Koumentakis

Tag: εργασιακά

  • Voluntary (unpaid) Work: Is it possible?

    Voluntary (unpaid) Work: Is it possible?

    Voluntary work (work, ie, without pay) looks like an oxymoron. At a first glance, it seems to refer to undeclared work (or “moonlighting”), “exploitation of man by man” and so on. But is that the case?

     

    Work and pay: an (unbreakable?) bond

    We have already seen the inextricable link between work and pay in an earlier article. There, we also found the value of the payment (and the consequences of non-payment) of the salary. This all seems perfectly normal. The employee has a (reasonable) claim and the employer has a (justified) obligation to pay it. Moreover, the payment of the salary is the compensation from the employer for the employee’s work.

    The vital importance of salaries is evidenced by a wealth of data. Among other things, from the enactment of special legislative provisions, aimed at protecting salaries and ensuring their payment.

    Reasonably, then, one wonders if and how there can be voluntary work. The answer, in order to be given, presupposes the (given) separation of voluntary from dependent work.

    An important point worth mentioning: Voluntary work is not dependent work. Based on this fact, voluntary work does not fall within the scope of Labor Law. Consequently: voluntary work is not regulated by the provisions of labor law.

     

    Voluntary work: the lack of legislation

    The institution of voluntary work is not new. As an “old” institution, it is widely known and widespread. It has many, well known, forms.

    Voluntary work will be found in non-profit bodies and organizations. In bodies exercising public power. In political parties. In legal entities of private law of non-profit character. But we will also find them in legal entities of a speculative nature. We will touch on this particular category below.

    So, despite the fact that volunteering is widespread, there is no relevant legal provision. It is unfortunately not regulated by law. Its existence, however, is recognized. We find it in both theory and jurisprudence. Its existence is accepted (and this is interesting) in Governmental documents. Worth mentioning are the documents No. 2418/10/93 and 21829 / 04.08.2014 of the Ministry of Labor. Wherever we find a mention to voluntary work, the following assumption is always there: its distinction from dependent work. Discrimination based on the finding that the element of dependence is missing in voluntary work..

     

    The “freely” provided voluntary work

    Voluntary work is provided freely. In other words: the employee does not provide their services on the basis of their will or obligation to work under an employment contract, but on the basis of their voluntary disposition (Supreme Court 180/2000).

    In case law, but also in the Documents of the Ministry of Labor, as voluntary employment contracts are recognized those in which the provided “work” is based (indicatively) on: (a) family ties (eg: Court of first instance of Thessaloniki 1332/1988), (b) friendship (eg.: Supreme Court 712/2001), (c) engagement or cohabitation (eg: Supreme Court 2007/2019), (d) moral obligation (e.g.: as well as (e) political reasons (eg: Court of first instance of Athens 464/2000), ideological, philanthropic, etc.

    The content of the specific, indicatively listed, legal relations (for the legality of voluntary work) has, in general, the legal basis of contractual freedom (361 CC).

    The lack of a legislative framework more specific than the principle of the freedom of contracts creates the need for a written record of this contractual relationship. It does not seem logical to sign a contract with the person with whom we may be living or with the person with whom we have a close, brotherly, friendship. It is, however, as necessary if we consider that it will not be paradoxical to require proof before a third party (of the Labor Inspectorate, for example, EFKA or the competent Court).

     

    The agreement on non-payment of salary

    The existence (or not) of the dependency element is one of those elements that distinguish the dependent employment contract from related contracts (also see: Employment Contract (Distinction From Related Concepts & The Protection of The Company).

    In the case of voluntary work, the lack of the dependency element (advocated by the voluntary provision of services) must be accompanied by an agreement for the non-payment of a salary.

    It is important to be clear that he one who voluntarily provides “work” is not one of the “employer’s” employees. And this can only arise from a written, explicit and specific, relevant contract. However, the mere omission of reference in the employment contract to the amount of the employee’s remuneration cannot be equated with the employer’s lack of obligation to pay wages.

    [It should be noted here that, in general, when there is no individual agreement on the amount of remuneration and it is not possible to resort to the legal salary, the employer is obliged to pay the usual salary (articles 649 & 653 of the Civil Code). The salary, ie, that would be received by an employee of the same specialty with the same qualifications and qualities, providing similar work, under similar conditions. However, the introduction of the minimum wage has replaced, in most cases, the need to resort to the ordinary wage. A similar need still exists, for example, in standby contracts].

    In the case of voluntary work, non-payment of salary or other compensation is de facto agreed. The value of the “work” offered, in this case, cannot be sought even by the provisions of unjust enrichment. Voluntary work is provided, as already mentioned, freely – for no consideration. As a result, the wealth that may be generated for the recipient of the services is based on a legitimate cause. It cannot, therefore, be described as unjustified. It is also not possible (and for the same reason) to be sought (Supreme Court 180/2000).

     

    Criteria for designating a contract as voluntary work

    Elements of the voluntary employment contract are: (a) the lack of the element of coercion and (b) the agreement for non-payment of wages. The existence of these elements, however, does not necessarily mean that this is a voluntary employment contract. A contract of employment may be concealed.

    Moreover, the designation by contractors of a contract as voluntary work is not binding on the competent authorities. As we pointed out in a previous article: “the characterization of a contract, as the exclusive task of the judicial authority belongs to the court (Ind .: Supreme Court 602/2017, Supreme Court 608/2014, Plenary Session of the Supreme Court 7 & 8/2011, Plenary Session of the Supreme Court 6/2001)”.

    Document No. 21829 / 04.08.2014 of the Legal Department of the Labor Inspection Body of the Ministry of Labor lists specific elements, which must be taken into account when investigating the provision or not of dependent work. Specifically: (a) the type and duration of work, (b) the employer’s activity (c) the requirement for the one working voluntarily to have special skills, (d) the fact that the provision of services is the profession of the volunteer and their main means of livelihood, (f) the existence of a kinship or other kind of relationship, (e) the possible conclusion of a contract.

    If the above criteria (and the facts in general) support the existence of dependent rather than voluntary work, the administrative sanction is not of minor importance. The competent Labor Inspector will, in this case, impose a fine of € 10,500 for each (undeclared) employee. And this, with captive competence, without prior invitation of the employer to provide explanations (article 65 of law 4635/2019).

     

    The obligation (or not) of the employer to pay insurance contributions

    Finally, a question arises regarding the existence (or not) of the employer’s obligation to pay insurance contributions in favor of the one who provides voluntary work. (We refer, of course, to the cases where there is no (hidden) dependent work).

    The answer to the above question is given by article 2 §1 f. Of law 1846/1951 (LAW ESTABLISHING THE GREEK SOCIAL SECURITY AGENSY). It is specified, in particular, that the insurance of this law compulsorily and automatically includes “persons who within the borders of the country provide professional work for a fee, as such understood and provided on behalf of Legal Entities of Public Law regardless of legal nature of the relationship (public or private law) “.

    As already mentioned, voluntary work presupposes a lack of dependence and, in addition, an agreement for non-payment of wages. Therefore, there is no obligation of the employer to pay insurance contributions in favor of the employee voluntaring.

    Elements associated with employment contracts are those of dependence and salary. Of course, it does not seem tolerable, at first sight, to accept unpaid work. Unless it is voluntary “work”.

    Although voluntary work is not regulated by law, it is nevertheless a reality. And as such it is accepted by theory and jurisprudence. Even from the Ministry of Labor and its bodies.

    But in implementing this form of “work” it is necessary to be very careful. And when we choose it, we have to manage it even more carefully. The existence of the relevant, content-wise, conventional text seems (basically) absolutely necessary.

    A possible failure to prove the basis and existence of voluntary work is inevitably linked to (underlying) dependent work. And, at the same time, with severe penalties for the business, organization or body to which it is provided.

    The (free) meeting of the needs of the latter is important.

    But more important is their (maximum possible) protection.

    stavros-koumentakis

    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 Contract (distinctions from related concepts and the protection of the business)

    Employment Contract (distinctions from related concepts and the protection of the business)

    The concept of employment (contracts) in the context of Labor Law presupposes dependence. The protection offered by Labor Law (something like the Magneto helmet, for “The X-Men fans”) presupposes the provision of dependent employment services. But when one is and one is not dependent? When the work offered is classified as dependent when is it “something else”? Are there clear boundaries between the employment contract and the contract of independent services, the works contract and / or the contract under which commission is payable? And how, after all, is a business protected?

     

    Regarding dependency and dependent work

    It is well known that dependency is a fundamental concept in labor law. The legislator chose, however, not to legislate on it. This has resulted in the development of various views and theories about its content. Their common goal? Identifying the (safe) criteria for designating (or not) a contract as an employment contract. The individual issues concerning the contract of employment were addressed in our previous article (: Employment Contracts: What are they exactly?) There we approached the varius views, theories and criteria that each of them adopts. Also: the impossibility of defining, with certainty, the concept of dependence. Finally, we have been given the opportunity to approach the critical (and non-critical) indications adopted by case law for the evaluation of a contract as an employment contract. The inability to clearly define the content and meaning of the employment contract is a given. Its boundaries remain fluid. As a result, it is extremely difficult to distinguish between related concepts and contracts. Among them: the contract for independent services and the works contract. And -sometimes- the contract under which commission is payable.

     

    Related contracts

    The distinction from the contract of independent services

    This is perhaps the most difficult distinction between related contracts. The reason does not seem strange: independent service and employment contracts have a number of common features. On the other hand, the object of both is the provision of paid work. Their common grounds are many. This is also the reason why the Civil Code itself places them in the regulatory scope of the same set of provisions (articles 648 et seq.). This is despite the fact that some of them refer, exclusively, to the employment contract. The only criterion for distinguishing the two conventional forms is the concept of dependence. The lack of dependence, moreover, is what directly refers to an independent service contract.

    According to case law, “…contracts of independent services… exists when the employee provides their services in lieu of wages, without being subject to the control and supervision of the employer and being obliged to comply with the latter’s orders and instructions, in particular as to the how and the time of provision of their services ”(Ind .: Supreme Court 602/2017).
    However, as also noted in case law, there is some form of commitment and dependence in the independent service contract as well. As is the case, after all, in any case where (contractual) obligations are undertaken. For this reason, the compliance from the part of the one offering the work with what has been contractually agreed (regarding, inter alia, the place or time frame of their work) does not imply, without a doubt, the “worker’s” dependence on the employer. Based on the above data (but especially the ambiguity of the concept of dependence), the difficulty of distinguishing between the two types of contracts arises as self-evident. In many cases, in fact, the discrimination proves to be extremely difficult.

    The distinction from the works contract

    At first glance, distinguishing between an employment contract and a works contract seems easy. Moreover, the purpose of the two, specific, contracts is different. Specifically, with the employment contract, the parties aim at the work itself, which will be provided for a definite or indefinite period of time. On the contrary, with the works contract (681 AK), the parties aim to achieve a specific, final, result. The realization of this certain result implies the automatic termination of the contractual relationship of the parties (Ind .: Plenary session of the Supreme Court 19/2007, Supreme Court 223/2011). However, according to case law "… when the provision of labor is intended for a certain result, but which is outside the power of the worker, who undertakes not to produce it, but simply to do what is possible for them to produce it, then there is an employment contract and not a works contract, even if it has been agreed between the parties that the salary will be paid only if the desired result occurs” (Supreme Court 376/2006).
    In any case, the works contract (as well as the independent services contract) is characterized by a lack of dependence on the employer. Proof of this assumption is the fact that the contractor has the initiative in the execution of the project. The latter is the one who chooses the time and the way of execution of the project within the contractual deadlines. They are not obliged to comply with the (non-contractual) instructions and orders of the employer. They are not even subject to the control of the latter. The contractor undertakes to execute / deliver the agreed project. The developer-employer reserves the right to receive a properly executed project. The fluid boundaries of the concept of dependency clearly make it difficult to properly characterize an individual contract (: employment or works contract). However, it is extremely difficult to distinguish between the two types of contracts when we have at hand successive projects for the same employer, under the same contractual terms. In such cases, successive contracts are likely to cover the employer’s ongoing and permanent needs.

     

    The distinction from the contract under which commission is payable

    The independent services contract and the works contract are the closest contracts to the concept of employment. The employment contract, however, has more common features with the works contract (articles 713 et seq. of the Civil Code). In both contracts, for example, a work supply is agreed upon, while compliance with the instructions of the employer or principal respectively is required.
    However, from the works contract regulated in the Civil Code, the element of remuneration is missing. In contrast, in the employment contract, the salary is the employee’s compensation
    and the means of subsistence. The salary is therefore one of its essential elements. The existence or non-existence of remuneration is therefore what makes it relatively easy to distinguish between employment and works contracts. (Let us not forget, of course, the special form of the paid order contract concluded with in-house lawyers).

     

    The emerging danger

    The incorrect legal characterization of the employment contract is not without legal consequences. Dependence, moreover, is what puts the employee “under the umbrella” and the protection of labor law. There are many cases where the circumvention of labor law is attempted by the use of related contracts, such as the ones mentioned above. Independent services contracts, works contracts and even contracts under which commission is payable conceal, not infrequently, employment contracts. The indistinguishable limits between them are those that are used to exceed the protection of Labor Law. The danger that arises in terms of employees’ rights is undeniable. And given.
    On the other hand, however, we should not ignore the existence, regulation and operation of related contracts. Especially the independent services and works contracts. Should we, from the outset, exclude the truth of the intentions of the parties who have chosen an independent services or works contract? In this context, we should avoid an aphoristic generalization about an undercover contract when we are in front of a related contract. Adopting the intention in advance to circumvent labor law by a business which chooses to enter into a contract other than an employment
    contract, the freedom of contract is ultimately violated. And, of course, freedom in conducting business. The moment, in fact, when the latter is protected under the Constitution.
    Thus, in the context of business freedom, freedom of contract and private autonomy, the desire of the business may indeed be the conclusion of a contract for independent services, works and / or a contract under which commission is payable. Let us not attribute, without a doubt, "bad" intentions to the business. A contract other than an employment contract may indeed reflect the true will of the parties and what has been agreed. And the one that better serves the interests of the parties (and not just the business’ targets).

     

    Restriction of business (and contractual) freedom

    However, there are some cases where the aforementioned freedoms of the business are either bent overall or drastically limited. In these cases, the employee’s interest is the one that is exclusively proposed and drastically protected. These are the cases in which the Greek legislator preferred: (a) either to attribute to certain contracts the designation of an employment contract directly, (b) or to establish presumptions in favor of the designation of a contract as an employment contract.

    The direct legislative characterization of a contract as employment contract

    In specific contracts, the legislator chose to attribute, by themselves, the trait of dependency. These are clearly cases where the boundaries of the employment contract dependent with related contracts become particularly blurred. Typical examples of direct legislative characterization: (a) the contracts concluded by professional athletes with sport SAs for the provision of sports services (article 85 par. 2 and 4 of Law 2725/1999) and (b) the contracts concluded by tour guides (holders of the provided license to practice the profession of tour guides) with tourist – travel agencies, with members of the association of shipowners of passenger ships and with tourist offices abroad for the implementation of tourist programs (article 37 law 1545/1985). However, in the above and in the corresponding legislative interventions, issues and concerns regarding their constitutionality are raised.

    The legal presumptions of dependence

    In other cases, the legislature limited themselves to introducing (rebuttable) presumptions in favor of the existence of dependent work. In these cases, the assistance of certain facts argues in favor of the existence of an employment contract. However, as the presumption offered by law is defined as rebuttable, the possibility of retaliation is provided. A typical case of introduction of a presumption in favor of dependent work is the provision of article 1 of law 3846/2010. According to this provision: “The agreement between the employer and the employee for the provision of services or work, for a definite or indefinite period, especially in the cases of pay per unit (contract), telework, employment from home, is presumed to conceal an employment contract, if the work is provided in person, exclusively or mainly to the same employer for nine (9) consecutive months”. Despite the existence of the facts which fall within the scope of application of a presumption corresponding to the above, the judge is the one that at the end will determine the existence of dependent work.

     

    The correct legal characterization

    In any case, the judge is the one who sovereignly evaluates any case of questioning the characterization of a contract, which is brought before them. It is also known that the characterization (by the parties and / or the legislator) of a relationship as an employment or independent services or works contract or contract under which commission is payable, does not depend on the characterization given to it by the parties or even the legislator.
    On the contrary, "this characterization, as a pre-eminent task of the judicial function, as delimited by the provisions of art. 26 § 3 and 87 § 2 of the Constitution, belongs to the court, which, evaluating the facts set out in the lawsuit and those that may possibly subsequently arise during the evidentiary procedure, gives the exact (correct) legal characterization to the contract. “(Ind .: Supreme Court 602/2017, Supreme Court 608/2014, Plenary Session of the Supreme Court 7 & 8/2011, Plenary Session of the Supreme Court 6/2001).

     

    And what is the appropriate attitude of the business?

    In the light of all the above, the businessman/woman (and / or their legal representative) could reasonably ask: “So what should I do?” It would be desirable to avoid burdening the business with legal and other, incalculable, risks.
    In practice:
    (a) Selection of the legally correct contractual type that connects the business with its employee or associate – before the start of their cooperation.
    (b) Clear documentation of the legal validity of the contractual type to be selected. Incorporation in the relevant, prescriptive, conventional text of those substantive parameters
    that support it.

    It is also important to keep this in mind: At some point in the future, any contractual relationship, any contract, any case in which we are involved may be brought before a competent Court for evaluation.

    Let’s not be left then to form our own supporting file and arguments.

    Because, as is well known, “it is better to prevent than cure”.

    stavros-koumentakis

    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 Contracts: What are they exactly?

    Employment Contracts: What are they exactly?

    Labor law seems to be all about “all or nothing”. On the basis of this principle, a contract either is or is not subject to the provisions and protection of Labor Law. In the first case, the employee enjoys the protection of Labor Law- in its entirety. In the second, Labor Law simply does not apply. It is therefore very important to know if a contract is subject to the provisions of Labor Law. And, of course, under what conditions. But things are neither simple nor clear. Rightly so, we would wonder (regarding Employment Contracts): What are they?

    A small breach of the aforementioned “all or nothing” principle, the case of Managers and their own, limited, protection. But what about the rest?

    The above topic seems completely theoretical but it is not at all. The (correct) assessment of a contract as an employment contract (or not) reduces the risks of the business. It creates legal certainty.

    How important is it, for example, to be able to safely distinguish this form of contract from other contracts like it (indicatively: services and works contracts)? How important is it to be able to choose the right form of contract each time we enter into or re-approach a partnership? How many dangers could we avoid?

    This issue does not concern, exclusively, those studying (labor) legal theory. Neither just us lawyers…

     

    Prerequisite for the application of the provisions of the labor legislation

    A condition for the application of the specific provisions is the provision of dependent work.

    The concept of dependency is crucial. However, the legislator did not choose to define it: Definition of dependence and / or dependent work does not exist.

    Various theories have attempted to fill this gap. Each of them seeks to be the criterion for the classification (or not) of a contract as an employment contract

     

    Theories on what constitutes dependence

    Many and most experts have written about theories on what is dependence. We will not attempt to record or look into them in detail. But it would not be possible, precisely because of their fundamental importance, not to mention them. Even briefly. Indicatively:

    (a) The theory of financial dependence

    Necessary but also the only criterion for dependence, according to the specific approach, is when the employee’s sole (or main) source of income comes from a specific job. Under this approach, the employee is required to devote all of his or her working time to the performance of his or her specific job.

    In a broader sense, financial dependence is found when the one offering work is not in a place (financially or other) to utilize their own work or the work of others to their benefit. Therefore, they do not take the risk (business or financial) from carrying out the specific activity.

    The theory of financial dependence is not a safe criterion for determining dependent work. It is considered by the jurisprudence as only an ancillary criterion for identifying dependence.

     

    (b) The theory of functional or organic dependence

    A decisive criterion, according to this theory, is the integration of the employee in the employer’s business. This integration is what makes the employee a functionally integrated element of the company.

    This theory has also not prevailed in our country.

     

    (c) The theory of legal dependence

    This is a theory of French origin. This theory considers as a critical criterion of identifying dependency the provision of work under the direction, authority and supervision of another person, the employer. The latter has the right to monitor the implementation of their instructions.

    This theory presents important similarities with that of personal dependence, which has been adopted as the prevailing theory by Greek jurisprudence. In fact, sometimes these two theories are identical.

     

    (d) The theory of personal dependence & the managerial right of the employer

    This particular theory is of German origin and the prevailing one in our country. According to this theory, the work provided under the direction and instructions of the employer is considered dependent. An important element of this theory is the managerial right.

    The managerial right is defined as the power of the employer to determine, unilaterally, the terms of employment. Specifically, the place, the time and the way of providing the work.

    The scope of the managerial right is determined and limited by hierarchically higher laws. In other words, the employer is entitled to set the terms of employment only when they are not already set by hierarchically superior rules of law.

    In particular, it is settled case-law that “… a contract of employment exists when the parties intend to provide the agreed work and wages, regardless of the method of payment, and the employee is subject to legal and personal dependence on the employer. This dependence is manifested in the right of the latter to give binding instructions and directions to the employee, as to the manner, place and time of provision of the work and to exercise supervision and monitor to verify the employee’s compliance with them. ” (indicatively: Supreme Court 602/2017, 171/2016, 608/2014, Plenary Session of the Supreme Court 28/2005).

     

    The inadequacy of dependency theories as a means of identifying employment contracts

    The aforementioned theories on dependency have failed to clearly define the meaning of dependent work. In fact, the prevailing theory of personal dependence in our country is currently receiving strong criticism.

    The evolution of technology is rapid. The possibilities that come with it are without limits. The needs that are formed are unprecedented. It seems only logical that flexible forms of employment are gaining ground, more by the day, over the classic full-time employment contracts. Especially after the recent, ten-year long, economic crisis in our country. And even more: due to the ongoing international and national economic crisis and recession due to the Covid-19 pandemic. This does complicate things even more.

    In this, fluid and ever-changing environment in employment relationships, the managerial right of the employer as a means of identifying (or not) an employment contract is more often than ever found to be not enough. This fact, however, does not mean that any flexibility provided to the employee in terms of the place, manner and time of employment, deprives their work of the element of dependence.

     

    There is another aspect worth mentioning

    The quick adaptation of employees to the rapid evolution of technology, to which we have already referred, gives them a significant lead in evaluating the optimal way of providing their work. How certain is it that the employer knows better (than the young and tech-savvy employee) the best way to provide non-manual work? And how normal, after all, does it seem to give the employee considerable freedom in how to provide their work? And, in a logical sequence-in addition, in terms of the time and place of the offering of their services?

    How important, after all, can the time, place and even the way of providing the work be for the characterization of a contract an employment contract?

    Therefore, the limits of this type of contract become fluid. It is difficult to distinguish it from related contracts (services and works contracts, for example).

     

    Additional signs of dependence

    The weakness of dependency theories as a criterion for distinguishing employment contracts from related contracts is a given. Consequently, legal theory and/or case law need to take additional evidence into account. A clearer definition of the concept of dependency seems (and is) extremely important.

    Among these indications, which advocate the existence of dependence, are, among others (indicatively: Court of Appeal of Athens 15/2008, Court of first Instance of Athens 372/2010, Supreme Court 1133/2012):

    (a) The non-existence of an independent business organization of the employee,

    (b) The (contingent) payment of operating expenses of the employee by the employer,

    (c) The non-use of additional staff by the employee,

    (d) The inability of the employee to develop a separate clientele and expand into new markets (formal vs real freedom of action),

    (e) The employee does not take responsibility for the financial solvency of the customers,

    (f) The assumption of business risk by the employer.

    The various signs of dependence do not need to be cumulative. According to case-law, “… what distinguishes dependent work from independent work is not the quantitative element, that is, the accumulation of more evidence of commitment and dependence, but the qualitative element, that is, the particular quality of commitment and dependence which it has for the specific employee that make necessary the special regulation of their relationship with the employer and justify their special protection by the labor law ”(Plenary Session of the Supreme Court 28/2005).

     

    Non-critical signs of dependence

    On the other hand, and according to the majority of case law, there are indications that are not critical for the characterization of a contract as an employment contract. These indications may result in the terms of the employment contract deviating from those normally agreed. However, these terms do not appear to be “out of the ordinary” elements of employment contracts.

    Among the evidence that are not critical, based on the theory of personal dependence, are:

    (a) The duration of the obligation to provide work, (b) The provision of work as a primary or secondary occupation, (c) The amount of remuneration, (d) The manner of remuneration, (e) The type of work provided, (f) The development of an initiative (although its lack advocates the existence of an employment contract), (g) The tax regime and the issued (tax) document, (h) The social security status of the employee (indicatively: Supreme Court 460 / 1986, Court of Appeal of Patra 841/2007, Court of First Instance of Athens 372/2010, Supreme Court 71/2011,).

    Executives, to whom we have already referred, are a typical example of employees whose employment provides several of the above indications, which deviate from the usual (even legal) terms of employment contracts. Executives are usually paid very high salaries. At the same time, they are not subject to specific working hours. Rather, they are developing (and should develop) important initiatives. In fact, their characterization as executives determines their clear differentiation from other employees. It places them closer to the employer. In fact, instead of the employer, they operate, exercising their powers both within the company (on the employees, for example) and in the relations and transactions of the company with third parties.

     

    Is the most favorable solution for the employee truly a solution?

    Given the difficulties that exist in distinguishing employment contracts and the adverse consequences of not including an employee in the protective provisions of Labor Law, part of case law argues that in cases of doubt the most favorable solution for the employee should be applied.

    Indicatively: “In case of doubt, the court must give the most favorable solution for the employee, as required by the principles of Labor Law and with the corresponding application of article 2 of Law 1846/51, according to which it is difficult to distinguish dependent or non-dependent work of a person, this is considered to be covered by turning to the most secure solution, ie that they provide dependent work. ” (indicatively: Court of Appeal of Patra 841/2007).

     

    Let us move away from theories: in reality…

    As mentioned in the introduction, understanding that a contract is an employment contract is always valuable. The need to reduce business risk is significant. The need for the company not to take legal risks is even more important.

    But what does all this (unfortunately) “fine print” mean for the business?

    As for the same subject-seen from another angle:

    What should be the choices of the business and what of its legal representative?

    Given the current (legislative, jurisprudential and theoretical) data, we must, with excessive care, each time evaluate the legal framework whithin which we (choose to) enter into a contract.

    Particular care should be taken to capture in the contractual text the critical elements that conceptually differentiate any type of contract (eg services or works contract) from an employment contract -provided of course we choose to do so.

    Dependency theories for characterizing an employment contract as such have already proved inadequate. Developments in labor relations attempt, in vain, to follow the rapid, on a continuous basis, developments in technology. The speed of both intensifies, more and more, the inadequacy of dependency theories.

    The recent pandemic has given a further boost to flexible forms of employment. It put “informal” forms of work on the lead. Teleworking is probably the most typical example. It is a given, already, that it is not possible to talk about the future, when, exhausted, we try to catch up with the present.

    The managerial right, shaped around the Ford production model (: production line, homogeneous workforce, simple and repetitive movements that serve mass production), already seems obsolete.

    It is therefore necessary to expand the conceptual elements of the managerial right.

    Even clearer is the need for a clearer demarcation of employment contracts, taking into account the present and the (foreseeable) future.

    Until then;

    It is necessary to (very carefully) manage the relationships that are specific to employment contracts.

    Both on a substantive level and on a level of the relevant contractual texts.

    But especially in the relevant contracts.-

    stavros-koumentakis

    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.

  • CO-OPERATION. (How effective will it prove to be?)

    CO-OPERATION. (How effective will it prove to be?)

    The pandemic that broke out in our country since March had dramatic consequences in the field of economy (among others). The vast majority of businesses have been hit hard. And so have the jobs they offer.

    Significant legislative measures have been introduced in order to strengthen both. Their (expected) gradual revocation began with the LD of 1.5.2020. But the economic downturn persists. The road to recovery seems long. Most businesses are at risk. And so are the jobs they offer.

    The first, very fast, response of the European Union to ensure both is the SURE Program. Its implementation in our country is the COOPERATION program that has just taken shape with the provision of article 31, Part C’ Law 4690/2020. How effective will it prove to be?

     

    Question 1: What is the aid mechanism (: program) COOPERATION?

    It is a type of employment support in the form of financial support for part-time employees. (And this despite the fact that both the explanatory memorandum and §1 of article 31 refer to “a form of financial support for short-term work”).

    Its purpose is to strengthen employees and businesses. Its ultimate goal is to maintain full-time jobs in the private sector

    This program is the implementation in our country of the European SURE Program. We have analysed SURE in the context of our article on Flexible Forms of Employment. That is, the provision of temporary support to mitigate the risks of unemployment in an emergency (SURE – Support to mitigate Unemployment Risks in an Emergency). SURE aims to protect jobs and employees affected by the coronavirus pandemic. The (total) financial assistance of this instrument is expected to amount to (up to) 100 billion euros in total.

     

    Question 2: What is the duration of the COOPERATION program?

    The duration of this program extends from 15.6.20 to 15.10.20. The businesses that will be included in the program can make use of the facilities of the COOPERATION program for one or more months within the specific period of time, either for all or for a part of their staff.

     

    Question 3: Which businesses and under what conditions are they eligible to join the COOPERATION program?

    All businesses in the private sector of Greece (of continuous or seasonal operation) have the right to participate in the program, provided that their turnover is reduced by at least 20%, subject to the distinctions detailed in paragraph 4 of article 31 of Law 4690/2020. The fulfillment of this condition is checked according to the time of each business joins in the program.

    Basically, if a business participates in the COOPERATION program…

     (a)… in June 2020: The sum of the turnover of March-April 2020 in relation to the corresponding period of 2019 is taken into account.

     (b)…in July 2020: The sum of turnover from March to May 2020 in relation to the corresponding period of 2019 is taken into account.

     (c)…in August or September 2020: The sum of the turnover from March to June 2020 is taken into account in relation to the corresponding period of 2019.

     

    Question 4: Which employees does it concern?

    It concerns those employees who were full time employees on 30 May 2020 (: date of publication of Law 4690/2020)

     

    Question 5: What are the benefits of the businesses that will join the COOPERATION program:

    The specific businesses/employers are entitled to reduce the weekly working time by up to 50%. Their benefit consists in the payment of a, respectively, reduced salary to the employees who will be included in the program.

     

    Question 6: What are the obligations of the businesses that will join the COOPERATION program:

    The specific businesses/employers are obliged to:

    (a) not terminate the employment contracts of the employees who are part of it and, in case they do terminate them, such terminations are invalid

    (b) to maintain the nominal salaries of the employees who are part of the COOPERATION program and for as long as each of them is part of the specific program.

     (c) to pay the total sum of the insurance contributions corresponding to the (initial) nominal salary, the leave allowance and the Christmas gift of their employees who will join the COOPERATION program.

     

    Question 7: What is the financial support provided under the program?

    Employees of businesses/employers who will join the COOPERATION program are paid financial assistance corresponding to 60% of their net salary, which corresponds to the time during which they do not work. In the event that the employee’s net salary, after the above adjustment, falls short of the net statutory minimum daily or monthly wage, the difference is covered by the State Budget.

    In the context of the COOPERATION program, a proportion of the leave allowance and the Christmas allowance due for the year 2020 is paid to the employees who will be included in the program, calculated on the financial support of short-term work, which amounts to 60% of the reduced salaries of the employees.

     

    Question 8: Are some businesses more favored? In which areas?

    Some businesses are treated more favorably in the context of the COOPERATION program.

    These are (article 31, par. 5, law 4690/2020) businesses:

    (a) providing passenger and freight air transport services (and businesses related to them)

    (b) providing consulting and management services exclusively to the aforementioned (a) undertakings and, last,

    (c) operating within airports and, exclusively, for their employees working there.

    The sectors these businesses are favored (compared to the others) are two:

    (a) They are obliged to pay the insurance contributions of the employees who will be included in the the COOPERATION program for the corresponding part of their salary payable (and not for the total nominal salary of their specific employees-like other companies are) and

     (b) The COOPERATION program extends from 15.6.20 to 31.12.20 and, in addition, the eligible businesses are entitled to join at any time until 31.12.20

     

    Question 9: Should we expect clarifications?

    This legislation sets out the basic principles of this measure. We will be expecting clarifications to be introduced with decisions of the co-responsible ministries.

     

    Question 10: The abolition of the Safe Operation Personnel provision.

    We have approached in detail th measure of the Safe Operation Personnel in a series of our articles [indicatively: Flexible Forms of Employment (: The Past, The Present And The Future…)]. It was one of the most important tools provided to businesses for their survival and job rescue. As we move away from the (often) suffocating measures introduced to deal with the pandemic, these tools are gradually being withdrawn. This measure is abolished on 15.6.2020. It is replaced by the COOPERATION program.

    How effective will this replacement prove to be?

     

    Both the European Union and our country have already accepted flexible forms of employment and part-time work as a means of crisis management. They take precedence over dismissals. The COOPERATION program comes to replace the (introduced during the pandemic and) successful, measure of Safe Operation Personnel.

    Will the benefit to the business/employer prove to be attractive enough for the success of the CO the COOPERATION program in the fight to save jobs?

    We are to see.

    But one will reasonably ask:

    Why, in the present circumstances, should not an affected business choose to apply the measure of Part-time employment or, even unilaterally impose, the measure of Rotational Work – as they were and continue to be provided for by law today? In these flexible forms of employment: (a) the business employs part-time employees and (b) pays a reduced salary and insurance contributions respectively.

    On the other hand, the same business, by including some of its employees in the COOPERATION program: (a) employs its employees it will include in the program for less hours and (b) pays a correspondingly reduced salary and, on top, the total sum of the insurance contributions corresponding to the nominal their salary.

    The plate does not tilt in favor of the COOPERATION program …

    stavros-koumentakis

    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.

  • Flexible Forms of Employment (: past, present and future …)

    Flexible Forms of Employment (: past, present and future …)

    Flexible forms of employment have been instrumental in tackling the adverse effects of coronavirus on entrepreneurship. They will also be a means of managing the deep recession we have already entered. However, they will remain present and will be further utilized. Anyone can confirm this – without, in fact, having special knowledge or foresight. Let’s face it. The future ahead of us cannot be the same as the past. This also goes for labor relations.

    Can we react?

    Of course! We can choose what the ostrich (allegedly) does in the face of danger. Let’s put our heads in the sand! To pretend the non-existence of what we have before our eyes!

     

    Labor relations in the recent and distant past

    The first of May: a day to enjoy spring or a day to celebrate labor?

    A celebration of labor in the minds of most – a holiday/abstinence from work. The opportunity, for this reason, for the celebration of spring.

    This year’s first of May was, of course, different from the rest. No gatherings or excursions to celebrate spring.

    This spring, like the ones to follow: just as beautiful.

    But what about labor relations?

    Absolutely Different.

    In May 1886 the labor unions in Chicago demanded eight hours of work and improved conditions. The slogan “eight hours of work, eight hours of rest, eight hours of sleep” summed up their demands. And all this in the traditional working model that was sufficiently responsive to the way the business is organized. In other words, in businesses that had a closed system of organization-structured according to the Ford production model.

    There have been significant changes over the years. The concern for employees’ rights has increased. And so has the concern to ensure employment.

    Labor relations are already adequately safeguarded. At the global, European, and of course national level. The result (among others): eight hours of work and a contract of employment. And, according to the classic model, at the employer’s premises.

    The third industrial revolution in the late 20th century was characterized by the use of electronics and computer science. It was an important milestone. It marked the beginning of the departure from the classical systems of production and offering of services. It has dramatically expanded capabilities. It has created new, unprecedented, needs. Needs that, to some extent, resulted in the creation of new forms of employment-deviations from the traditional working model.

    To meet these needs, more and more flexible forms of employment have been gradually utilized. The recent outbreak of the Covid-19 pandemic has pushed them into the foreground.

    It has already been proven that their utilization (or their necessary application) is a means of business survival. For the continuation of their operation and, of course, for the rescue of jobs.

     

    But what are, after all, the flexible forms of employment?

    Flexible forms of employment are those that, while based on the model of a typical employment relationship, at least one parameter is different. These are also characterized by the term “informal employment relations”.

    Their flexibility can be traced to individual aspects of the employment relationship. It is possible, for example, for this flexibility to regard:

    (a) The time when (but also the place where) the work is provided.

    These are the forms of flexible employment whose duration and distribution of working time go beyond the (normal) time limits of a full-time employee. Such forms of employment do not require a physical presence at the business’s premises. Work is organized in ways that take advantage of new possibilities. That satisfy new needs. Among them are the new, already formed, needs of the market. Of course, of the corresponding needs of the employees as well. We have already addressed typical cases of these forms of employment in our previous articles. Indicatively: part-time employment, rotational work, shifts, telework, standby contracts.

    (b) The employment status.

    According to the traditional model, employment contracts were concluded for an indefinite period. As time passed, fixed-term employment contracts are becoming more and more common. Furthermore: Employees whose (direct) employers are Temporary Work Agencies (TWA) provide their services to another (indirect) employer for a limited period of time in the form of temporary employment.

    (c) Remuneration systems.

    Flexibility can also affect the structure of employees’ wages and other benefits. The voluntary payments offered by the employer may be related to the productivity and results of the business.

    (d) Employees’ labor and insurance rights.

    Flexibility in the employment status of employees clearly affects their salaries, benefits, insurance coverage, pension rights, etc.

    However, the development and dissemination of flexible forms of employment has been accompanied by specific problems, which require the modernization of the regulations concerning them. The problems, mainly associated with the insecurity of employees and the (given) legislative loopholes, have already mobilized the European Union. Its goal is to balance between flexibility and protection.

     

    The past: Flexible forms of employment over time

    Flexible forms of employment are gaining ground. However, they are not a (very) recent invention of the legislator. At least not all of them. In our country, the national legislator has been concerned with flexible forms of employment since 1939, when rotational work was first provided for. Part-time employment was legalized in 1990. Teleworking was introduced relatively recently: in 2010.

    The implementation of flexible forms of employment was, initially, limited. They were brought in the spotlight due to the economic crisis of 2009. They were then (as well) used as a means of survival for businesses and job security.

    Significant reform of Labor Law in the field of flexible forms of employment took place in 2010. Specifically, Law 3846/2010 addressed, among other things, issues of temporary and part-time employment, teleworking, working time. Among its objectives: (a) the provision of guarantees in all cases where the hitherto existing regulations on flexible forms of employment did not prevent the creation of insecurity, (b) effective treatment of non-compliance with the working conditions provided for by law, (c) reduction of inequalities in the treatment of those working with flexible forms of employment.

    The recent, ten-year-long economic crisis has come to an end. The advantages of flexible forms of employment remain visible. Businesses have started making the most of them. This did not only happen in our country. According to a relatively recent (2019) survey by the International Workplace Group, 55% of businesses wanted to become more flexible, with immediate consequences, among others, for the forms of employment.

    The turn of businesses towards more flexible forms of operation (and, of course, employment) was not meant to be gradual. The reason for the (largely) violent, specific, transition of the majority of businesses to flexible schemes was the escalation of the pandemic caused by coronavirus (SARS-CoV-2).

     

    Present: Flexible forms of employment as means of saving employment relations from the pandemic

    The escalation of the pandemic has created a new, unprecedented reality in the field of labor. Businesses whose operations were not suspended by public order were faced with a dramatic reduction in their revenues. The reduction in their productive activity was logically expected to lead to layoffs of redundant staff in order to reduce wage costs.

    Therefore, it became necessary to take urgent measures, which on the one hand aim to protect employees and maintain their jobs, on the other hand to save business activity and the continuation of the operation of businesses, in the light of the protection of public health.

    We have already attempted to decode these measures in our previous articles.

    Among the measures taken to address the effects of the pandemic on workplaces (which we have already addressed), flexible forms of employment play a leading role. The specific forms (differentiated from the ones mentioned above) cover the special needs of businesses and employees created due to the pandemic. Particularly:

    (a) Regarding the safe operation personnel

    Article 9 of LD / 20.03.20 (as specified by No. 13564 / D1.4770 / 30.3.20-Government Gazzette, B ‘/ 1161 / 3.4.2020 MD), provided the possibility of the employer to appoint safe operation personnel. This temporary measure of flexible employment (which we analyzed in our previous article) is similar to the (unilaterally imposed) rotational work. What do they have in common? The alternation of working and non-working days.

    However, the temporary measure of safe operation personnel has distinct application requirements.

    In particular, this measure only applies to businesses that are (depending on the NACE Revision 2 classification of their business activity) among those affected by the pandemic. These businesses are entitled to implement the measure of safe operation personnel. This measure will cover at least 50% of the total staff of the business. In addition: each employee can be employed at least two (2) weeks per month, continuously or intermittently.

    As for the obligations of employers, they owe salaries to the safe operation personnel corresponding to their employment. At the same time, however, they are obliged, for as long as they use the measure, to maintain the same jobs, that is, the same employees and on the same terms. Those who quit or those who retire are exempt from the above provision.

    Relevant to this measure are the subsequently issued No. 13564 / D1.4770 / 30.3.20-Government Gazette, Β ‘/ 1161 / 3.4.2020 MD and 12998/232 / 23-3-2020 CMD (Government Gazette Β’ 1078 / 28-3-2020). However, there are still problems that we pointed out in our previous articles (Coronavirus and Businesses: The obligation to maintain jobs).

    (b) With regard to the transfer of personnel to businesses within the same group

    This measure, like that of safe operation personnel, aims to prevent redundancies. This measure offers flexibility to the employer. This flexibility regards the business in which, in the end, the employee provides their services, regardless of their (initial) employer. Therefore, the deviation from the traditional working relationship model.

    If this measure is utilized (Article 10 LD / 20.03.20), the business affected by the pandemic or the business whose operation was prohibited or suspended is entitled to transfer its staff to another business of the Group to which it belongs. A condition is a relevant agreement between the two businesses involved. In addition, the businesses involved are required to maintain a total of the same number of employees as before the transfer. In this case, the clause excludes those who resigned and retired.

    It should be noted that this measure, although newly introduced, had already been addressed by jurisprudence. The Supreme Court accepted the employment of an employee in other businesses of the same Group as possible. And this, regardless of which business of this Group is an employer (10/2018 CS). We have already addressed this issue in our previous article.

    (c) Regarding remote work

    The need for people to stay home for the protection of public health has highlighted the value of teleworking. We addressed the subject and its importance in our previous article. The points worth stressing are the following:

    LD / 11.03.20 provided for the possibility for the employer to unilaterally determine “… that the work provided by the employee in the place  provided for by their individual employment contract, will be carried out with the system of remote work” (art. 4 par. 2 LD / 11.03.2020).

    The majority of businesses is already taking advantage of the possibility of unilaterally imposing remote work. Teleworking, although temporarily detached from its voluntary nature, has emerged as the most appropriate measure to continue the operation of businesses and the provision of services by employees.

    It should be noted here that in the case of teleworking, the employer is not charged with additional commitments (such as the obligation to maintain the same jobs). However, in this case, the issue of accident at work becomes worthy of attention for the employer. This is because, in the event of a work accident, the employer’s liability is not waived in the case of telework from home. Therefore, it is necessary for the employee to make a statement regarding the safety of the performance of their work from their home.

     

    The future: Flexible forms of employment after the pandemic

    It is a given that flexible forms of employment have, by some, been demonized. However, they did not appear “yesterday” for the first time. (We have also seen that a form of rotational work has been around for almost a century). Nor will they ever leave us. Quite the opposite.

    Flexible forms of employment, regardless of the statute of limitations, are already a reality. Internationally for a long time. Nationally, very intensely, during the last two months.

    Businesses, in order to survive, have focused on reducing their expenditure – flexible or other. The reduction of wage costs is of great importance. And, to a significant degree, it has been achieved by reducing employment. The legislator had already (even before the pandemic) provided several options to businesses. And because of the recent crisis, those options have expanded. And rightly so.

    Utilizing flexible forms of employment has already created a new norm. A reality that is not expected to dissapear with the (not yet visible) end of the pandemic.

    On the contrary:

    Flexible forms of employment, with their now broader part, will help entrepreneurship. They will help tackle the new, rather profound, recession. In maintaining wage and other costs at lower levels. In the (further) modernization of the way businesses operate. In the modernization of labor relations. In their adaptation to current social, economic and technological data.

    Flexible forms of employment will also help to secure jobs. The benefits they recently offered will in time be proven crucial for the national economy (among others). This just not only regard employees. Nor is it limited to national authorities. The European Union has already started heading towards the right direction – especially with regard to reduced working hour schemes.

     

    The reduced work schedules and the SURE Program

    Reduced work schedule schemes are very important in the world of flexible forms of employment. These schemes allow businesses with financial difficulties to temporarily reduce their employees’ working hours. Indicatively, regarding our country: part-time employment, shift work, readiness contracts, Safe Operations Personnel.

    It is logical that these programs raise concerns about employees’ incomes and the insurance of a minimum (tolerable or desirable) standard of living. And it is logical that the employees are not the only ones burdened with these concerns. This issue is also troubling, of course for different reasons, the national and European authorities.

    Because of these concerns, the European Commission has launched a new instrument. More specifically, it has provided temporary support for the mitigation of Unemployment Risks in an Emergency (SURE). SURE aims to protect jobs and employees affected by the coronavirus pandemic.

    In fact, the procedures have already been launched so that the specific instrument can take the form of a Regulation.

    SURE will provide a financial assistance of up to €100 billion in total. This assistance will be provided in the form of loans granted by the EU to the Member States on favorable terms. These loans are expected to help Member States cope with a possible sudden increase in public spending to maintain employment. More specifically, it is intended to help Member States cover costs directly related to the creation or expansion of national systems for reduced working hours and other similar measures established for the self-employed in response to the current coronavirus pandemic.

    The reason for the introduction of this particular medium was the finding that there are many businesses that face significant difficulties because of the pandemic. In order to manage them they are forced, not infrequently, to temporarily suspend or significantly reduce their activity and the working hours of their employees. By avoiding unnecessary redundancies, systems that will reduce working hours can prevent the most serious and long-term negative consequences of a temporary shock to the economy and the labor market in the Member States. In this way, they contribute to the maintenance of household income and to the maintenance of productive capacity and human capital of enterprises and the economy as a whole.

    SURE will provide additional EU support to Member States to finance their systems on a part-time basis. In this way, job protection is expected to be achieved and so is, ultimately, the support of the member states’ economies.

    SURE, albeit temporary, aims to become part of the Commission’s overall strategy to protect citizens and mitigate the extremely negative socio-economic consequences of the pandemic.

    In other words:

    (a) The EU accepts the reduced working hours of employees as a means of managing the crisis on the part of businesses.

    (b) The EU prioritizes reduced working hours (against redundancies) as a means of managing the crisis.

    (c) The EU has already initiated procedures for the financing of Member States in order to make it possible for them to (further) finance reduced working hours programs in order to save jobs.

    Some government announcements have already taken place regarding the use of the facilities offered by this program.

     

    Instead of an epilogue

    Flexible forms of employment are not the worst thing that could happen to us after the pandemic. Let’s not treat them with fear. Let’s not treat them with introversion. Let’s not treat them as a disaster.

    Let’s turn our attention to technology and focus on our own skills. Let’s see it as a chance to move forward. Let’s act positively and be active. Let’s take advantage of the flexible forms of employment and the opportunities they create.

    Could an executive, freelancer or entrepreneur consider not having a laptop? Not being able to use applications for online meetings? Not being able to remotely connect to their business?

    And why should we deny part-time work, rotational work, safe operation personnel?

    Can we, using logical arguments, react when the world seems to be coming to an end? Or even when a particular business is about to close? Or can anyone seriously argue that they prefer to stick to a full-time employment contract that is about to be terminated?

    Let’s not forget, however, that in the end:

    Globalization is not just about others. It’s not just about international business giants. Almost every employee can now provide their services anywhere in the world.

    But also viewed from another point: Almost every employer can “buy” services from employees anywhere in Greece. Or / and the world.

    This is the reality.

    Ostriches have no place in it.

    stavros-koumentakis

    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.

  • Safe Operation Personnel vs Unilaterally Imposed Rotational Work

    Safe Operation Personnel vs Unilaterally Imposed Rotational Work

    Safe Operation Personnel vs Unilaterally Imposed Rotational Work (: crisis management)

    The effort to support entrepreneurship and, in an inextricable link, job security continues, at the legislative level, at a steady, rapid, pace. The recent publication of MD 13564 / Δ1.4770 / 30.3.20- Government Gazette, Β ‘/ 1161 / 3.4.2020 gave us the missing pieces regarding the application of the measure of the Safe Operation Personnel (: article 9 LD / 20.03.20). This measure is, to a large extent, similar to the (Unilaterally imposed) Rotational Work. Therefore, it is necessary to review those two measures comparatively, in order to assist with the application of the optimal, at each case, option.

     

    Introduction

    Labor Law is (and should be) adapting. It is changing and adapting to the current economic and social circumstances.

    The principle at its very core is the protection of the (presumably) weak in the employment relation: the employee.

    In times of crisis and, of course, of economic recession, the goal of Labor Law is to contribute to the maintenance of jobs. Something that is necessary for the development, for which the State is primarily responsible.

    Flexible forms of employment: the tool that seems to be chosen, over time, by the legislature as a means of maintaining jobs. And even more: as a means of balancing the reduction of wage costs and the avoidance of redundancies.

    In the recent past, we have encountered such legislative interventions. Dealing with the financial crisis made such interventions necessary. Law 3846/2010 introduced regulations and amended existing ones concerning, among other things, flexible forms of employment. According to the explanatory memorandum of the law, these provisions are aimed “on the one hand in maintaining the existing jobs, and on the other hand in improving the competitiveness of the Greek economy”.

    Most recent legislative interventions (in the form of Legislative Decrees and Ministerial Decisions this time around) are aiming in this direction.

     

    The specific forms of flexible employment of Safe Operation Personnel and Rotational Work.

    Among the flexible forms of employment, the Rotational Work system is particularly important. Either if it is contractually agreed upon or unilaterally imposed by the employer. The “rotational work” (which we analyzed extensively in our previous article), first appeared with the Act 2000/1939 “On taking measures to combat unemployment. In 1990, the institution of “part-time employment” was introduced (article 38 of Law 1892/1990) – and was legislatively re-approached in 2010.

    The decade of the economic crisis is over. Rotational Work remained a potential business choice. Its purpose? Dealing with a new potential crisis. Unfortunately, a new crisis was not as far as we hoped.

    The coronavirus pandemic is bringing a new recession to the global, this time, economy. Unprecedented measures have been imposed to deal with it. Suspension and prohibition of the operation of businesses and lockdowns are just some of them. It must be stressed that, among other things, the vast majority of businesses have been hit hard.

    The situation of extreme urgency led to the adoption of urgent legislative measures. Another form of flexible form of employment was introduced. Specifically, the appointment, by decision of the employer, of Safe Operation Personnel in the business (article 9 LD / 20.03.20). We have briefly analyzed this scheme in our previous articles. Indicatively:

    This particular form of employment (: Safe Operation Personnel) is similar, as we mentioned in the introduction, to the (unilaterally imposed) Rotational Work. What do they have in common? The alternation of working (and non-working) days. However, these (flexible) forms of employment also present significant differences. This is because the scheme of the Safe Operation Personnel of businesses undertakes to cover extremely urgent and absolutely temporary needs. 

     

    A comparative overview of the Rotational Work scheme and the scheme of Safe Operation Personnel

    The introduction of the Safe Operations Personnel scheme has not suspended (or overturned) the provisions for Rotational Work.

    The right choice between them presupposes a comparative overview of the individual conditions and consequences. This is what we are attempting with the present article.

     

    1. Reduction of the activity of the employer

    1.1. In the case of safe operation personnel

    The reduction of the employer’s activity is not a condition of Article 9 of the LD / 20.03.20. It is, however, considered a given. However, it becomes a prerequisite in the context of no. MD 13564 / D1.4770 / 30.3.20- Government Gazette, Β ’/ 1161 / 3.4.2020. Based on this, the specific measure concerns businesses-employers operating in the affected sectors [as defined in chapter A.2. of no. 12998/232 / 23-3-2020 JMC (B ‘1078 / 28-3-2020)].

    1.2. In the case of (unilaterally imposed) Rotational Work

    The reduction of the employer’s activity is a prerequisite. The concept of the reduction is not specified in law. However, it has been set out in case law. Case law has accepted that the viability of the business must be at risk. However, the (temporary) financial or monetary difficulty of the employer to repay their obligations is not enough. It is required that ” reduction of the volume of the activity” must be such that “there is a surplus of staff due to the reduction of available work”.

    1.3. Conclusion

    All, without exception, businesses whose activity has been affected (depending on the NACE Revision 2 classification of their business activity) may resort to the (unilaterally imposed) Rotational Work system. And even further than that: All businesses that present (for whatever reason) activity reduction.

    In contrast, the Safe Operation Personnel measure has a limited subjective scope (depending on the NACE Revision 2 classification of their business activity). Therefore, it cannot be implemented by all businesses.

     

    2. The organization of work

    2.1. In the case of safe operation personnel

    In this case, the alternation between working and non-working days of the employees who participate in the scheme is provided for.

    (a) Reference period: The reference period is determined exclusively on a monthly basis. Within a month, the employee must be employed (as a Safe Operation Personnel) for at least two weeks. The two-week work can be offered continuously or intermittently. There is no corresponding restriction on Rotational Work. The distribution of the working (and non-working) days/weeks is at the discretion of the employer.

    (b) Number of employees participating: At least 50% of the employees must participate per week in the above way of organizing employment. Consequently: within the same department of a company, some employees may be employed as Safe Operation Personnel and simultaneously others may still work full time.

    (c) Time of organization: The specific organization of working time is performed by the employer once a week.

    2.2. In the case of (unilaterally imposed) Rotational Work

    According to the established case law of the Supreme Court, the system of Rotational Work necessarily requires: ​​(a) alternation of employees of the same business (undertaking or part of business or undertaking), (b) in the same or in more jobs, (c) at different time periods, but at regular intervals, (d) while the business operates continuously.

    In particular, as far as the rotation of employees is concerned, it can involve:

    (a) either groups of employees, one of whom will replace the other in succession in employment and in non-employment,

    (b) or one employee at a time, in the sense that one employee at a time will be placed on a compulsory leave, while the other employee will be employed full-time.

    The organization can be implemented only once, At the beginning of the implementation of the Rotational Work System.

    Compliance with these conditions is important. Without some of them, the implementation of the system would hardly be acceptable.

    2.3. Conclusion

    Both of the above ways of employment present different possibilities and limitations. The needs of the business (in terms of organizing the work) will be crucial in choosing one or the other option.

     

    3. Prior notification and consultation of the employee’s representatives

    3.1. In the case of safe operation personnel

    Pursuant to Article 9 of the LD / 20.03.20, no prior consultation is required in this case.

    3.2. In the case of (unilaterally imposed) Rotational Work

    The previous consultation is a formal requirement of the unilaterally imposed Rotational Work. The process is not simple or quick.

    The employer announces their decision on the forthcoming application of Rotational Work. Also, the place and time of the consultation. They also inform employees (either directly or through their representatives) of the reasons that make it necessary to impose this scheme.

    From the time of the invitation to the consultation until the time it is held, the necessary time (for the preparation of the employees) must have elapsed. The subject of the consultation will be the exchange of views on the problems that have arisen. Also: for the appropriate measures to be taken.

    The successful outcome of the consultation is not a requirement. Not even the employee-employer agreement. However, it is not possible to omit the consultation. In any other case, the Rotational Work becomes illegal. The risk? That it will be interpreted as a unilateral detrimental change in working conditions.

    Under the current circumstances, teleworking basically dominates the Greek reality. This consultation now has additional practical difficulties. However, we cannot rule out its implementation through teleconferencing systems.

    3.3. Conclusion

    The consultation when unilaterally imposing Rotational Work is pointless. But it remains a formal requirement. Under the current circumstances: undoubtedly more difficult.

    On the other hand, the selection of the measure of Safe Operation Personnel does not presuppose any, not even an apparent, consultation. One moment the company will decide on the measure, the next it will start its implementation. Time in some cases can prove valuable…

     

    4. Maximum duration of the imposition of Rotational Work

    4.1. In the case of safe operation personnel

    The application of this measure may not exceed 20.09.20 (Article 9 LD / 20.03.20). MD 13564 / D1.4770 / 30.3.20- Government Gazette, Β ’/ 1161 / 3.4.2020 sets an interesting time limit: Businesses that may designate Safe Operating Personnel, are entitled to use this measure“ for as long as they are affected ”.

    4.2. In the case of (unilaterally imposed) Rotational Work

    The duration of this measure may not exceed nine (9) months within the same calendar year.

    4.3. Conclusion

    The Safe Operation Personnel measure seems temporary and short-lived.

    On the contrary, the unilaterally imposed Rotational Work is intended to cover longer-term crises.

     

    5. Registration of the employer’s decision in ERGANI

    5.1. In the case of safe operation personnel

    The affected businesses, which will utilize the above measure, are obliged to declare it to ERGANI within the first ten days of the month following the application of the above mode of work.

    5.2. In the case of (unilaterally imposed) Rotational Work

    A prerequisite (for the legality) of the imposition of a Rotational Work system is the notification (via an electronic submission) of the relevant decision within eight (8) days, from the preparation or its receipt, to ERGANI.

    However, according to Article 4 of the 11.3.2020 LD, the obligation of the Employer to inform ERGANI of “any change or modification of the working hours or organization of the working hours of the employees” was suspended. The respective updates must take place collectively within the first 10 days of each following month. Of course, the issuance of a MD is expected for the specification of the application of the provision.

    5.3. Conclusion

    The (consolidated and retroactive) registration in ERGANI of the changes in the working hours and the way of organizing the work is an obligation of the employer for both of the above flexible forms of work.

     

    6. Obligation to maintain the same number of employees as the one employed at the beginning of the implementation of the measure

    6.1. In the case of safe operation personnel

    In case the employer chooses the application of the specific measure, they undertake a very heavy obligation. Specifically: to maintain the same number of employees who were employed at the beginning of the implementation of the measure for as long as the measure was implemented. In other words, they are obliged to maintain the same employees and, in fact, under the same working conditions.

    Employers are therefore explicitly prohibited from terminating employment contracts for all of their staff and, in the event of its occurrence, such termination is invalid.

    However, the obligation to maintain the same number of employees excludes the termination of an employment contract due to resignation or retirement.

    Exceptions, however, are not enough. Although in a previous regulation regarding the suspension of employment contracts (article 1 §5 of chapter A2 of No. 12998/232 / 23-3-2020 JMC (Government Gazette B ‘1078 / 28-3-2020), fixed-term contracts that expired are also excluded from the concept of “the same number of jobs”, there is no corresponding exception for the measure of safe operation personnel. However, this omission sometimes leads to (absolutely) unfair solutions, not just simple contradictions (as we analyzed in a previous article). Indicatively: What will happen when a certain fixed-term contract expires? In how much time does the employer have to find a replacement (or replacements) of these employees, which, ipso facto, the contract is terminated within the period of the implementation of this measure?

    In any case, the reason for this measure is the safeguarding / securing of jobs. The employer is (reasonably) not entitled to make any dismissals.

    6.2. In the case of (unilaterally imposed) Rotational Work

    There is no obligation of the employer to maintain the same number of employees at the beginning and end of the implementation of this measure.

    Of course, even when the rotational work scheme is enforced, the employer’s ability to dismiss is significantly limited. The restriction, however, is not absolute. In particular, the jurisprudence has ruled that “… the fact that the enforcement of the rotational work scheme is provided as a measure instead of terminating the employment contract and the purpose of enforcing the rotational work system, which is basically the maintenance and not the termination of the employment relationship , it is clear that —at least in principle— the combination of this system with the termination of the employment contract is excluded… This means, on the one hand, that the termination of the contract is not permitted in principle during the enforcement of a rotational work system, and that the enforcement of this scheme does not allow for a simultaneous implementation of rotational work after the termination of the employment contract or during the course of that period (ie in case of regular termination). In the event that the employer terminates the employment contract without proving the assistance of a reason that exceptionally justifies it, the termination will be illegal and therefore invalid.”  (1091/2016 Court of First Instance of Athens).

    Therefore, if there is a justifiable reason for the termination, despite the imposition of the rotational work system, the termination will be permissible.

    6.3. Conclusion

    Both measures are aimed at safeguarding jobs. The first one – (: Safe Operation Personnel) aims at exactly that. However, omitting the inclusion of fixed-term contracts in the exceptions from the concept of “maintaining the same number of employees” when implementing the measure of safe operation personnel will certainly make its implementation problematic.

     

    7. The sanctions

    7.1. In the case of safe operation personnel

    In case of violation of the aforementioned obligations of the employer, it would be possible, under certain conditions, to claim that the loss of benefits from the extension of the payment of: (a) insurance contributions due (JM 13226/325- Government Gazette BD / 1044 / 26.3.20 ), (b) certified and overdue debts and installments (MD Α1053- Government Gazette Β΄ / 949 / 26.3.20) and (c) certified and overdue debts and installments from VAT (MD Α1054-Government Gazette Β΄ / 950 / 26.3.20 ). Employees are also given the opportunity to consider the imposition of this measure as a detrimental change in their working conditions.

    7.2. In the case of (unilaterally imposed) Rotational Work

    On the contrary, the breach of the relevant obligations of the Employer has no corresponding penalties. Its most important result: the ability of employees to consider its imposition as a detrimental change in their working conditions.

     

    Times are demanding “crisis management”.

    On an international and national level. Even on a personal one. All the more so at the level of each business.

    The burden of those who are called upon to make the best decisions is heavy.

    The focus is on the survival of the people.

    Then follows in the survival of the businesses. And, of course, of the jobs.

    In any case: It is up to the entrepreneur to adopt the best options for their business. And, of course, the most appropriate measures.

    What seems to be the most important (under the current circumstances) measure, is that of the Safe Operation Personnel. However, the relevant regulations prove to be incomplete. Some of them are problematic and potentially dangerous.

    The introduction of the measure of the Safe Operation Personnel does not preclude the unilaterally imposed Rotational Work.

    The adoption of the applicable measure, as the case may be, is the responsibility of the entrepreneur. Its careful implementation, in order to avoid the most severe sanctions, is also theirs.

    Us, advisers, carry the responsibility to best understand the existing institutional framework.

    To advise on the best option among the available measures but also on their correct application.

    And, lastly, to assist on the most difficult (under the current circumstances) work of entrepreneurs, the top management and of course the HR managers…

    Everyone’s goal remains the same (after ensuring the life and health of the general population):

    The survival of business.

    And, of course, the survival of jobs…

    stavros-koumentakis

    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.

  • Coronavirus: the invisible(;) enemy of jobs

    Coronavirus: the invisible(;) enemy of jobs

    Coronavirus: the invisible (?) enemy of jobs (: dismissal prevention measures)

    I. PREAMBLE

    1. The pandemic COVID-19 is in full swing.

    Its end is not, in any case, visible.

    The global health crisis is, for all of us, unprecedented. It will inevitably lead the world economy to a recession. And, of course, the national economy as well.

    The vast majority of businesses are experiencing the dramatic consequences of the pandemic. Entrepreneurs (and those with corresponding responsibilities) are looking (sometimes desperately) for ways to survive.

    The most important challenge we all must face is to safeguard life and health.

    Immediately after: the survival of the national economy, of the businesses. Last, unfortunately, in order: the survival of employment relations.

    In our country, soon after the confirmation of the first cases, there has been significant turmoil in the labour market (one could more accurately call it panic).

    2. The administrative measure of suspension of operation of specific businesses (: necessary to prevent the spread of the virus) consequently resulted in a large number of redundancies.

    March is already showing a negative balance in the labour market. According to the government, layoffs exceeded 40.000 in the first two weeks of March. According to the opposition, 110.000. The numbers are dramatically high.

    Stopping the phenomenon constitutes a national emergency. Legislative intervention has been necessary to achieve the halt. A Legislative Decree was issued on the 20.3.2020  (Government Gazette A 68 / 20.3.2020) –Emergency measures to address the consequences of the COVID-19 coronavirus spread, to support society and to ensure the smooth functioning of the market … This Decree introduces, inter alia, new regulations to employment relations. It introduces measures to prevent dismissals and suspension of employment relations.

    3. The specific measures (preventing dismissals and suspension of employment relations) concern:

    (a) Businesses whose operations have been temporarily prohibited.

    (b) Businesses which operate in sectors that (according to the Ministry of Finance) are severely affected by the pandemic.

    The above Legislative Decree has already been analysed in a previous article (: “Coronavirus and Business: The Second Decalogue For Businesses and Employment Relations“).

    However, it is necessary to take a more careful look into saving as many jobs as possible.

    For the benefit of the national economy and businesses. And, of course, for the benefit of the employees and the community as a whole.

     

    II. THE MEASURES

    1. Employment relations with businesses suspending their operation (by decision of a public authority)

    (a) Suspension of operations

    Enterprises operating in specific sectors, which have been placed under a temporary ban or have been suspended by decision of the Administrative Authority (e.g.- student tutoring centers, private schools, retail outlets).

    The financial blow they suffer is unquestionable.

    The first (reasonable) thought of those responsible was to mitigate the economic impact. The reduction of expenditure. Especially of the wage costs.

    (b) The prohibition (and invalidity) of dismissals

    In order to halt dismissals, businesses whose operation was suspended were prohibited by law to dismiss their employees.

    The abovementioned (under I) Legislative Decree stated, in particular, that: “Businesses – employers who suspended their operation by order of a public authority, and for as long as the COVID-19 measures are in place, shall be obliged not to reduce their staff by termination of employment contracts ”(Art. 11 par.1(a)).

    Nevertheless, in the case of non-compliance and termination of employment contracts (from the part of the business concerned), the invalidity of such is provided for (Article 11 par.1 (b)). The nullity of dismissals is retroactive. It, retroactively, covers those dismissals that have taken place from the 18th of March.

    (c) The “reward” to balance out the prohibition of dismissals

    In return for the above (under b) prohibition of dismissals, the aforementioned companies are not required to pay wages at the time of suspension of their operation.

    Their employees, on the other hand, are entitled to emergency financial assistance (provided for by the state) of € 800 (special purpose remuneration).

     

    2. The operation of businesses with safe operation personnel

    The measure providing for the safe operation personnel is another measure to prevent dismissals. It concerns (as per the Legislative Decree of 20.3.2020) all businesses. Information leaks from the Ministry of Labour imply that the Ministerial Decision that will provide for the details of implementation of this measure will limit its scope. Specifically: that it will only concern the businesses that are operating in the sectors that are on the Ministry’s list of the sectors affected. This measure will provide for fewer days (and therefore weeks) of employment per month, alternating between working days (or full weeks) and non-working days, at the decision of the employer. At its core, it is therefore similar to the measure of a unilaterally imposed rotational work. However, the conditions of the implementation of this measure laid down in the Decree (Article 9) significantly distinguish this measure from that of the unilaterally imposed rotational work.

    In particular, the conditions for its implementation concern: (a) The minimum monthly employment of employees. (b) The minimum number of employees who may be subject to the measure. (c) The maximum duration of the measure.

    Specifically:

    (a) The employee who will work as Safe Operation Personnel shall be employed for a minimum of two (2) weeks per month. Continuously or intermittently.

    (b) At least 50% of the staff of the business must be designated as safe operation personnel. Therefore, the business should employ the employees that have not been designated as safe operation personnel full time. The exact organization of work time can be determined on a weekly base.

    (c) The implementation of the measure of operation of a business with safe operation personnel cannot be permanent. This measure can be implemented until 20.9.20, at the latest.

    At the same time, the employer has two obligations.

    The first concerns the declaration of the implementation of the measure on ERGANI. It must be declared at the end of each month.

    The second obligation is of utmost importance. The employer who chooses to operate their business with safe operating personnel is required to retain their employees.

    Details are expected to be determined by a decision of the Minister of Labour and Social Affairs.

     

    3. The transfer of personnel to companies within the same group

    It is an additional measure in the (national) effort to prevent redundancies.

    Under the current legal framework, the company is entitled to transfer its staff to another company of the same Group (to which it belongs). The courts have already dealt with this issue, despite the measure being newly introduced. The Supreme Court accepted the possibility of employing employees in different companies in the same group. And that, no matter which company in the Group is the employer. We have already analysed this issue in a previous article (: employing employees in companies of the same group)

    Article 10 of the Legislative Decree of 20.3.20 (expressly) provides for the possibility of transferring staff to companies within the same Group. This provision has limited application. It concerns, in particular:

    (a) Companies affected by the Covid-19 pandemic

    (b) Companies whose operation has been suspended by the competent authorities in response to the pandemic

    The Legislative Decree imposes specific obligations on the companies concerned.

    The first obligation is the existence of a written agreement between the companies.

    The second requires the maintenance, in total, of the same number of employees as before the transfer.

    Details are expected to be determined by the Ministerial Decisions to be issued.

     

    4. Employment relations in businesses that are (significantly) affected by the pandemic

    (a) Affected sectors and the regulation of employment relations

    On March 20, the Ministry of Finance announced the classes of the NACE Revision 2 affected by the spread of coronavirus. The list is constantly expanding.

    Although these businesses are allowed to operate, unfortunately, given the circumstances, they run at a low capacity. In order to avoid dismissals, as a result of the reduction of their business activity, the option to suspend part or all of their employment contracts was also provided to these businesses. Specifically:

    (b) Suspension of employment contracts and related obligations of the employer

    (i) The individual characteristics of the suspension of the employment contract

    This is a measure which is introduced in the Greek legal order for the first time. It is similar to unpaid leave. However, during its implementation, it does not affect the acquired rights of employees (as this time seems to be taken into account, for example, when calculating the time of service and retirement). In this case, the maximum duration of the measure is one month. However, it can be extended (provided a relevant JMD is issued).

    (ii) The option

    Affected businesses have the option to choose whether or not to suspend (part or all of) their employment contracts. However, if they so choose, the termination of employment contracts is expressly prohibited. And that goes for all their staff.

    (iii) The prohibition and invalidity of the redundancies

    Nevertheless, in the case of non-compliance and termination of employment contracts (from the part of the business concerned), the invalidity of such is provided for

    (iv) Maintaining jobs

    In addition to prohibiting the termination of employment contracts for undertakings which opt for the suspension measure, there is an additional, quite important, obligation. The Decree provides that “… after the expiry of the suspension of the employment contracts, they are required to maintain the same number of jobs for a period equal to that of the suspension”. In other words: even if the aforementioned businesses fire an employee, they must hire another employee in its place. And this goes for as long as the suspension lasts and for a period equal to that, after the suspension expires.

    Accordingly, in the event of an expiration of a fixed-term employment contract (and therefore of its automatic termination), there are two possibilities. Either its renewal will have to take place, or another employee has to be hired at the place of the one whose contract expired.

    (v) Special purpose remuneration

    Employees of companies that make use of the option to suspend employment contracts are also entitled to a special purpose remuneration.

    According to the MD No. 13031 / D1.4551 (Government Gazette 994 / 23-3-2020), employers who declare to ERGANI employees whose contract is suspended, should state that their core business activity has been suspended (!). This is despite the fact that this requirement does not derive from the relevant Legislative Decree. We want to believe that this is, obviously, an unfortunately worded text.

     

    III. What about the dismissals that have already taken place?

    The validity of the dismissals that took place until 17/3/2020 is not affected. However, dismissed employees (or employees who resigned), within the period from 1 to 20 March, are entitled to the special purpose remuneration (article 11 par. 2B. (b) Decree of 20.3.20).

     

    IV. Special purpose remuneration and employer obligations

    (i) Special purpose remuneration and its characteristics

    Suspension of business and suspension of employment creates a new reality in employment relations. For reasons of force majeure, no service is provided by employees. As a result, the salaries cannot be paid (by the employer). It was necessary to provide employees with emergency financial aid. This is what the “special purpose remuneration” is. It is of the amount of 800€ and it covers 45 days.

    The cost of paying the above compensation is covered by the state budget. And so is the insurance coverage of employees (article 11 par.2B (f) Decree of 20.3.20).

    It is also important to note that the special purpose remuneration cannot be seized and it is tax-free. Also: it is not offset against any debt.

    (ii) The (related) obligations of employers

    The employers must submit the Analytical Periodical Statements of their employees, whose contracts have been suspended. The cost of their full insurance coverage is calculated on their nominal wages.

    In order for the employee to receive the special purpose remuneration, the employer must follow a specific procedure as provided for in the Legislative Decree (article. 11 par. 2.C. a, b, c, d) and the MD No. 13031 / D1.4551 (Government Gazette 994 / 23-3-2020).

    In particular, the employer is required to submit an official declaration to ERGANI, mentioning the employees whose employment contracts are suspended: (a) either because of the prohibition of their operation, ordered by a public authority, (b) or because of the utilization of the measure of suspension of employment contracts by the affected business.

    In addition, the employer is required to include in the official declaration those employees whose employment contracts have been terminated from 1 to 20.3.20. As already discussed, the provision of the Legislative Decree in this case concerns contracts terminated: (a) either following a complaint by the employer, (b) or because of the employee’s resignation.

    The employer is obliged to notify the employee within the day of submission of the official declaration. The notification shall be on paper or electronically. It must, in any case, include the registration number of the relevant act on the ERGANI platform.

    (iii) Violation of the employer’s obligations

    Failure to submit the above official declaration by the employer does not have serious, damaging, consequences. In particular, an employer who fails to provide an official declaration will not enjoy the suspension measures of facilitations or instalments or partial payment facilities of any type of certified debt they may owe to the State.

     

    V. In conclusion

    The decade of the financial crisis brought a heavy blow to entrepreneurship.

    Businesses are called upon to face a new crisis.

    Probably deeper.

    We hope it will be a short-term one.

    Employment relations are being re-tested.

    The state is doing, at least for now imperfectly, its duty. It protects employees to a significant extent. It is assisting some of the affected businesses.

    The pandemic is inevitably linked to an economic downturn. We are already experiencing it. We hope it will also be short-lived.

    The protection of employment relations (sooner or later) will decline. And it must. Let dismissals be the last measure employers will adopt. All the more mild measures continue to exist, uninterrupted.

    Employers can always make other choices before deciding on making dismissals: (a) conversion of full-time to part-time employment contracts; (b) the agreement (or enforcement) of rotational work (or) the agreement (or enforcement) of suspension

    And, of course, those discussed above.

    The negative balance of employment in March will hopefully be a small (bitter) bracket.

    For the benefit of the national economy and growth.

    stavros-koumentakis

    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.

  • Coronavirus and Businesses: a second decalogue for businesses and employment relations

    Coronavirus and Businesses: a second decalogue for businesses and employment relations

    Coronavirus And Businesses: The Second Decalogue For Businesses And Employment Relations (:Tough Times And Business Opportunities)

    I. PREAMBLE

    1. The Pandemic Is “Going Strong” – (And) The Legislation Is Struggling To Keep Up And Manage It…

    The pandemic (: COVID-19 infection) has, logically, not yet reached its peak. In order to deal with it, our country has already introduced a great number of regulations. The problems that businesses face are many and vary. The most important amongst them are those relating to salaries and the management of employment relationships.

    The first “wave” of the relevant regulations (including the 11.3.20 Decree and 14.3.20 Decree) have already been briefed in our previous (published on the 15.3.20) article (and related newsletter): “Coronavirus and Business: The First Decalogue on their Operation and Employment Relations”).

    2. The Most Recent Legislative Decree of 20.3.20

    The Legislative Decree (Government Gazette A 68 / 20.3.2020) of 20.3.2020) – Urgent measures to address the consequences of the COVID-19 coronavirus spreading risk, to support society and to ensure the smooth operation of the market…

    The issues raised are many and important. This also applies to businesses.

    The pressure under which the legislator worked (and, therefore, the relative obvious legislative flaws) was evident. Some of the individual provisions require interpretative approaches. They therefore pose significant legal and financial risks for businesses.

    In the present article, we are attempting to mitigate the individual risks and take advantage of the facilities provided.

    We highlight, once again, that information and utilization of said information are important. But above all, important is the sober management of particularly complex and dangerous situations.

     

    II. Coronavirus And Business: TEN, next (critical), QUESTIONS

    Question 1: Can Employees be Dismissed During This Period?

    NO

    • [:It is important to note, however, that the prohibition of dismissals only applies to undertakings which suspend their business on the order of a public authority. Any dismissals made by these businesses are void and have no results. This invalidity covers dismissals from 18.3.20 onwards].

    YES

    • [:The above prohibition does not apply to other businesses. For them, the pre-Covid -19 status applies].

     

    Question 2: Is Suspension of the Employment Relationship Possible?

    “Should I start laying employees off?”

    • (: Entrepreneurs’ first thought for the mitigation of the adverse effects of the Covid-19 pandemic).

    Are there alternatives (choices other than dismissals)?

    • We have already dealt with other, intermediate / more mild, measures – for which we have recently published articles. Indicatively:

    (a) the conversion of full-time to part-time contracts

    (b) the agreement (or enforcement) of rotational work

    (c) the agreement (or enforcement) of suspension

    Suspension of employment contracts – a new alternative to dismissals

    • In order to avoid layoffs and mitigate the adverse effects of the Covid-19 pandemic, a new tool is provided to the employer. Specifically: the possibility of the employer to unilaterally suspend their employment relationships.

    Which businesses are affected by this measure?

    • Those that are, according to the Ministry of Finance and depending on the class of the NACE Revision 2 of their main activity, in sectors affected by the spread of the Covid-19 pandemic.

    What is the content of this measure?

    • The above mentioned affected businesses have the right to unilaterally suspend (from 20.3 to 20.4.20 with the possibility of extension by ministerial order) employment contracts with part of their staff (or even all their staff) in order to adjust their operating needs in the challenging environment created.

    What are the restrictions on the right to suspend employment contracts?

    • Companies that will make use of this provision:
    • are prohibited from laying employees off during the aforementioned period (from 20.3 to 20.4.20) and
    • are obliged to maintain at the end of the suspension (for an equivalent period of that of the suspension) the same number of jobs. If an employee is fired, another employee should be hired. If the fixed-term contract expires, either its renewal will have to take place or another employee has to be hired at the place where the contract expired.

     

    Question 3: The Operation Of The Business With “Safe Operation” Personnel Feasible?

    Is this a new measure?

    • Virtually no. This is a more specific arrangement in the context of rotational work. As long as there is a relevant agreement between the company and the employee, no restrictions apply. If the employer unilaterally imposes the measure, the(below) provisions of the specific Legislative Decree apply.

    Which businesses are affected by this measure?

    • The purpose of this measure is to mitigate the adverse effects of the pandemic on businesses as a whole.
    • What is the content of this measure?
    • The business that chooses to unilaterally enforce it “within the framework of measures introduced to address and limit Covid-19” is entitled to designate the safe operation personnel.
    • What are the obligations of the business / employer?
    • employ (continuously or intermittently) every employee for at least two weeks with a each month; and
    • Include at least 50% of the staff in the above way of organizing the operation of the business (to be determined weekly). (That is, it is required to employ the rest of its staff full-time).
    • declare to “ERGANI” the implementation of this measure

     

    Question 4: Is The Transfer of Employees Within A Group Allowed?

    Is this a new measure?

    Which businesses are affected by this measure?

    • Those whose activity has been affected by the Covid-19 pandemic
    • Those whose operation has been suspended by the competent authorities in responding to the pandemic (‘on the basis of the existing regulatory acts’)

    What is the content of this measure?

    • The company that chooses to utilise it is entitled to transfer its personnel to another enterprise of the same Group (to which it belongs).

    What are the obligations of the businesses involved?

    • The above-mentioned companies of the same Group (: old and new employer) are required to enter into a written agreement.
    • The undertakings concerned, according to the above, are required to maintain, in total, the same number of employees as before the transfer.

     

    Question 5: What Is The Fate Of The (Common) Leases And Leasing Rates That Businesses Pay For Their Employees? (And, of course, For Themselves…)

    Who is affected by this measure?

    • Businesses whose operation has been suspended or banned by the competent authorities in response to the pandemic

    What is the content of this measure?

    • The lessee of establishments that house the above businesses is exempt from the obligation to pay 40% of the total rent for the months of March and April 2020. Partial non-payment of the rent does not give rise to the right to terminate the lease or any other civil claim.
    • The same applies to the case of (common) leases and leases paid by businesses for the benefit of their employees [who have been using (for rent) mobile and / or real estate property for professional use only].

     

    Question 6: Which Individuals Affiliated With Businesses Benefit From The Debt Suspension Towards The State?

    Who is affected by this measure?

    • Employees of businesses affected by the pandemic
    • Landlords who lease property to businesses whose operation has been suspended or banned by the competent authorities in the context of dealing with the pandemic.
    • [By decision of the Minister of Finance the application of this measure may be extended to other categories of individuals who are financially affected by the pandemic].

    What is the content of this measure?

    • Under the specific provision, the above individuals are also enjoying a suspension of their obligation to pay debts to the Tax Authorities and audit centers. Also, of the deadlines for the payment of instalments of established debts (established for businesses under the Decree of 11.3.2020)
    • No interest or surcharges shall be charged during the extension of the time limit and the suspension of the payment of the above debts and time limits.

     

    Question 7: Who Are The Eligible Employees of Emergency Financial Assistance? What Are The Related Obligations Of Employers?

    Who is affected by this measure?

    • Employees whose employment contract is suspended either because of the suspension of the business by a public authority or unilaterally decided by the employer (see Question 2 above)
    • Employees whose employment contract has been terminated either by termination or resignation from 1.3.2020 to 20.3.2020

    What is the content of this measure?

    • The aforementioned persons are entitled to exceptional financial assistance as a special purpose allowance covered by the state budget.

    What are the employer’s obligations?

    • to submit the Detailed Periodic Declaration of the employees suspended (calculating their insurance coverage on their nominal wages),
    • to submit a declaration to ‘ERGANI’, stating the employees whose employment contracts are suspended either because of the prohibition on operating the company or in the context of their unilateral decision (Question 2) or that the employees whose employment contract is has been terminated from 1.3.2020 to 20.3.2020 and
    • disclose the above declaration to any employee involved (the disclosure must take place on the same day in paper or electronically and include the registration number of the submission on “TOOL”)

    What if the employer violates their (related) obligations?

    • In the event that the employer / business fails to submit the above declaration, he / she is excluded from being subject to suspension measures of instalments or partial payment facilities and any type of certified debt to the State.

     

    Question 8: What Are The Required Occupational Physician’s Qualifications? (The Value of Human Life Exceeds, At Last, Against Guild Pressures…)

    The troubled past …

    The contribution of the occupational physician is particularly critical in the present circumstances. Critical, in particular, for safeguarding human life.

    (Legislative) anchors of the very recent past (associated with bad guild practices) have created serious problems in choosing an Occupational Physician. The selection of an occupational physician (who did not have this specialty – although included in the Special Directories) required a confirmation from the relevant Medical Association that there was no Specialist available in his area (!!!)

    … and the hopeful present

    These (absolutely imperative) needs have forced us to return (at least to some degree) to logic. Specifically:

    • Specialist occupational physicians are entitled to perform their duties (also) outside the territory of the Medical Association to which they belong.
    • Doctors who hold any specialty, other than that of the occupational physician, and who have worked as occupational physicians before 15 May 2009, are entitled to perform the same duties in the district of the Medical Association to which they belong.
    • Doctors with no qualifications (who have been practicing occupational medicine in companies continuously for at least seven (7) years until 15.5.2009), are entitled to perform the same duties in the district of the Medical Association to which they belong.

     

    Question 9: Are Further Support Measures Expected for Freelancers, Self-Employed and Owners of Sole Proprietorships?

    The Decree of 20.3.2020 provides:

    • the adoption of a Joint Ministerial Decision by the Ministers of Finance, Development and Investment and Labor and Social Affairs laying down the terms, conditions and procedure for financial support measures for freelancers, self-employed, and owners of sole proprietorships; and
    • the decision of the Minister of Labor on these persons concerning the suspension of the payment of their social security contributions, the arrears to social security institutions and the installments or facilities for the payment of social security contributions.

     

    Question 10: How Are Unemployed Individuals Supported?

    The duration of unemployment benefits (regular subsidy to long-term unemployed, self-employed unemployment benefit) for those beneficiaries whose right expired or will expire within the first quarter of 2020, is extended to 31.5.2020.

     

    III. In conclusion

    The pandemic COVID-19 is in progress.

    The end is completely unpredictable. And so are the consequences for businesses.

    The State (proves that) is following the developments.

    Entrepreneurs must, for their part (and with the assistance of the appropriate consultants), be informed of the contents of the regulatory flood. To (re)adapt their (and their business) strategy.

    And so should the top management – and, of course, HR managers. Everyone has a heavy load to carry.

    Choosing the right measures to manage (rigid) wage costs is not easy.

    Tools are available. Redundancies or teleworking are not the only ones.

    It is up to all of us to choose the most appropriate tools for each business. And of course, the correct interpretation of the tools chosen. As well as, obviously, our careful alignment with what the law stipulates.

    We have mentioned it before: What matters is human life.

    Immediately after that: ensuring the survival of businesses – an event necessary for (decent) human survival.

    stavros-koumentakis

    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.

  • Executives (and their “bras de fer” match with the business)

    Executives (and their “bras de fer” match with the business)

    I. Preamble

    Bras de fer (:”iron arm”) is the well-known game of muscle power (arm wrestling). Two opponents rest their elbows on a horizontal surface (eg a table) and hold each other’s palms. The winner is the one who manages to bend their opponent’s arm outwards.

    It is a game of power. The strongest wins. The one who has an arm (: bras) of iron (: de fer). External help is out of the question.

    What if we, hypothetically, considered that an employer and employee played this game?

     

    II. The inequality (?) in employment relationships and labor law

    The employment relationship is (said to be) an unequal relationship. This is because, as a rule, it is the employer who (seemingly) has the power. They are, after all, empowered to give orders to their employees. Particularly with regard to the place, manner and time that work will be provided.

    This unequal relationship is offset by labor law. Its provisions are highly protective of employees. They also provide for serious barriers to the freedom of contract. Their main concern is to protect employees and prevent their financial exploitation.

    The protection of employees is dictated by the (essentially) inability of the employee to operate on an equal footing with their employer and to adequately defend their rights.

    Therefore, in a possible “bras de fer” employer-employee match, labor law acts as “outside help” for the latter. This is despite the fact that the employer carries, undiminished, the business risk. And of course, the relevant (potentially) adverse consequences that go with it.

     

    III. Executives and labor legislation

    But what is the role of labor law for that category of employees who are not in a position comparable to others? For those whose duties are similar to those of their employers? For those who are heavily involved in the formulation of business strategy and policy? For those whose position is not so disadvantaged compared to their employers?

    It is reasonable to assume that these employees have a good bargaining power. How can they, on top of that, satisfactorily safeguard their rights?

    This is the category of employees designated as “executives”. For the executives, labor law reserves only limited protection.

    But it is precisely the restriction (by law) of the protection of this category of employees that renders the careful characterization of an employee as an executive necessary.

     

    IV. The designation of an employee as an executive

    1. The legislative “introduction” of the concept of executive

    The restriction of the protection of executives is not recent. And it does not apply just in Greece. The 1919 Washington International Labor Convention “On the Restriction of Working Hours in Industries and Enterprises” introduced the restrictions. This Convention was ratified by Law 2269/1920. It takes precedence over any other provision of law (Article 28 (1) of the Constitution).

    The Washington International Labor Convention regulates the work time limits (Article 1). However, it excludes from its scope persons who hold “… a supervisory or managerial position, or a position of trust” (Article 2.a’).

    This wording is extremely broad. In addition, the structure that businesses now have (turnover expansion, business groups, etc.) is creating more and more supervisory, managerial positions and positions of trust, which are filled by employees. A literal (and most likely fair) interpretation would lead to a large number of employees being exempt from the protective provisions of labor law. The relevant limits for its application are, however, interpreted by case-law.

    2. The jurisprudential definition / restriction of the concept of executives

    The jurisprudence of the Greek courts has already defined (and also restricted) the concept of executives. It could be said that it is now widely accepted that “…persons having a supervisory or managerial position or a position of trust are those who, because they are highly qualified or trusted by the employer, are entrusted with the duties of a general manager of the business or of a sector of the business, as well as  staff supervision, so that they not only have a decisive influence on the direction and development of the company, but are also clearly distinguished from other employees because they exercise employer rights to a large extent, including the recruitment or dismissal of employees, the undertaking of criminal liability relating to possible non-compliance within the business with laws that protect the employees and making important decisions that affect the pursuing of the goals of the employer, and who are usually remunerated by salaries far exceeding the minimum wage or the remuneration paid to other employees.” (indicatively: SC 249/2019, SC 1467/2012, SC 74/2011, Court of Appeal of Piraeus 480/2015).

    Thus, according to the assumptions of the Greek courts, the prerequisites for one qualifying as a manager (and inherent to the concept) are:

     (a) The exercise of managerial duties that are essential to the very existence of the business. Alternatively (or cumulatively) the occupation by the employee of a highly confidential, executive or advisory position in key areas due to their “…high qualifications and special skills of high education and specialization” (Court of Appeal of Piraeus 480/2015).

     (b) To possess significant initiative when exercising their duties and to freely exercise strategic decision-making, to be capable of influencing the future and evolution of the business.

    3. Particular indications for the designation of an employee as an executive

    Courts, (including the Supreme Court), take into account other (in addition to the above-mentioned, under 2) indications, in order to accept that an employee is an executive. These indications can be summarized as follows:

    (a) The amount of remuneration

    The remuneration of executives must be particularly high. There are no absolute approaches (and there, of course, could not be any). The comparison measure (must) be twofold: (i) the minimum legal salary of the post in question and (ii) the remuneration of other employees in the company concerned. 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 (SC 1148/2017, SC 747/2007).

    From another point of view, however: It is not possible to be an executive and not receive a high salary. This element cannot be missing when designating an employee as an executive. It is assumed that the substantially increased earnings balance out the highly increased obligations of the employee. And of course, the limited protection under labor legislation.

    (b) The exercise of employer powers over other employees.

    Executives shall be entitled to exercise employer powers. The executive shall exercise them in a manner an employer would. A typical example of such power (but not always of crucial importance) is the ability of the employee to freely decide on the recruitment and dismissal of other employees (SC 1148/2017).

    (c) No control over the time frames during which the job is provided

    An indication that an employee is an executive is their independence in terms of the time they provide their job. Also, that they do not have specific working hours (SC 1467/2012).

    (d) Granting the employer’s power of attorney in dealing with third parties

    This indication, though worth mentioning, is of limited relevance to the assessment in case-law.

    (e) The undertaking of criminal or civil liability on behalf of the employer in connection with violations of labor law

    In this case, however, the Court has to check whether these responsibilities are inherent in the position of the employee or whether they are merely a transfer of the employer’s responsibility (SC 74/2011).

    The above indications [under (a) to (e)] need not be cumulative in order for an employee to be an executive. It is important to note, however, that the employer-employee agreement on the latter having the title of an executive is irrelevant. The concept of an executive’s role “… is defined on the basis of objective criteria of good faith and common experience and logic by the nature and type of services that are considered as a whole, as well as by the particular relationship of the one providing the work and the employer, as well as the other employees.” (Indicatively SC 935/2017, SC 74/2011).

     

    V. The consequences of an employee being designated as an executive

    1. Legislative and jurisprudential consequences

    Special attention is paid, as already mentioned, to the designation of an executive. This attention is drawn because of the legal consequences of this designation. Among them, the non-submission of executives to protective provisions of labor law. The exceptions to these provisions are either expressly provided for in law or have been formulated by case law.We have already seen (under IV.1 above) that the legislature explicitly exempts managing officers from specific legislative provisions. Specifically those relating to working time limits, night work, Sundays or other rest days. Executives, in this context, are not entitled to additional remuneration or compensation for overtime – legal or not (SC 74/2011).

    Case law, however, has extended the above exceptions. In particular, it includes further provisions of labor law. It further rules out the application to the executives of the provisions of:

    (a) the remuneration for extra work (CC 659- SC 1029/1980);

    (b) the granting of leave and holiday allowance (SC 1047/2007, Court of Appeal of Dodecanese 79/2008) and

    (c) the payment of additional compensation for overnight stay (SC 968/2002).

    2. The justified (or not?) exemption from provisions of labor law

    It is justified to exclude executives from the provisions on working time limits. To be more precise: it is mandatory. The executive cannot be subject to time restriction controls as they do not have specific working hours. And how could that be implemented otherwise? Their increased responsibilities often require longer working hours than other employees. As a result, the provisions on time limits become incompatible with the position of an executive. Compensation for long-term work, however, is significantly higher than other employees.

    However, case-law does not recognize to the executives the right to leave. The relative (established) position of case-law is criticized by legal theory as being wrong, on the basis that it is contrary to both national and Union law. The relevant arguments are based on three pillars – legislations.

    In particular, Law 539/1945 “On the granting of regular paid leave”, although it provides for exceptions to its provisions (Article 1 par.3), does not exclude executives.

    In addition, the EU, via the Directive 2003/88 (which replaced Directive 93/104), guarantees the right to paid leave for all employees who provide work, without excluding executives.

    Lastly, International Labor Convention No. 52 (which deals with employees’ leave and was ratified by Law 2081/1952) does not include in its exemptions the executives from the right to take leave (Article 1 par.3).

    Notwithstanding the foregoing, there does not appear to be a change in case law on the relevant exception.

    3. Executive officers and trade unions

    There is a question of incompatibility with the position of an executive and the involvement in trade unions.

    Law 1264/1982 explicitly prohibits employers from joining employees’ trade unions (Article 14 par.3). The purpose of this prohibition is the independence and free development of employees’ trade unions, without being hindered by the employer. Based on this point of view, part of the theory argues that the legislative ban should also cover executives. The argument in favor of this view is that managers exercise employer powers while at the same time their interests overlap with those of employers. Consequently, they cannot engage with other employees as long as they serve the interests of their employer.

    However, in case-law the opposite oppinion prevails. In particular, it has been held that there is no prohibition on the participation of an executive in the company’s employees’ union, “… because the provision of Article 14 par. 3 of Law 1264/1982 prohibits the participation in trade unions only of employers and not of executives.” (CA 561/2007).

    4. Continuing to include executives in the category of employees

    In any event, the executive shall not cease to be an employee. Despite their increased (employer) powers and / or despite them having a highly confidential position, they still are employed. As a consequence, the attribution to them of the title and duties of an executive does not entirely deprive them of the protection of labor law. This protection is limited, not eliminated.

    However, the executive still enjoys considerable safeguarding of their labor rights. In particular, the provisions of the law of relating to the termination, collective redundancies and transfer of business apply to them as well. That is, they are entitled to redundancy compensation and a number of other benefits as well as additional holiday pay (unless otherwise agreed, SC 178/2008).

     

    VI. In conclusion

    In the (theoretical) bras de fer between employer and employee the result is rather clear. At a first glance, the relationship seems uneven.

    But it is not the same when an employer and an executive are competing. Accordingly, the protection of the latter by the provisions of labor law is reasonably limited. However, the limits of their protection are essentially laid down by case law. Sometimes even against (or beyond) the law. This, of course, creates legal uncertainty. Both for executives and for businesses.

    Adequate legislation regarding the rights of both (executive-business) is therefore desirable.

    And if such legislation is desirable, there is another legislative intervention that is necessary. And that is one that would lay down the conditions (with the least possible subjective elements) under which an employee as an executive.Until then, adequate (but also necessary) contractual arrangements between the employer and the executive will be of particular importance. We have already seen the importance of concluding written contracts with the right content for common employees. However, when employing executives, it is essential to conclude appropriate written employment contracts. Both for the executives and, above all, for the businesses that make use of their services.

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (March 15th, 2020).

     

    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.

  • Standby Contracts

    Standby Contracts

    Standby Contracts: Blessing or a curse?

    I. Preamble

    Numerous companies are called upon to satisfy drastically changing needs. Sometimes, those needs are emerging as a result of circumstances no one could predict. It is, of course, not possible for a business to employ a significant, at times, number of employees just because “maybe, at some point, some of them may be necessary”. The costs involved would be unbearable. And, consequently, deterrent.

    A suitable solution for such businesses (and such cases) are the so called “standby contracts”. The business-employer agrees with specific employees that the latter will be available and ready to offer their work. As long as the relevant need arises. (Of course) For a fee.

    Standby contracts are an institution that, unfortunately, is not provided for by law. But how does case-law approach this institution?

     

    II. The concept of employment

    “In the beginning was…” (one could argue) the concept of employment, under labor law. And that one would have a strong argument. The existence of employment is a prerequisite for the application of the provisions of labor law.

    The importance of the concept of employment is fundamental. We have yet to manage, however, to agree on how employment is determined. Or, to take it a bit further, to include in a legal text a (commonly accepted) definition of it. The distinction of an employment contract from contracts and concepts close to it often proves very difficult.

    Theories on what constitutes employment vary and are constantly changing. And what is changing as well is what case-law considers as criteria for identifying employment. The Supreme Court has found that: “for the purposes of the application of the provisions of labor law, employment shall normally mean the provision of the employee’s intellectual or physical activity, which is carried out under the control of the employer and is intended to achieve an economic result”.. This assumption may, however, give rise to the misconception that employment requires the positive action of the employee in order to be understood as such. However, the Supreme Court makes clear, that “… there is an employment relationship even when simply the freedom of the employee is restricted, when the latter undertakes the obligation to be standby and ready to offer their work, when this is required by the employer”. (indicatively SC 814/2014).

    It is settled case-law that one’s readiness for work is a form of employment. Standby contracts, however, are not provided for by law. The results of this particular regulatory gap is the difficulties in defining employment and its various forms. Most importantly: the uncertainty and ambiguity around the rules that govern it.

     

    III. The forms of a standby contract

    1. In general

    Case-law distinguishes two basic forms of a standby contract:

    (a) actual standby contract and

    (b) non-actual standby contract (mere or on call).

    The criterion for this distinction is the degree to which the employee is standby.

    Case-law has found in some cases that there are “intermediate standby stages”. These are contracts found between the two aforementioned categories. Contracts that are entered into in the context of the freedom of contract (CC 361) and are characterized by the intensity of the alertness required from the employee (indicatively: SC 110/2014, SC 8114/2014, SC 70/2010).

    It is for the competent Court to determine the degree to which an employee is standby at any given point. Also, the degree to which an employee is required to be alert. Depending on the ruling of the court, the standby contract will fall into one of the two basic categories mentioned above.

     

    2. Actual standby contracts

    When actually standby, the employee must:

    (a) Be for a specific period at a predetermined location (in the business or outside of it) and

    (b) Maintain their mental and physical alertness so as to be able to offer their services the moment the employer or circumstances so require.

    That is, it is not a simple restriction of the employee’s freedom. The employee, when actually standby, is required to, simultaneously, constantly be alert and available to the employer. And do so for the time predetermined by the employer.

     

    3. Non-actual standby contract

    In cases of non-actual standby contracts, the employee is obliged to (only) partially limit their freedom of movement for the employer. Ultimate goal; the employee’s availability and ability to offer their work at any time. In non-actual standby contracts, the employee also retains the ability to rest or be away from the workplace. The employee is even entitled to engage in other (irrelevant) occupations. That is to say, they are not required to be physically and spiritually alert. In these cases, we are talking about mere or on call standby.

    The Greek law does not distinguish the meaning of mere or on call standby. It puts them, as a whole, in the broader category of non-actual standby.

    In contrast, the Court of Justice of the European Union considers this distinction to be significant (from merely being standby to being on call). Indeed, in both cases, the employee does not have to be constantly alert. The differences, however, between these two categories of standby is not without significance.

    The difference between the two, lies on whether or not a restriction is imposed by the employer on the employee on where they can be (on top of the time restriction).

    In particular, in cases of mere standby duty, the employee is not entitled to be away from the workplace, which is determined by the employer.

    On the other hand, when the employee is on call, they freely choose where they will be. One necessary condition: to be reachable at all times. That is, the employee must ensure that, should the employer call them, they will be able to provide, within reasonable time, their work (indicatively.: Case C-151/02 (Jaeger)).

     

    IV. The legal importance of distinguishing between actual and non-actual standby contracts

    1. Regarding the application (or not) of the provisions of labor law

    The distinction of the various types of standby contracts made by Greek case-law is not without significance. This is because each type is approached differently.

    In particular, the actual standby contract is fully equated with “normal” work (work offered when an employee takes some positive action) in the eyes of the law. And this, regardless of if the employee will, at the end, be required to provide their work or not. Therefore, all provisions of labor law apply in this case.

    On the other hand, a non-actual standby contract is treated by Greek case-law as a peculiar form of work. This is why it does not fall within the regulatory scope of all the provisions of labor law.

     

    2. Regarding the remuneration of employees

    The importance of the above distinction (actual/non-actual) is highlighted when dealing with the issue of the salaries owed.

    In particular:

    (a) In cases when an employee is actually standby, case-law applies, with no exception, all the provisions of labor law regarding the salaries owed. Specifically: the minimum wage limits and increases. Also, the allowances for night and overtime work. Finally, the increments related to work provided on Sundays, holidays or rest days.

    (b) In the case of non-actual standby contracts, however, such treatment (as the one described under a) is not reserved. Case-law exempts non-actual standby contracts from the protective provisions of labor law with regards to the minimum wages provided for by Collective Agreements. Also, from the surcharges and compensation due for overtime and night work. Lastly, from the increments related to work provided on Sundays and other public holidays.

    The specific exemptions mentioned above do not, however, mean that the employee concerned (being on non-actual standby duty) is not entitled to a remuneration for the restriction of their freedom. According to Greek case law, the remuneration to be paid to this employee is contractually agreed (between the employer and the employee). However, the remuneration agreed may be lower (or substantially lower) than the statutory minimum wage. In the event, however, that the salary is not contractually agreed upon, the ‘ordinary’ salary (653 CC) is paid. And ordinary wages may, in fact, be lower than the legal minimum wage.

    It is a fact that in case of a non-actual standby contract, a great number of protective provisions regarding the remuneration of the employees do not apply. However, case-law accepts, in these cases, that the provisions regarding the holidays, holiday and leave pay, do still apply. And that so do the provisions regarding the termination of employment contracts and the dismissal compensation owed.

     

    3. Regarding the working time limits

    3.1. The establishment of maximum working time

    One of the main concerns of the protective provisions of labor law is the protection of the health of the employee. This objective is achieved, inter alia, by the establishment of maximum permissible working time limits. This aims to: (a) prevent the exploitation of the employee’s financial need for work; and (b) ensure a reasonable time for rest and participation in social life.

    3.2. The connection between the maximum working time and actual standby duty.

    From the aforementioned, it becomes clear that the provisions setting time limits fully apply to the actual standby contract.

    However, the same is not true of the non-actual standby contract. Case-law does not accept the application of the relevant provisions in this type of employment contract. We are therefore led to the conclusion that the employer could agree with an employee (who is on non-actual standby duty), the latter’s availability to provide work around the clock.

    However, this extreme assumption is obstructed by EU law.

    3.3. The connection of mere standby duty with EU law

    Mere standby duty is connected with EU law via the adoption of three Directives, regulating the organization of working time. These are: (a) Directive 93/104/EC, which has been transposed into Greek law by P.D. 88/1999 (B) Directive 2000/34/EC, which amended Directive 93/104 and transposed it into Greek law by P.D. 76/2005, and lastly (c) Directive 2003/88/EC, which codified the provisions of the two previous Directives.

    EU law, therefore, provides for maximum working time limits. It requires, at the same time, that the employee be provided with at least eleven (11) consecutive hours of rest within 24 hours. Directive 93/104/EC distinguishes time between ‘working time’ and ‘rest time’. These two concepts are mutually exclusive.

    The ECJ accepts that working time is the time during which the employee is at work, at the disposal of their employer, and perform their duties in accordance with national laws or practices.

    3.4. The time while the employee is on call is not considered working time

    Moreover, the ECJ consistently held that the time while on mere standby is working time. On the basis of this assumption, protective provisions setting working time limits apply in these cases (of mere standby). Indeed, at this point the distinction of the ECJ between the concepts of mere standby and standby on call (as discussed under III.3) is essential. This is because the latter is treated differently by law.

    In particular, the ECJ does not consider as a working time the time the employee is on call. In such cases, working time starts when the employee receives a call to provide the agreed work. The end of the working time coincides with the completion of the assigned task. As a consequence, only for this period (start-end) the working time limits apply.

    3.5. Deviations from working time limits

    The needs of a business may, provided the employee agrees, lead to deviations from the maximum working time (Article 17 of Directive 93/104). Some of those deviations will mostly occur under actual or, mainly, mere standby. However, in such cases it is mandatory, in accordance with the ECJ, to provide the employees concerned with equivalent periods of compensatory rest at intervals, immediately following the corresponding working time. In addition, such a reduction in the daily rest period should not result in exceeding the maximum weekly working hours.

     

    V. Technology and standby

    The employee’s continued availability/standby by utilizing/using digital technology should be equated with on call duty. A readiness to provide work that is practically possible through a laptop, a tablet and even the employee’s smartphone.

    The employee is at the disposal of their employer (only theoretically?) on a continuous basis. The employee can, and is no longer unusual, undertake and perform a task that does not require their physical presence.

    It is obvious that reading a professional e-mail could be seen as tantamount to interfering with the employee’s private life and time. And it can happen at any time. Off-hours included. So, combining digital technology with the non-application of legal work time limits regarding the on call standby duty is problematic. This is because it may deprive the employee, at least in part, of their right to rest.

     

    VI. In conclusion

    Standby contracts for specific activities, sectors and businesses are, undisputedly, a real and present need. Many businesses are adopting standby contracts and they have seen positive results because of them. And those contracts also have satisfactory (and often desirable) results for employees.

    So, there can be no doubt that the existence of standby contracts is absolutely necessary.

    The legality of this conclusion is not in dispute. Their regulatory framework, however, is only determined by case law. Unfortunately, there is no relevant legislation. This inevitably results in legal uncertainty. Of course, for employees as well. But especially for businesses.

    The involvement of the legislator proves necessary. After all, it is the legislator who is able to make the necessary adjustments.

    The basis for a legislation on standby contracts should be based on: (a) the particular circumstances of particular sectors and businesses, (b) their increased need to have employees on standby at specific times and/or for specific activities and (c) the potential of digital technology and the reality that it shapes.

    The relevant legislative intervention is not a luxury.

    It is simply an undue need.

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (March 8th, 2020).

     

    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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