place).

One hundred years ago, in 1920, Law 2269/1920 was passed. The law provided that working hours in industrial enterprises may not exceed eight per day and forty-eight per week. The 48 working hours were reintroduced with Law 3385/2000 -despite the intermediate reductions. The 8-hour period was gradually extended to employees in other sectors.

The above time limits, however, apply to companies that apply six-day weeks.

With the of 26.02.1975 General National Collective Employment Convention, the five-day work week was regulated. Under this system, the maximum legal daily working hours were set at 9, while the maximum weekly working hours was set at 45 hours.

Agreed upon working hours

The agreed upon working schedule is defined (rather unfortunately) as the schedule determined by collective labor agreements and arbitration decisions. This (most likely) to distinguish it from the legal one (as analyzed above). The conventional schedule was the means of reducing the weekly schedule – without the corresponding reduction in the monthly salary. With the General National Collective Employment Convention of 14.02.1984, the weekly schedule was limited to 40 hours per week without a corresponding reduction of the legal salary.

The legal and agreed upon working hours are the ones that delimit the time limits of “overwork” and overtime. In more detail:

“Overwork”

Overwork provided for by law

Institutional overwork is calculated on a weekly basis. It is the employment time that exceeds the conventional schedule but not the maximum legal one.

In businesses where the five-day and 40-hour week is applied, the employee may be employed five (5) extra hours per week – at the discretion of the employer. These hours are “overwork” (translation from Greek, there is no English term).

Businesses which apply the six-day work week system, (institutionalized) overwork is the hours beyond the conventional schedule (40 hours) and up to the legal (48 hours) per week (article 1 §1 of law 3385/2005-as amended from article 74 §10 of law 3863/2010).

The compensation for institutionalized overwork is the hourly wage increased by 20%.

The (simple) overwork

(Simple) overwork is something different. It refers to those cases where the (agreed) weekly schedule falls short of the conventional one. If, for example, a weekly schedule of thirty-five hours has been agreed, the difference of up to forty hours (the conventional schedule) is a simple overwork. Simple overwork basically requires the consent of the employee.

The compensation for simple overwork is the regular hourly wage. It is not subject to surcharges.

Overtime

Overtime is work that exceeds the conventional and legal schedule.

On a weekly basis: Over 45 hours in five-day work systems and 48 hours in six-day work systems (Article 1 § 2 of Law 3385/2005).

On a daily basis: Exceeding the legal daily working hours – even when the legal weekly maximum is not exceeded.

The compensation for overtime is the hourly wage increased by 40% for the first 120 hours of overtime per year and, beyond the 120, the hourly wage increased by 60%.

In cases where the legal conditions for the application of overtime have not been met, the surcharge is set at 80% (Article 1 §§3, 4 and 5 of Law 3385/2005). And this regardless of the other (not negligible) administrative and criminal sanctions.

Prohibition of offsetting working hours: the rule and derogations.

The rule: Working hours exceeding the maximum legal daily or weekly hours cannot be offset by corresponding hours of employment remaining below the maximum legal working hours of another day or week.

Overtime seems to give some, in essence, flexibility to the organization of working time. (But only apparently so – it precludes the possibility of offsetting working hours of more days – much less weeks).

True flexibility in the organization time of work would require the possibility of offsetting hours of employment with different days, weeks or months. No increased salary costs. Based on the (possibly) changing needs of the business. Possibly the desire & needs of employees.

The deviations? Minimum!

They are found, for example, in businesses of continuous operation (see our relevant article). Also, in businesses (non-continuous operation but) with alternating shifts (article 14 §2.3. A΄ PD 88/1999).

The needs have proven to be broader than deviations. The latter, moreover, do not address the rigidity of legal working hours. Nor the increased wage costs of overtime.

These needs led to the (failed – in practice) institution of working time settlement. The legal, ie, offset of working hours.

The institution of the settlement of working time (the deviations of Law 3986/2011)

The institution of arranging total working time is a widespread practice of organizing working time at European level (as well).

Simply put: In periods of increased employment, work is provided that exceeds the legal time limits. In other periods, the working hours are, respectively, reduced. Periodic changes in employment (and, ultimately, offset of working hours) do not fluctuate the compensation of the employee.

Such an arrangement does not exist in overtime. This is because (only) the employee’s employment time increases and so does (respectively) the company’s salary costs.

The provision of article 42 of law 3986/2011 is in force today. It provides for two relatively different systems. Both can be applied by companies that apply the conventional 40-hour weekly working hours.

The first system of work: Provides for the possibility of providing additional working hours for a specific period (: increased employment) and their deduction, respectively, from the working hours of another period (: reduced employment). The period of increased and reduced employment periods may not exceed a total of 6 months over a period of 12 months (Article 42 § 1 par. A).

The second system of work: Accepts as possible the distribution of 256 working hours within a calendar year in periods of increased work that cannot exceed 32 weeks per year. During the rest of the year, work is provided respectively reduced in relation to the maximum legal working hours (Article 42 §2 par. A).

In both systems, there are identical restrictions:

Employment during periods of increased employment is not allowed to exceed ten hours per day. In addition, per week-on average:

 (a) 40 hours (without any overwork and legal overtime) and

 (b) 48 hours (along with any overwork and legal overtime)

The settlement of working time in one of the above-mentioned ways presupposes a Business General Collective Employment Convention. Alternatively, an agreement between the employer and a trade union organization or an employee’s council or association of persons of their business (in more detail: Article 42 §6).

In other words:

Arranging employment time is not an employer’s right.

Unfortunately, it is not a matter of agreement with one or more employees.

And even more: even when the above conditions are met, the employee is entitled, at times, to refuse the above arrangement of their employment time.

Stiffness and distortion …

The importance of flexibility in labor relations, especially in times of crisis (and not only), is undeniable. Attempts to minimize (the expected to skyrocket) unemployment requires an national mobilization.

As we mentioned in quotes (but also in our previous articles), flexible forms of employment are an important tool for business survival and for saving jobs.

However, the institution of employment time regulation (as described above) creates rigidity and distortion. And one wonders, reasonably:

Why is it necessary for a trade union to exist in a business?

Why not be able to arrange the working time by an individual agreement of each employee – depending on their own, personal, needs and capabilities?

Why should this arrangement need to be put in a suffocating context – if the needs (and desires) of the bysiness and / or the employee are different?

Why should overtime be paid for when an employee prefers to receive a leave or a combination of pay and leave instead of pay?

Eight hundred thousand are, by the most modest estimates, the businesses affected by the pandemic (not counting the 700,000 freelancers, self-employed & small businesses). One million seven hundred thousand are their employees (: 8 out of 10 of the total workforce).

Very soon (necessarily temporary) measures to protect jobs will end. The institutionalization of the ban on layoffs in affected businesses will not be a solution, of course. Such a regulation can only be applied by different regimes – and in different times.

The European Union has provided appropriate tools. In our country they have not been sufficiently utilized. Our national policy and legislation seem to be inspired by the rigidity and entanglements of the past.

It’s time to make dissensions and adopt measures– even temporary ones. At least until the day-to-day beast of unemployment is tame.

1886 has begun to disappear in the past.

Would it be bad to recognize flexibility in organizing working time? A flexibility that will help businesses survive and save valuable jobs?

Is it time to try it?

(Or should we, persistently, stuck to the eight-hour day?)

Stavros Koumentakis
Managing Partner

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 process of returning to a functioning labor market continues with the issuance of the JMD no. 17788/346/8.5.20. The specific JMD is issued by virtue of 1.5.20 Legislative Decree (Government Gazette t. A ’90 / 01.05.2020), which touched, among other things, upon labor relations.

We have analyzed this specific Legislative Decree in our previous article (Covid-19 and Cooperation Program: The long way back to “normalcy”).

It’s time to look into, in addition to what we mentioned in this previous article, the details of its implementation.

The categories of companies under this particular CMO are two:

A. Those that will not reopen, by order of the Public Authority, during the month of May 2020 and

B. Those which have been classified as affected and have suspended the employment contracts of part or all of their staff. Also, those that reopen after the removal of their suspension by order of the Public Authority.

More details on the individual categories of businesses (and in addition to what we mentioned in our previous article):

A. Companies that will not reopen by order of a public authority during the month of May 2020.

Question 1: Are these businesses entitled to make redundancies?

NO.

There is an explicit prohibition to terminate the employment contracts of their staff for as long as the suspension of their activity is maintained by order of a Public Authority. This provision is rather unnecessary as the relevant prohibition had already been imposed by article 11 par. 1 of the of 20.3.2020 Legislative Decree.

Question 2: What is the amount of special purpose remuneration that employees who continue to be suspended (currently) during May are entitled to? By what procedure and in what time will they receive it?

The special purpose remuneration for the specific employees is of the amount of € 534 for the month of May 2020.

Their businesses-employers must submit relevant Official Declarations on the ERGANI platform from 18.5.20 till 31.5.20. They are obliged to notify their Employees of these Official Declarations.

No (re)submission of a Declaration is required from these employees. However, they will submit them when, as an exception, they choose to modify the details of their bank account or the details of the renting of their home. In this case, they will have to submit the relevant Declaration from 19.5 to 1.6.20.

The payment of the special purpose remuneration for May will take place from 5.6 to 10.6.20

B. Businesses that are affected and have suspended the employment contracts of part or all of their staff as well as businesses that reopen after the suspension of their operation by order of the Public Authority

Question 3: How many employees’ suspension can be extended for the month of May?

The rule: 60% of those already in suspension- maximum.

The exception: A number of businesses, depending on the NACE Revision 2 classification of their business activity, (as those are set out in an Annex to the above CMO) are excluded, which may extend the suspension of employment contracts for a larger percentage of employees.

Note (1): If the business has only one employee whose contract has been suspended, then it is permissible to extend their suspension.

Note (2): If the calculation of the above percentage of 60% results in a decimal number equal to or greater than 0.5, the number is rounded up.

Question 4: Can the employer suspend an employee in May who has not yet been suspended?

NO.

The rule: Employers cannot suspend work contracts that have not been suspended until 10/5.

The exception: Businesses that have with a no. 86.10 NACE Revision 2 classification (: Hospital Activities)

Question 5: Is the employer obliged to extend at the same time the suspension of all the employment contracts of their staff?

NO.

Extension of the suspension can be applied gradually. Also for a different number of employees each time.

Note: The time of extension of the suspension depends on the time that each suspension expires.

Question 6: What (important) obligation is borne by businesses that extend the suspension of their employment contracts?

The obligation to maintain jobs and employment contracts: Businesses that extend the suspension of employment contracts to 31.5.20 have the obligation to maintain for 45 more days (after the end of the suspension) the same number of jobs. At the same time, they are required to maintain the same type of employment contract (full-time, part-time or rotational work).

Important: The “same number of jobs” do not include resignations, retirees and employees with fixed-term employment contracts which expire within the above 45 days.

The new provisions introduced: The above obligation results in a differentiation in relation to what the previous CMO [12998/232 / 23-3-2020 CMO (Government Gazette B ‘1078 / 28-3-2020)] determined, for the same issue, with regard to businesses suspending employment contracts. The specific CMO stipulated that the obligation to maintain the same number of jobs means (article 1 par. 5): “the same employees and with the same working conditions…”). Therefore, a comparison of the two provisions (of the above, of 23.3.20 CMO and of the recent, of 8.5.20, CMO) shows that the businesses that will choose to extend the suspension of the employment contracts of their employees for the month of May (unlike businesses that do not choose to extend the suspension):

(a) will not be obliged to retain the same employees but only the same number of employees and

(b) they will not be required to maintain in general the same terms of employment contracts but only the same type of employment contracts (full-time, part-time or rotational).

In other words, the following paradox arises: businesses that do not choose to extend their employees’ employment contracts for the month of May are in a more unfavorable legal position than those who choose such an extension (!).

Question 7: Is the possibility of extending the suspension also valid for fixed-term employment contracts?

YES.

It is possible to extend the suspension of fixed-term employment contracts.

Note: After the expiration of the extension period, the contract continues for the agreed time remaining.

Question 8: Is it possible to permanently revoke the suspension of employment contracts? And under what conditions?

Content of the possibility: The specific businesses are entitled to proceed with a final revocation of the suspension of at least 40% of the contracts of the employees who have been suspended.

Businesses offered the oprion: Those reopening in May by public order. Also, those affected, depending on the NACE Revision 2 classification of their business activity, that had suspended part or all of the contracts of their employees (but not those for which the suspension of operation continues by order of public authority).

Businesses exempted: Those that, depending on the NACE Revision 2 classification of their business activity, are mentioned in the Annex of the above CMO. These businesses are entitled to revoke the suspension at a rate of less than 40%.

IMPORTANT: For those employees whose suspension of employment contracts is revoked, the measures of the Safe Operation Personnel and the Transfer of Personnel to Companies of the same Group can be applied (articles 9 and 10 of 20.3.2020 Legislative Decree)

It is noted that, as far as the measure of the Safe Operation Personnel is concerned, for the calculation of the required 50% of the personnel of the business, the number of employees whose suspension of their employment contracts has been revoked is taken into account.

Question 9: How is the amount of special purpose remuneration paid to employees whose suspension is extended for the month of May 2020 calculated?

These employees are entitled to special purpose remuneration in proportion to the days of extension of the suspension of their contracts (€ 534 for 30 days).

Question 10: Until when should the Businesses submit the Official Declarations for the receipt of the special purpose remuneration from their employees?

The above businesses are obliged to submit their Official Declarations from 1.6.20 to 7.6.20 to the ERGANI platform with the necessary data for the receipt of the special purpose remuneration by their employees, whose suspension is extended. The businesses are obliged to notify their employees for the submission of said Official Declarations.

No (re) submission of any Official Declaration is required from these employees. However, they will submit one when, as an exception, they choose to modify the details of their bank account or the details of the rental of their home.

The payment of the special purpose remuneration will take place from 10.6 to 12.6.20.

In the article mentioned in the introduction of the present, we pointed out that the 1.5.20 Legislative Decree announced (inaccurately) the return to “social and economic normalcy”. The Common Ministrerial Order, delegated by the CMO, approaches the whole issue with more realism. It aims, as stated, to “gradually reopen the labor market.”

And it is true, indeed, that it is moving in the right direction.

Unemployment, however, is unlikely to be stopped by such measures. New, more drastic ones need to be taken. Assisting flexible forms of employment and arranging working hours seem like a one-way street.

Let’s follow the developments.

But it is important that we do not miss the opportunity that is now being given to us.

Stavros Koumentakis
Senior Partner

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.

Answers to the first ten, relevant questions.

The production of legislation in the middle of a pandemic is going strong! Yesterday, May 1st, in the middle of the pandemic, it turned out that it was neither a holiday nor a strike-day. Returning (or, at least, attempting to return) to normalcy requires legislation. So let’s get started! The 1.5.20 LD (Government Gazette vol. A ’90 / 01.05.2020), addressing, among other things, labor relations, was published in yesterday’s Government Gazette.

“As you set out for Ithaka, hope the voyage is a long one ” And if, in this case, Ithaca is our return back to normalcy, we do see that the road will be really long. Although we all wish otherwise.

The above LD is titled: “Further measures to address the consequences of the pandemic; and the return to social and economic normalcy”. However, its title is not accurate, as it is impossible to return to “social and economic normalcy”. We all know that. As we know, we will be led (hopefully soon) to a new ” normalcy”. Both social and economic.

Issues arising around labor relations, in the context of the current pandemic, have preoccupied us in a series of (very) recent articles. The issues addressed in the above LD have preoccupied us in several of them and, among others- in the most recent: Coronavirus & Businesses: Basic (legislative) survival measures  as well as  Coronavirus: the invisible(;) enemy of jobs

Following our previous articles, we will address the abovementioned LD.

 Question 1: Are businesses (depending on the NACE Revision 2 classification of their business activity) entitled to extend the suspension of their employees’ employment contracts?

These businesses had, inter alia, the possibility [in particular: Article 1 §1 (subsection A2) no. 12998 / 28.3.20 JM] to decide to suspend the employment contracts of part or all of their employees. If they have decided to suspend the contracts of their employees, they are entitled to extend said suspension (article tenth par. 1 LD / 1.5.20) at most:

(a) for up to 60% of the contracts already suspended and

(b) for a period of thirty (30) days but not beyond 31 May 2020.

It is noted that in the event the maximum limit (60% of the contracts already suspended) is exceeded, the business pays, on its own, the remuneration of those employees whose contract was extended in excess of that percentage.

Question 2: What about the employment contracts of employees of businesses whose operation (continues to) be suspended?

Some businesses continue to suspend their operations by order of the public authority in May 2020. The suspension of their employees’ employment contracts is extended for as long as the operation of the business in which they are employed is suspended (Article 10, paragraph 2 of the LD / 1.5 .20).

Question 3: Are employees whose employment contracts’ suspension is extended entitled to a salary?

NO-They are not entitled to a salary

BUT: Employees whose employment contracts’ suspension is extended (either if the business in which they work belongs to the affected sectors or if their employer’s operation has been suspended by a decision of a public authority), are entitled to financial aid in proportion to the days of this extension (Article tenth, par. 3 LD / 1.5.20).

 Question 4: Is the ban on layoffs still in place?

For businesses that have opted to suspend the employment contracts of their employees, there was an explicit ban on layoffs for all their staff and, in fact, throughout the period of the specific suspension (Article eleven § 2A, case b ‘LD / 20.3 .20).

The businesses that will choose (Question 1) to extend the suspension of their employees’ employment contracts are obliged (for as long as they choose to suspend said contracts) to not make reductions of their staff by terminating employment contracts. In case they terminate them, such terminations are invalid (article ten, par. 4 LD / 1.5.20).

Of course, it should be noted that there is still an obligation to keep the same employees in the same jobs – see below…

Question 5: Is the obligation to maintain the same number of jobs still in place?

What was the case until 30.4.20?

Businesses that decided to suspend the employment contracts of their employees, had the obligation (article eleventh § 2A, per. C. LD / 20.3.20 as well as article 1 §5 (sub. A.2) no. 12998 / 232 / 28.3.20 JMC) to maintain the same number of jobs for a period of time equal to that of the suspension, following its expiration. In other words, these businesses were required to retain the same employees for 45 days after the expiration of the measure. Most importantly: under the same working conditions under which they were working on 21.03.2020. The concept of the same number of jobs, however, does not include those who resigned. And it also does not include those who retired and part-time employees whose employment contracts expire after the suspension.

What happens from 1.5.20 and on?

Basically, nothing changes. Businesses that decide to extend the suspension of their employees’ employment contracts are obliged, after the expiration of the extension of the suspension of the employment contracts of these employees, to maintain for forty-five (45) days the same number of jobs and with the same type of employment contract (article ten, par. 5 LD / 1.5.20).

Of course, we will wait for the Ministerial Decision that will exclude those who resign or retire from their job. Also, fixed-term employees whose employment contract expires after the expiration of the suspension. (Of course we cannot be sure, because the specific, necessary, exceptions were not included in this LD).

Question 6: Do we expect further specifications on the above issues?

We expect, in any case, some JMCs (of the Ministers of Finance, Labor & Social Affairs and Health) that will define the relevant details, among them, the amount of financial support for employees whose employment contract is extended (article tenth, par. 6 LD / 1.5.20).

This LD provides the possibility of providing extensions with JMC (of the Ministers of Finance, Labor & Social Affairs) of the implementation of the above measures until June 30, 2020 for businesses, whose operation is suspended in May 2020 by order of a public authority.

Question 7: Under what conditions is a final revocation of the suspension of employment contracts taking place?

Businesses NOT concerned:

Those businesses whose operation continues to be suspended by order of a public authority during the month of May 2020 (article eleven, par. 5 LD / 1.5.20).

Businesses concerned:

Businesses that have suspended (on their own) their employment contracts of part or of all of their employees (in the context of the measures of the pandemic) – (article eleven, par. 1 LD / 1.5.20).

Possibility of revoking the suspension of employment contracts:

(Only) The businesses (mentioned above) are entitled to permanently revoke the suspension of the employment contracts of their staff (Article eleven, par. 1 of the LD of 1.5.20).

Revocation conditions:

There are two important conditions in order for the permanent revocation of the suspension of their staff’s employment contracts to take place:

(a) The revocation shall apply to at least 40% of the employees whose contracts are suspended and

(b) The employment contracts have been suspended for at least fifteen (15) days.

It should be noted, however, that employees (for whom a permanent revocation of the suspension of their contracts will take place under the aforementioned regulations) are entitled to the financial support provided for in proportion to the days of their suspension (Article eleven, par. 3 LD of 1.5 .20).

Question 8: Can a business which permanently revoked suspensions re-suspend their employees?

NO?

The employees whose contracts’ suspension was permanently revoked, in accordance with the above (Question 7), cannot be suspended again (Article eleven, par. 2 LD of 1.5.20).

Question 9: Is it possible to temporarily revoke the suspension of employment contracts?

YES-there is a possibility of temporary revocation of the suspension of employment contracts (article twelve, par. 1 LD / 1.5.20).

Businesses concerned: Both those that have been classified (depending on the NACE Revision 2 classification of their business activity) as affected and those whose business activity has been suspended by order of a public authority.

Prerequisites for the temporary revocation of the suspension of employees’ employment contracts: Unjustifiably strict: The coverage of extraordinary, urgent, inelastic needs of the business that cannot be delayed.

Employee Remuneration: During the temporary revocation of the suspension of the employment contracts, the employer is responsible for paying the agreed upon remuneration of its employees, in proportion to the days they worked.

Obligation to notify ERGANI: Businesses that temporarily revoke the suspension of employment contracts of their staff are obliged to notify “ERGANI” before the extraordinary work is performed (Article twelve, par. 2 LD / 1.5.20 ).

Return to the suspension status: After the expiration of the temporary revocation of the suspension of an employment contract, the suspension of the contract continues until the completion of its full-time suspension length (Article twelve, par. 3 LD / 1.5.20).

Question 10: Is it possible to temporarily adjust the working hours of employees?

YES – there is a possibility of temporary adjustment of the employees’ schedule (article thirteenth LD / 1.5.20).

Businesses concerned: Both those that have been classified (depending on the NACE Revision 2 classification of their business activity) as affected and those whose business activity had been suspended by order of a public authority.

Schedule adjustment: These businesses are entitled to adjust their employees’ working hours to their operating hours. The adjustment of the working hours of the employees is carried out on the condition that the type of employment contract of the specific employees is not changed.

The way back to “normalcy” is not short – it is not even possible.

Most importantly: It is also not possible, despite any expectations, to return to the (pre-pandemic) “normalcy”.

But let’s hope that, contrary to Cavafi’s urgings, “the voyage will not be a long one.”

Stavros Koumentakis
Senior Partner

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.