Koumentakis

Tag: εργασιακά

  • Businesses may continuously operate, but Employees cannot

    Businesses may continuously operate, but Employees cannot

    Businesses may continuously operate, but Employees cannot: The misunderstanding around the institution of industrial enterprises that may continuously operate

    I. Preamble

    Recent public statements by the government regarding the operation of businesses for seven days a week have kicked off a relevant public debate. It seems that on the one side are the defenders of the liberal market, while on the other the defenders of labor rights. The latter are of the opinion that such arrangements violate acquired rights. Although it is an undisputed fact (see the inactivation of Collective Agreements) that labor rights shrank during the decade of the Greek crisis, this institution is not one such example. Its essentially was first introduced with a presidential decree issued during the 1932 Government of Eleftherios Venizelos.

    It is valuable to form an opinion on the subject so that we can clearly understand and distinguish the concept of “work” from the concept of “continuous operation”. Also, to objectively assess the value of this measure for both the employer and the employee, in the present social and economic circumstances.

     

    II. The legislative provision for the nature of “continuous operation” enterprises

    Article 2 of Presidential Decree 27.6 / 4.7.1932 codifies the provisions regulating working time limits. Employees of industrial and craft undertakings shall not, under this provision, work for more than eight hours per day and forty-eight hours per week. Article 1 §2 of the same regulation states that factories or parts of factories are classify as “continuous operation” if the daily working time of the employees exceeds ten (10) hours.

     

    III. The rotating employees shift system

    In businesses which are by default continuous operation businesses, the staff works in rotating shifts. This is in order to ensure the continued operation of the business throughout the seven-day or six-day week. The continuous operation of a business requires a differentiated modus operandi and entails changes in the timing and manner of work of the employees of the business. Employees have a say in whether or not they participate in working conditions that suddenly (and beyond the original agreement) go beyond what is common. Specific rules were laid down by law, to limit the unpleasant consequences and burden of this type of work (especially of the work offered at night) on the life of the employees.

     

    IV. Balancing overtime and the special circumstances.

    1. Average working hours in more weeks

    The eight-hour working hours per day limit, applicable to each employee, may be exceeded as long as the working hours are not more than fifty-six (56) per week. And that is, provided that the average working hours of the weekly working time do not exceed forty (40) hours per week on average, calculated in eight (8) weeks. Subsequently, overtime for employees under this scheme is calculated by offsetting the working hours throughout the eight-week period.

    2. Provision for night employees shift

    In addition, provision should be made, so that employees covering night shifts for one week will cover day shifts the following week.

    3. Provision for weekly holidays

    Finally, it is necessary to ensure: ​​(a) that employees who work on Sundays are required to rest on another day of the week, and (b) that once every three weeks it is mandatory that the employees will have Sunday as a rest day, along with the preceding or following day.

     

    V. Conditional extension of the regulation to undertakings not considered to be of “continuous operation”

    1. The rotating working groups (shifts)

    According to Article 7 of the Presidential Decree 27.6 / 4.7.1932, when it comes to employees working in shifts, the working hours may be extended to exceed eight hours a day and forty-eight hours per week on average, calculated in three weeks. The weekly average should not exceed 8 hours per day and 48 hours per week.

    2. Continuous operation of the whole business or of parts of it, in businesses not considered to be of “continuous operation” by default

    Pursuant to article 40 of Law 1892/1990, businesses and holdings which are not by their nature continuous, may operate continuously in whole or in part, with a system of alternating working groups. Necessary conditions: (a) the consent of the employee working in shifts and (b) compliance with all the above-mentioned conditions.

    3. The extra employees shift of the weekend

    Undertakings which are not of “continuous operation” by default, may, if necessary, operate as a whole (or in part) continuously over the weekend as well, even if its employees are not consenting to the business operating seven days a week.

    In this case, the employer will be required to employ a new, independent group of employees, which will work two additional days a week. Specifically, the additional staff “weekend team” will work twelve hours each day of the weekend, during a given weekend. The remuneration of this group of staff for these twenty-four hours is equal to the remuneration of employees for a forty hour – five-day week. Of course, the exceptional days for that particular, additional, staff are not counted as such.

    The above is also clarified in Opinion 97/2009 of the State Legal Council, which states that even if there is a Collective Agreement in place that provides for a five-day workday for employees of a particular specialty, it does not contravene the provisions of article 40 of Law 1892 / 11990. This is because a five-day week in no way negates or at least affects the possibility of six-day or even seven-day operation, with the creation of the fourth employees shift.

     

    VI. In conclusion

    By combining the above provisions, we realize that companies whose character justifies their continued operation or are in need to extend their operations partially or even in whole, can operate with shifts. In particular, subject to the conditions of employment protection provided for by law, companies licensed by the relevant Labor Inspectorate, and with appropriate legal advice to familiarize with the provisions and formulate and apply the right rules, can operate with shifts.

    As a result, it is possible, under legal and legitimate conditions, for a company to “work” twenty-four hours a day and seven days a week with its employees working eight hours a day and five days a week!

    Petrini Naidou
    Senior Associate

    P.S. A brief version of this article has been published in Greek in MAKEDONIA Newspaper (March 1, 2020).

    βάρδιες-employees-shift

     

    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: The necessary content

    Employment contracts: The necessary content

    The (rather necessary) content of the employment contract

    I. Preamble

    “I keep your words painted on paper …”, Marinella, a famous Greek singer, has been singing since 1970. She was probably not referring to written agreements. However, the commitments deriving from written texts are definitely binding. So says the Roman quote: “Verba volant, scripta manent” (: “talks fly away, written words stay put”).

    We have seen in a previous article that it is not generally necessary to conclude employment contracts in written.

    However, we concluded that: “The (written) employment contract, though optional, can prove valuable. As long as it has the right content. ”

    This article will address the (possible) necessity of written employment contracts. As well as their (desirable) content.

     

    II. The purpose of (written) employment contracts

    The aforementioned article was the comparative overview of the employment contract in relation to the disclosure of its essential terms, which derives from the P.D. 156/1994.

    There we found, inter alia: “But the purpose of the employment contract is significantly broader and more important. And this is the case despite it not (always) being mandatory – as opposed to the individual working conditions disclosure document. The contract regulates (and should regulate) all the rules governing the employment relationship. Not just the essentials.

    First of all, it may achieve the purpose of informing on the essential terms and thereby nullify the reason for the existence of the separate document. In addition, it can be an important tool in the hands of the employer with regard to all the terms and conditions of the employment relationship. The employment contract may place the employment relationship in a predetermined framework. It may preventively address a multitude of issues. It may act as a deterrent for actions which may result in litigation between the parties.”

    Therefore: The conclusion of (written) employment contracts, although not obligatory, is nevertheless very important – if not necessary.

     

    III. Regarding the structure and content of the employment contract:

    1. The structure

    The structure of employment contracts must serve, in addition to its content, the above (under II) purposes and goals.

    There may be two main sections. The first should refer to the specific information of each employment relationship (eg employee name, duration, etc.). The second is the uniform, for all employees, contractual arrangements. In this second section, it is important that no unauthorized person intervenes.

    2. The content of the employment contract

    The content of the employment contract may be, where appropriate, extremely broad or focused on particular issues. But it is important that it covers all the specific needs of the each business. It may include, indicatively, provisions concerning:

    2.1. The duties

    The duties of the employee need not be described in full detail in the employment contract. This is because they are essentially defined by the employer in the context of their managerial right. The employment contract is, moreover, an ongoing legal relationship. The needs of the employer are likely to change over time. Therefore, strict demarcation of employee duties is not only undesirable. It often turns out to be impossible. It is essential, however, that the employer has reserved the right to move freely within a predetermined framework.

    2.2. Place of the performance of work

    Businesses may have local or supra-local activity. It is not advised that they limit themselves, in one case or another, regarding the place where their employee’s services should be provided. Greek case-law gives some directions for when dealing with this particular issue: An entire geographical area, regardless of its size, can be agreed upon as the place of work of the employee. Even the whole of Greek territory – though this is dictated by the type and nature of the work provided.

    2.3. Providing services to a Business Group

    It is not uncommon for employees hired and paid by a company that is a member of a Group to (also) work for other “sister” companies. This practice created a problem, the content and solution of which we have already discussed in a previous article: (Employing employees in multiple companies in the same group: a chronic problem found its solution). We referred there to the Supreme Court’s Decision No. 10/2018, which held that: “… on a group of companies having common financial interests, even where the employee’s employment contract was drawn up with one of the group companies and their work is offered to other companies in the same group, the company which hired the employee remains their employer, and it is it which exercises managerial powers over the employee’s work and is responsible for the payment of all their remuneration.”

    This assumption turns out to be extremely important for company groups. The reason? The companies that make up the Group will be able to “employ” “sister” company employees. This is without exposing them to legal risks against these employees and / or the state. Also, without the employee being entitled to object to providing their services to other companies in the same Group. This discretion, however, presupposes appropriate contractual arrangements, so that its content, that is positive for the Group, does not end up exposing them to risks.

    2.4. Duration of the contract

    The employment relationship is agreed as fixed-term or for an indefinite period. The employment contract must, therefore, regulate matters concerning its termination, either if it is fixed-term or indefinite. More specifically and by way of indication, a fixed-term contract should provide for the possibility of premature termination (and without the invocation of a valid reason) by applying, at the same time, the applicable law on termination compensation for indefinite-term employment contracts (Article 40 of Law 3986/2011). Provisions should accordingly be made with regard to the part-time employment contracts. It is reasonable, for example, to provide a notice period, after which the employee will be entitled to leave his / her job (subject, of course, to the existing legal framework). Also, a number of other issues related to the employee resigning.

    2.5. Duration / working hours

    The maximum working time limits are set on a daily and weekly basis. These are set by law and may not be provided for restrictively in the employment contract. Unless we are talking about part time work or rotational work.

    2.6. Earnings:

    The employer and the employee are, in principle, free to agree on the salary to be paid. However, they are bound by the thresholds set by the existing institutional framework. This is, in this case, the “legal salary”. The agreed upon salary may be higher than the legal salary. In employment contracts, it is possible (in this case) to agree that the excess of the agreed upon salary (in relation to the legal) will cover overtime pay, work provided on a Saturday, Sunday or public holidays as well as night work.

    2.7. Voluntary benefits

    These are voluntary benefits, in cash or in kind, offered voluntarily by the employer, without them being bound to provide them by law or contract. The employment contract must provide for an express freedom of the employer to offer such benefits. Otherwise, if they offer them for a long time, they run the risk of creating a precedent. The result of which? Creating an obligation for the employer to offer them in perpetuity.

    2.8. Employee Obligations:

    The main obligation of the employee is to provide the agreed work (article 648 Civil Code). However, in the context of the employment relationship, the employee assumes a number of other obligations. What we call “ancillary”. These obligations include, but are not limited to: the obligation of employee loyalty, the obligation for obedience, confidentiality, information, to undergo medical examinations. Also the (contingent) obligations to not act in a competitive manner and to not enter into parallel employment. Indeed, in some exceptional cases (and depending on the nature of the work provided), the employee may also be bound to act (or not act) in a certain manner even outside of the context of their work. Failure to comply with the ancillary obligations may result in the employer terminating the employment contract. Therefore, such obligations are reasonable (and possibly mandatory) to be included in employment contracts.

    2.9. Protection of Personal Data – GDPR:

    Given the mandatory application of EU General Data Protection Regulation 679/2016 (GDPR), businesses (among others) have to comply with the requirements of the Regulation regarding the protection of personal data which is processed as a result of their activity. In a logical sequence, each of their employees must comply as well. Compliance with the relevant obligations is clearly the responsibility of the company concerned. The latter, as an employer, must – inter alia – explicitly inform its employees of its “Privacy Policy. Also, it must provide them with clear and detailed instructions on how they should process the Personal Data to which they gain access when providing their work. The fines imposed by the Regulation on those who violate it are extremely high. Written proof that the company has provided instructions to its employees regarding the processing of personal data is required. The written indication of their obligations and the consequences of any violations. All this either as an annex to existing contracts or as a new part of contracts to be concluded.

    2.10. Confidentiality

    An important challenge that all businesses face is that of ensuring that their confidential information is protected as such. Especially that they will not leack to the competition. This safeguard seems to be one of the important prerequisites for most business’s development. As we have already pointed out in a previous article (Companies and Confidentiality), it is of major importance that employment contracts provide for arrangements for limiting the use of confidential information to which employees gain access when providing their work. Of major importance is also: to provide for the obligations of employees during a specific period after the termination of their employment (eg return of forms, documents, notes, deletion or return of electronic files). Even more so: to provide for penalties for breach of their relevant (contractual and post-contractual) obligations (usually high penalties – in addition to general compensation claims).

    2.11. Patents

    It is vital for businesses to be able to protect their commercial as well as technical know-how. Often employees, in order to provide their work, have to gain access and use their employer’s know how. But such information may be the quintessence of a business’ business. It must, consequently, ensure their protection. An enterprise has the right, (as well) through the employment contract, to impose restrictions on those employees who become have access to such information. And to also impose sanctions (eg high penalties for violations). This is achieved through contractual provisions concerning the duration of the employment relationship (contractual terms) and also the period following its termination (post-contractual terms).

     

    IV. In conclusion

    Numerous large companies in our country, with numerous employees, do not have written employment contracts. They mistakenly believe that disclosing the essential terms of the employment relationship is sufficient. Even worse: that it provides adequate guarantees.

    But it is more than obvious that writing (and pre-emptively) arranging a significant number of work-related issues can be valuable to the business.

    Not just useful.

    Sometimes it is absolutely necessary for its survival and development.

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (February 16th, 2020).

  • Employment Contract=Disclosure of its Essential Terms

    Employment Contract=Disclosure of its Essential Terms

    Employment Contract = Written Disclosure of its Essential Terms (urban myth or not?)

    I. Preamble:

    “A hare’s eyes cannot see as well as an owl’s can.” A proverb used in Greece to indicate that not all things are the same. Not all have the same value.

    This is how life is.

    The same goes when dealing with employment relationships.

    It is widely held that the employment contract is identical to the written disclosure of essential terms of the employment relationship. Even in the HR departments of big corporations.

    But is this position correct?

    Or is it a general misunderstanding?

     

    II. In General: The principle of the “informality” of contracts

    It is generally not a prerequisite in our legal order for a contract to be in written, in order for it to be valid.

    Our Civil Code (Article 158 of the Civil Code) states the relevant rule: Specific formalities are only required where the law specifically requires them. This is the so-called “principle of informal transactions”.

    This principle (rule) is proven by the existence of exceptions. There are exceptions in cases where formalities are required by a specific law. Also, under conditions, subject to the agreement of the parties (Article 159 of the Civil Code).

     

    III. The (non) necessity of the “written document” in employment contracts

    1. The rule

    The “principle of informal transactions” also applies, not unequivocally, to the field of labor law. Employment contracts, of course, included.

    In other words: the existence of a written document is not a prerequisite for the validity of the employment contract.

    1. The exception

    There are two exceptions to the rule of non-necessity of a written document. Specifically, where the written document is either (a) provided as necessary by a specific legal provision or (b) the parties (employee-employer) opt for it.

    In the field of labor law, however, the exceptions to the rule appear to be several. For the validity of some employment contracts the law requires the written form.

    In the cases listed below, the written form is mandatory (that is, without a written document, there is no valid contract). This happens:

     (a) In employment contracts with the State and with Public Legal Entities (Articles 80 & 84 Law 2362/1995),

    (b) In the cases of part-time contracts (Article 38 of Law 1892/1990),

    (c) In cases of renewals of fixed-term contracts (Article 5 (2) of Presidential Decree 81/2003),

    (d) In the cases of temporary employment contracts (Article 124 of Law 4052/2012).

     

    IV. The document with which individual employment conditions are disclosed

    1. The employment contract and the disclosure of its terms

    The employment contract must not be confused with the document with which the employment conditions of each employee are disclosed. We have already mentioned (above under III.1) that there is usually no need for a formal document for the validity of an employment contract. A (common) contract in the private sector, for example, can be oral. That is, no conventional text is required to be signed.

    However, the employment contract (whether compulsorily concluded or the parties opt for it) should not be confused with the document with which individual employment conditions are disclosed.

    1. The obligation to disclose the employment conditions

    The employer is obligated to provide a document with which the employment conditions are disclosed, an obligation deriving from the PD. 156/1994.

    Directive 91/553 of the Council of the European Union required every employer to inform the employee of the terms of their contract or employment relationship. The aforementioned Presidential Decree was issued in the context of the relevant harmonization of (Greek) labor legislation.

    The specific obligation of the employer relates to the essential terms of the employment contract or relationship.

    The employer must fulfill this obligation within two months after drawing up the employment contract (Article 3 §1 PD 156/94) and within one month after any -possible- amendments (Article 5 §1 PD 156/94).

    1. The content of the (mandatory) disclosure document

    The above PD lists (not restrictively) the terms which must necessarily be included, as a minimum, in the information provided by the employer (Article 2 §2).

    The document providing information to the employee must at least contain:

    (a) The identity of the parties.

    (b) The place of employment, the seat of the business or the place of residence of the employer.

    (c) The position or specialty of the employee, their title, the category of employment and the scope of their work.

    (d) The date of commencement of the contract or employment relationship and its duration, if drawn up for a specified period.

    (e) The duration of the paid leave that the employee is entitled to and the manner and time it will be granted.

    (f) The amount of compensation due and the deadlines to be met by the employer and employee according to the applicable laws in the event of termination of the employment contract or relationship.

    (g) Any remuneration to which the employee is entitled and the when it should be paid.

    (h) The duration of the employee’s regular daily and weekly employment.

     (i) Metion of the collective arrangements that apply and determine the minimum remuneration and working conditions of the employee.

    It is clarified that the information referred to in points (e), (f), (g) and (h) above may also be given by referencing to the applicable provisions of Labor Law.

     

    V. The purpose of the obligation to disclose the conditions of the employment compared to the purpose of the employment contract

    The above (under III) obligation of the employer is not a requirement for the validity of the employment contract.

    (Possible) Non-compliance does not affect the validity of the contract.

    The purpose of this requirement is purely to inform. This is also explicitly stated in the relevant case-law. It is therefore acknowledged that “… when the employer fulfill their obligations under p.d. 156/1994, the employee is simply informed of the conditions of the employment contract or relationship, as those are defined by law and the individual contract, and this action itself has no effect on the particular employment contract or relationship”(Inter: Supreme Court 860/2010).

    On the contrary, non-compliance with the obligation to provide information gives rise administrative sanctions (Article 7 Presidential Decree 156/1994). A fine is imposed on the liable employer by the competent Labor Inspector. The latter is the one who will check the existence (or not) of the (completed) forms of disclosure of the essential working terms of each employer in the workplace.

    The information contained in this form is, in fact, essential. It is precisely the importance of the information that makes it necessary to include them in any (possible) written employment contract. That is why the Presidential Decree also provides that, in addition to any ‘other document’, the information can be provided to the employees through the ‘written employment contract’ (Article 3 §2).

    It is therefore possible that the above incorporation may not actually take place (: notice through a written contract). The (mandatorily) separate document for the disclosure will then work in parallel with the employment contract.

    In any case, however, it must be understood that the two documents serve different purposes.

    The notification of the PD is purely informative. It indirectly, therefore, evidences some basic working conditions.

    But the purpose of the employment contract is significantly broader and more important. And this is the case despite it not (always) being mandatory – as opposed to the individual working conditions disclosure document. The contract regulates (and should regulate) all the rules governing the employment relationship. Not just the essentials.

    First of all, it may achieve the purpose of informing on the essential terms and thereby nullify the reason for the existence of the separate document. In addition, it can be an important tool in the hands of the employer with regard to all the terms and conditions of the employment relationship. The employment contract may place the employment relationship in a predetermined framework. It may preventively address a multitude of issues. It may act as a deterrent for actions which may result in litigation between the parties.

     

    VI. The (potential) content of the employment contract

    We have already seen that the employment contract (possibly) has a significantly wider content than that of the (mandatory) disclosure of the essential terms of the employment. Even on issues where (prima facie) the content of the two seems identical, it is worthwhile to have an extended approach of them written down. Such issues may include, inter alia:

    (a) The duties of the employee

    (b) The place of the provision of the services – especially for undertakings which have or may develop transnational activities

    (c) The provision of services to a Group of Undertakings

    (d) Duration of the contract

    (e) Working Hours

    (f) Remuneration

    (g) Voluntary benefits

     (h) Employee obligations

    (i) Personal data matters

    (j) Confidentiality

    (k) Potential patents

     

    VII. In conclusion

    The employment contract is quite different from disclosing the essential terms of the employment relationship.

    The first is optional. The second compulsory.

    Failure to do either does not affect the validity of the employment relationship.

    The (written) employment contract, though optional, can prove valuable.

    As long as it has the right content.

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (February 9th, 2020).

  • Valid reason for dismissal

    Valid reason for dismissal

    Valid Reason for Dismissal (: Do I need one to fire my employee?)

     I. Preamble

    Much has been said during the past year about the termination of employment contracts set for an indefinite duration. The reason is the May 2019 law that introduced the need for a “valid reason” for the validity of such dismissals. The problems this law created were, in fact, too many. We have analyzed them in a previous article. Its abolition (“after it came into force”) came as a pleasant surprise in August 2019. We have already mentioned the benefits of this (necessary) legislative correction.

    However, the need for the existence of a valid reason for a dismissal is also provided for in the Revised European Social Charter.

    Which provision prevails?

    Can Businesses / Employers feel (completely) safe?

    I personally think it is worth taking a closer look at the subject…

     

    II. Brief Review: the status of the termination of the employment contract of an indefinite duration

    1. The termination of an employment contract of an indefinite duration

    1.1. We all knew, until May, that an employment contract set for an indefinite duration could be terminated by the employer at any time. Without the employer having to invoke any reason. The only condition: the payment of the redundancy compensation (: Article 5 § 3 of Law 3198/1955).

    When an employee considered that their dismissal was unfair, they had the right to appeal to the competent courts. Their main claim: cancellation of the dismissal and, in addition, returning to work. The burden of proof of the claims laid with the employee.

    1.2. On the 3rd of May 1996 the Revised European Social Charter was signed. The Revised European Social Charter is an international convention for the protection of social rights. It is already a domestic law as it was ratified by law (Law 4359/2016). It is, in fact, higher – ranking than Greek laws (Article 28 § 1 of the Greek Constitution).

    3. Article 24 of the Revised European Social Charter

    One of the rights guaranteed under the Revised European Social Charter is the right to protection in cases of termination of employment. Article 24 of the Revised European Social Charter provides:

    “With a view to ensuring the effective exercise of the right of workers to protection in cases of termination of employment, the Parties undertake to recognize:

    a. the right of all workers not to have their employment terminated without valid reasons for such termination connected with their capacity or conduct or based on the operational requirements of the undertaking, establishment or service;

    b. the right of workers whose employment is terminated without a valid reason to adequate compensation or other appropriate relief.

    To this end the Parties undertake to ensure that a worker who considers that his employment has been terminated without a valid reason shall have the right to appeal to an impartial body.”

    4. The legislative provision regarding the requirement for the existence of a valid reason

    4.1. Much later after the Revised European Social Charter was ratified in our country (2016), the first subparagraph of article 5, paragraph 3 of article 31 of Law 3198/1955 was replaced (article 48 of Law 4611/2019) as follows:

    “The termination of employment shall be considered valid only if it is due to a valid reason within the meaning of Article 24 of the Revised European Social Charter ratified by Article 1 of Law 4359/2016 (A ‘5), invoked in writing, if the redundancy compensation due has been paid and if the employment of the dismissed employee has been registered in EFKA (IKA) or the dismissed employee has been insured. In the event of dispute, the burden of invoking and proving the validity of the conditions invoked for a valid termination shall rest with the employer.”

    4.2. This provision has proved to be problematic on many levels as it has resulted in:

    (a) stigmatizing the employee by any of the “valid reason” options regarding their “behavior” or “abilities” in the event of termination of their employment contract;

    (b) the employers being reluctant to enter into indefinite-term contracts

    (c) the leaning towards fixed-term employment contracts, the termination of which does not require any “valid” reason; and

    (d) the increase of extrajudicial and judicial disputes.

    6. The abolition of the requirement to invoke a valid reason

    The Greek legislator, fortunately, listened to the legitimate reactions that the establishment of the “valid reason” requirement had caused. With a surprising move, it abolished the (problematic) provision of Article 48 of Law 4611/2019 — less than three months after it came into force.

    The provision of Article 117 § 2a of Law 4623/2019 (Government Gazette A 134 / 09.08.2019) provides that the provision of Article 48 Law 4611/2019 “shall be abolished after its entry into force” and that “the provisions of Law 2112/1920, as applicable, and Law 3198/1955, as applicable, in conjunction with Article 24 of the Revised European Social Charter, ratified by Article 1 of 4359/2016 (A ‘5) shall not be affected”.

     

    III. What is the “value” of Article 24 of the Revised European Social Charter?

    1. The questions raised

    The debate around the “valid reason” (as a prerequisite for a termination of indefinite term contracts) had begun since the Revised European Social Charter became state law. The questions that we have been dealing with since then (and until May 2019), and we are still dealing with (after August 2019), are:

    (a) What is the legal binding effect of Article 24 Revised European Social Charter in the Greek legal order? and

    (b) Is Greek law in conformity with Article 24 of the Revised European Social Charter?

    There are two ways to approach this issue.

    2. The first view

    (: Article 24 of the Revised European Social Charter does not affect the protection against dismissal)

    2.1. According to the first view, Article 24 of the Revised European Social Charter did not have, nor does it exercise, any influence on the Greek system of protection against dismissals. This view (that the signatory shares) seems to prevail in jurisprudence. A series of decisions attests to the truth (SC 1512/2018, First-Instance Court of Athens 237/2019, First-Instance Court of Athens 2180/2018, First-Instance Court of Thessaloniki 10675/2018, First-Instance Court of Thessaloniki 19510/2017).

    According to this view, termination of an indefinite-term employment contract continues to be an employer’s right. Most importantly: it continues to not require the invocation of any reason. In other words: “its validity does not depend on the existence or defect of the cause of it.”

    2.2. We all agree that this right (as well as any other right) is subject to restrictions. All rights must be exercised within the limits of good faith, the principle of morality and their socio-economic purpose. When the employer’s right to dismiss an employee is abused, the termination is invalid. The relative burden of proof lies, of course, with the employee. The declaration of invalidity presupposes an assessment. In addition: a court ruling.

    2.3. The ratification of the Revised European Social Charter does not affect the specific, preexisting, legal provisions in our country. The conditions laid down in Article 24 of the Revised European Social Charter are (more than) fulfilled in the Greek legal order. This is because the “obligation of the employer to indemnify the employee has long been recognized in domestic law (…) in every termination (with the exception of a termination due to criminal charges) and is not waived even when the employer could prove a valid reason for the termination of the employment. Consequently, the affirmative or negative reference to a valid reason for the termination is irrelevant. That is why the validity of the complaint is still being examined individually only with the application of the article 281 of the Civil Code, as before, after the employee has filed a lawsuit with the competent court ” (SC 1512/2018).

    2.4. The (recent -August 2019) abolition of the requirement for the existence of a “valid” reason was also based on the above (under 2.3) decision of the Supreme Court. It is therefore obvious that the legislator itself is in favor of not requiring, after the ratification of the Revised European Social Charter, any reason in order for a termination of an employment contract of an indefinite duration to be valid.

    3. The second view:

    (not requiring the invocation of any reason is incompatible with Article 24 of the Revised European Social Charter)

    This view is only slightly reflected in Greek jurisprudence. There are only two decisions, so far, that approach the termination of an employment contract this way: First-Instance Court of  Pereus 3220/2017 and the most recent First-Instance Court of Lasithi 17/2019.

    As the latter mentions: “… On the basis of the foregoing considerations it becomes clear that after the ratification of the revised Charter the principle of objectively justified dismissals was directly introduced into Greek law and hence the Greek courts should further investigate on the one hand the existence or not of a valid reason, with valid reasons being those restrictively cited in Article 24 of the revised Charter and, on the other, consider any dismissal not based on such a ground to be unlawful. This can be done either by direct reference to Article 24, the wording of which, at least in this respect, is precise, clear and unconditional, in conjunction with the provisions of Articles 174 and 180 of the Civil Code. – a view considered to be more correct by this Court, or interpretatively, through Article 281 of the Civil Code, whereby any dismissal that is not in accordance with the provisions of Article 24 of the revised Charter shall be regarded as abusive.”

     

    IV. In conclusion

    Article 24 of the Revised European Social Charter requires the existence of a valid reason for the termination of an indefinite-term employment contract.

    For a quarted it was legally required by the employer to invoke and prove the existence of one. It is not anymore.

    Case-law (and correctly, in the signatory’s view) in its majority states that the provision of Article 24 of the Revised European Social Charter does not have any bearing on the Greek system of protection against dismissals. Termination of an indefinite-term employment contract remains the employer’s right. Its validity does not depend on the existence or (possible) defect of its cause. The only limitation: to not abusively exercise this right.

    However, the opposite view has been recorded in case law.

    It is well known that, in the Greek legal system, jurisprudence is not binding. This means that the approach of case-law can be changed. Moreover, none of the decisions reflecting the minority have so far been appealed before the Supreme Court.

    The sole decision of the Supreme Court (SC 1512/2018) dealt with the issue secondarily. However, it made it clear that the employer is not required to do anything more than pay the redundancy compensation.

    And rightfully so.

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (February 2nd, 2020).

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  • Employee suspension or Contract termination?

    Employee suspension or Contract termination?

    Employee suspension (: The other measure that is milder than terminating an employment contract)

    I. Preamble

    “Profit is the brother of loss” mentions a well-known Turkish saying.

    This saying is, unfortunately, proved right in the context of business. This is when the (healthy) attempt to make a profit turns out to be ineffective.

    What is crucial is how the businessman evaluates each case. Is the situation reversible or not? Is the cessation of business temporary or permanent? Does it affect the whole business or only part of it?

    In any case: the effort to reduce a business’s expenses turns out to be particularly significant. Wage cost reduction is the first thought.

    Layoffs? Is that the only solution?

    Are there milder measures? Rotational work or employee suspension?

    We have already referred to rotational work.

    In this article we will examine employee suspension.

     

    II. Suspension-in general

    1. In general

    Termination of an employment contract is a permanent (but also socially burdensome) measure. But what is basically crucial is the support of the business. Rescuing it will mean the (socially desirable) survival of jobs. Employee suspension is, as mentioned, the other milder measure (along with rotational work). Jobs are saved this way, even temporarily. The expectation of a definitive recovery of the business is kept alive. The prospect of a permanent rescue of (endangered) jobs survives.

    2. The legislative framework

    Suspension is regulated by Article 10 of Law 3198/1995, as in force (after its last amendment in 2010). This provision states:

    “Businesses and holdings, if their activity is restricted, may, instead of terminating the employment contract, suspend their employees in written, and the suspension shall not exceed a total of three (3) months per year, unless they have previously consulted the legal representatives of employees in accordance with the provisions of p.d. 240/2006 (Government Gazette 252 A) and Law 1767/1988 (Government Gazette 63 A).

    If there are no employee representatives in the company, all employees are informed and consulted. information may be provided by a one-time notice at a prominent and accessible place in the business. The consultation shall take place at the place and time specified by the employer. During suspension, the employee receives half the average of the last two months’ full-time wage of full-time employment. After the three months have expired, at least three (3) months must pass before the same employee can be suspended again. The employer must inform the relevant services of the Labor Inspection Body, IKA and OAED in any manner regarding the relevant statement of suspension, affecting part or all of their staff. “

    3. Purpose and basic principles

    3.1. Suspension has a dual purpose:

    (a) To contribute in the reorganization of the business with the restricted activity; and

    (b) To support the employees to look for a job during their suspension.

    3.2. The business that is called upon to deal with its restricted activity achieves, through suspension, a reduction in its redundant staff and employment costs.

    Most important: No layoffs.

    Suspension may extend to all of the employees (: complete suspension). But it may also extend to some of them (: partial suspension).

    In no case, however, can suspension be applied as a measure against a specific employee. Suspension is a collective measure (like that of rotational work).

    Thus, the company can suspend the employment relationship for its redundant staff.

    During suspension, the obligation to pay for salaries is limited: The employer pays (to the suspended employees) half (1/2) of the average full-time salary of the last two months.

    3.3. An employee who is suspended does not, of course, have to present themselves to the business and provide their work for the duration of the implementation of the measure.

    During this time, the employee has the opportunity to work for another employer. Alternatively: to engage in any other activity. They shall not in any event be deprived of their right to receive ½ of their salary. These salaries are not offset by what the employee receives from their (potential) employment under another employer to supplement their income.

    Additionally: the time period of suspension is considered as if the employee was actually working. This means that it is taken into account for the determination of the amount of compensation due in case of dismissal, for increasing the salary due to seniority, etc.

     

    III. Conditions for enforcing suspension

    1. It is clear from the wording of the law that the measure of suspension is, in some respects, identical to that of the unilaterally imposed rotational work. The same applies to what is accepted (and we have already analyzed) in the context of rotational work.

    The conditions laid down by law for the suspension of employees to be valid are, in particular, the following:

    (a) Restriction of the activity of the enterprise;

    (b) Prior information and consultation with employee representatives;

    (c) The written form,

    (d) The maximum length of suspension and

    (e) Notification to the competent departments of the Labor Inspection Body, EFKA. and OAED.

    2. In more detail:

    (a) Restricting the economic activity of the enterprise

    The first essential prerequisite is that the business’s “activity is reduced”. This requirement is also met with the unilateral imposition of rotational work. There we said: “The law does not further specify what “the reduction of business” really means. In any case, there is no need to jeopardize the viability of the business. However, any (minor) reduction of the operation of the enterprise, of the establishment or of a sector of the business and/or if the business is operating at a loss are not sufficiently meeting the relevant legal requirement. Nor is it sufficient for an employer to have financial or liquidity issues that result in their difficulty to pay employees for a certain period. It is required that the “volume of activity” should be such that “there will be a surplus of staff as a result of the reduction in available work” (Circular 35958/666/2017).”

    As suspension is imposed as an extreme measure, but also a measure milder than that of the termination of the employment contract, it is a reasonable premise that the reduction of the activity poses a real threat to jobs. In other words, it must be such a reduction that it could lead to dismissals for economic and technical reasons.

    (b) Prior information and consultation with employee representatives

    i. Prior to the employer’s decision on the suspension measure, the law requires prior information and consultation with employee representatives (in accordance with the provisions of Presidential Decree 240/2006 and Law 1767/1988). This is another (formal) requirement, which we met and analyzed in the case of a rotational system. Fortunately, even in the case of suspension, they do not need to end well.

    ii. The above (under i) obligation applies to all undertakings to which the employer intends to impose the measure. And this, regardless of the number of employees. (Irrespective of whether they employ fewer employees than those provided for their implementation, as set forth in Articles 3 of Presidential Decree 240/2006 and 1 of 1767/1988).

    iii. In addition, according to the abovementioned provision, “information may be provided by a one-time notice at a prominent and accessible place in the business. The consultation shall take place at the place and time specified by the employer.”

    iv. In any case: The information should contain the reasons why the employer needs to enforce the suspension measure. Indicatively: evidence of a significant restriction on the activity, its likely duration, and the proposed extent of suspension (eg, application to certain parts of the business or to the whole business).

    It is noted that in businesses with a small number of employees, this information may also be provided by an oral communication to employees.

    v. The invitation of the employer to consult the employees’ representatives, or in the absence of them, all employees, should, in addition, include the place and time of the consultation. The interval between the communication and the consultation should be sufficient for the employees to prepare. The (sufficient) time is a real issue and is judged on a case by case basis. This is because it depends on several factors. Indicatively: number of employees, number and complexity of issues to be consulted on etc.

    vi. Consultation under Article 4 of Law 3846/2010 is fairly broad. Of course, it is the exchange of views between the employer and employee representatives (or employees). It will focus on the measures and decisions that need to be taken to tackle the difficulties of the business with the significantly reduced activity. Specifically, the creation of a system of distributing the remaining work to all the staff of the enterprise (or to a specific part of it) in order to save jobs.

    vii. What is encouraging, however, is that, as stated above, the positive outcome of the consultation is not a requirement for the implementation of the suspension measure. There is no need for the employer and employees to reach an agreement.

    However, the imposition of the measure of suspension by the employer, without prior notice and consultation, is invalid.

     (c) The written form

    i. The written form (that is, the written statement of the employer’s decision to impose the measure of suspension) is required by the law itself. It is therefore an integral part of the validity of suspension, without which suspension is not possible. Consequence of this omission? The employee is entitled to full remuneration and not half of it, which they should be getting, if they had been lawfully suspended.

    ii. The requirement for the written form is not replaced by any general disclosure that is posted on display in the workplace. According to case law, the employer must send an individual written statement to each employee they are about to suspend (SC 499/1990). It is advised to keep two copies of this statement, one of which will be delivered to the employee. In his statement, the employer is not required to state in detail the incidents which have led them to take the above measure. However, it must be concluded that the application of this measure is a consequence of the restriction of the economic activity of his business. As already mentioned (under III.2.a.), it is only under this condition that the suspension of employees is allowed.

    iii. In the individual written statement, however, the employer must specify the commencement and duration of the measure. Notification of the employee’s forthcoming suspension must take place within a reasonable time prior to its commencement. Such an obligation is not required by law. It is, however, accepted by the courts as a manifestation of good faith (464/2013 First Instance Court of Xanthi). The purpose of timely notification is to allow the employee to seek other employment while suspended, so that they can supplement their income.

    (d) The maximum duration of suspension

    i. The law explicitly specifies the maximum length of time that the suspension measure can be implemented. In particular, its duration may not exceed three months in the same calendar year. The above quarter includes both business days, Sundays and holidays, with the term “year” being the period from 1 January to 31 December.

    ii. This maximum duration of suspension may be imposed either at once or in fractions. It is therefore possible for employees to be suspended once or more times during the year. Under no circumstances, however, can multiple suspensions turn into rotational work. Suspension requires continuous and total abstinence from work. Otherwise, the dual purpose of the imposed measure (the relief of the business and the employee’s opportunity to seek work elsewhere) is circumvented.

    iii. But there is one more time limit. It is about the time it takes to (re)suspend the employee. Therefore, if the abovementioned quarter is exhausted, three months of work are required in order for and employee to be suspended.

    (e) Notification to the competent departments of the Labor Inspection Body, EFKA and OAED.

    The last condition (of legality) of the suspension is that the employer notifies the relevant decision “by any means” to the relevant authorities of the Labor Inspection Body, EFKA (former IKA) and OAED.

     

    IV. In conclusion

    Alternation between profit and loss is not a theoretical possibility in a business. No matter how well organized it is.

    In the event of damages, it is the rescue of the business that must be dealt with first.

    It is up to the employer to choose the appropriate measures, where appropriate.

    The utilization by the employer of milder measures (compared to the termination of employment contracts) is, of course, preferable.

    Making use of the institution of suspension can be a step to the right direction…

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (January 26th, 2020).

    διαθεσιμότητα εργαζομένου

  • Rotational Work or Dismissals?

    Rotational Work or Dismissals?

    Limitation of business activity (: Dismissals or Rotational Work?)

    I. Preamble

    When Demosthenes, in his work Olynthicus I, proclaimed that “it is harder to maintain wealth than to acquire it”, he probably did not realize the time value of this position of his (nor did he realize that I would be using it today).

    The value of this position is self-evident in matters relating to safeguarding personal wealth. The same goes in matters relating to ensuring the existence and health of every business.

    It is a fact that every entrepreneur (with no exception) sincerely strives for the development of their business activities.

    Sometimes their efforts are not successful. They then face a series of dilemmas: Should I shut my business down? Should I lay off some employees in order to still be able to offer jobs to the rest and keep my vision alive?

    Dismissing employees is the first (necessary -obviously not desirable) solution. It results, in any case, in the business saving the expenses it would otherwise occur.

    Terminating an employment contract is the most drastic, unilateral, way to intervene on it. When an employer decides to terminate an employment contract, the result is not only the termination but also the loss of the job. Without the employee’s approval.

    Safeguarding the interests of both the company and of the employees, is equally important. In order to avoid dismissals (and in the interests of both), the legislature has adopted, among other things, two more mild measures. These of rotational work and suspension. These measures may prove just as appropriate to protect the interests of the business (as well).

    In this article we will deal with the first of the two, rotational work.

     

    II. Rotational work -in general (and part-time work)

    1. In general

    Rotational work is part of the part-time employment institution. We have already referred to part-time employment in a previous article.

    2. The legislative framework

    2.1. Rotational work is regulated by the provision of article 38 par. a and b of Law 1818/1990-as applicable. This regulation states:

    “When drawing up or during the duration of an employment contract, the employer and the employee may, by a written individual agreement, agree to any form of rotational employment.

    Rotational employment is considered to be working fewer days per week or fewer weeks per month or fewer months per year, or a combination of these on a full-time daily basis.

    The protection provided by this Article shall also cover those employed in accordance with the agreements referred to in the preceding paragraph.”

    2.2. Also, par. 3 d’ states:

    “The employer may, provided their activities are reduced, instead of terminating the employment contract, impose a rotational employment system on their business, the duration of which may not exceed nine (9) months in the same calendar year, only after they have informed and consulted with the legal representatives of the employees, in accordance with the provisions of P.D. 240/2006 and Law 1767/1988. The agreements or decisions referred to in this paragraph shall be notified within eight (8) days of their drafting or receipt to the relevant Labor Inspectorate. “

    3.3. Rotational work is therefore different from part-time work. Rotational work refers to working fewer days per week or fewer weeks per month or fewer months per year or a combination of these. However, in any case, it exclusively refers to full-time employment.

    Working less than “full-time” is linked to part-time work.

     

    III. Rotational Work Schemes – Features and Requirements

    According to the above, two are the possible rotational work schemes.

    The former is the product of an employer-employee agreement.

    The second is that imposed by the unilateral decision of the employer.

     

    1. Rotational work as per a relevant agreement

    1.1. Conventional rotational work is what is agreed between the employer and the employee. This agreement can take place at two different times. When concluding an employment contract or, alternatively, during a (already existing) full-time contract. In the latter case, the agreement shall modify the original contract.

    1.2. In rotational work, employees’ working and non-working days alternate. There is, of course, a corresponding reduction in their remuneration. Despite this rotation, however, the operation of the business (or of the part of the business) continues. It goes without saying that the work is offered full-time. In no case is rotational work allowed when the work is offered part-time.

    As for the other provisions of the law:

    Switching between working and non-working days is not subject to any restrictions. This rotation can be freely agreed upon, without the need for the working and non-working periods to be the same or similar. For example, on a five-day work system it may be agreed to provide work for any number of one to four days a week, or to provide reduced weekly work only for certain weeks of the month and so on.

    1.3. In a bit more detail: There is no restriction on the duration of conventional rotational work (as opposed to the restrictions provided if the rotational work is unilaterally imposed -below under 2.4.iv). The content of the agreement is therefore left to the contractual freedom of the employer and the employee. The law does, however, lay down some clear conditions (below 1.4-1.6) for such agreements to be (legally) concluded.

    1.4. In accordance with the provision of §3 e’ Article 38 of Law 1892/1990, if the above agreement between the employer and the employee is not concluded in writing, the full employment of the employee shall be presumed!

    1.5. Also, according to the provision of Article 38 § 5 of Law 1892/1990, the written individual contract providing for the rotational work must include specific details. At least:

    (a) the identity of the parties;

    (b) the place of employment, the place of business or the address of the employer;

    (c) the time of employment, the method of allocation and the working hours;

    (d) the method of remuneration; and

    (e) any conditions for amending the contract.

    1.6. Lastly, according to the law the part-time contract must be registered within eight (8) days on the ERGANI information system (Article 38, § 3 e’ 1892/1990).

    It is important to stress that in the event of failure to register the agreement, a full-time employment relationship is presumed.

     

    2. The unilaterally imposed rotational work

    2.1. The employer may unilaterally impose on their business a rotational system. A prerequisite is the reduction of their activity. The daily working hours for workers must also be equivalent to full-time employment in this case as well. There is also no restriction in this case on the distribution of working days on a weekly and / or monthly basis.

    2.2. The unilaterally imposed rotational work relates to a collective arrangement. It cannot be applied, selectively, to individual employees. It should concern all the staff of the business or at least some part of it.

    It is obvious that the legislator’s objective is for the business (which now has a reduced activity) to evenly distribute the negative effects of its reduced turnover to all its staff. This is in order to avoid layoffs and save jobs.

    The collective nature of the arrangement also derives from the reference to the provision in question to a “rotational employment system”. It is also confirmed by the fact that, for the validity of its enforcement, the employer must inform and consult with the representatives of the employees (as discussed below under 2.4.c).

    2.3. The conditions laid down by law for (legally) imposing a rotational employment system are substantive and formal. Specifically:

    (a) Substantive requirements:

    • The reduction of the business activity of the employer,
    • The rotation of employees in the same or in different jobs at different times

    (b) Formal requirements:

    • Prior notification and consultation of the employee representatives,
    • The duration of the enforcement shall not exceed nine (9) months in the same calendar year; and
    • The decision of the employer to be registered within eight (8) days on the ERGANI Information System.

    2.4. In more detail:

    (a) The reduction of the employer’s activity

    The first essential prerequisite is that the business’s “activity is reduced”. The law does not further specify what “the reduction of business” really means. In any case, there is no need to jeopardize the viability of the business. However, any (minor) reduction of the operation of the enterprise, of the establishment or of a sector of the business and/or if the business is operating at a loss are not sufficiently meeting the relevant legal requirement. Nor is it sufficient for an employer to have financial or liquidity issues that result in their difficulty to pay employees for a certain period. It is required that the “volume of activity” should be such that “there will be a surplus of staff as a result of the reduction in available work” (Circular 35958/666/2017).

    Where rotational work is imposed as an extreme measure, but milder than that of the termination of employment contracts, it is a reasonable premise that activity reduction poses a real threat to jobs. In other words, it must be such a reduction of activity that it could lead to dismissals for logistic reasons (SC 771/2017).

    (b) The rotation of employees in the same or in different jobs at different times

    According to the case law of the Arios Pagos (Supreme Court of Cassation of Greece) (decisions no. 470/2018, 1279/2018, 771/2017 and 1252/2014), the rotational employment system requires that:

    • the rotation of employees in the same business, holding or part of a business or holding
    • in the same or in different jobs,
    • at different times but at regular intervals,

    at the same time while the operation of the business remains constant.

    This rotation can involve:

    • either groups of employees, one of whom will replace the other in succession in employment and in non-employment,
    • 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.

    Without this interchange of work, which will occupy all employees in the business or part of it that has a significantly reduced activity, the implementation of the system is, in principle, not acceptable.

    (c) Prior notification and consultation of employee representatives

    1. Prior to the unilateral decision of the employer to impose a rotational employment system, prior notification and consultation of employees’ representatives is required by law (in accordance with the provisions of Presidential Decree 240/2006 and Law 1767/1988). Fortunately, the successful outcome of such communications is not a requirement.
    2. The above (under i) obligation applies to all undertakings to which the employer intends to impose the measure. And this, regardless of the number of employees. (Irrespective of whether they employ fewer employees than those provided for their implementation, based on Articles 3 of PD 240/2006 and 1 of 1767/1988).

    iii. According to § 4 of article 38 of Law 1892/1990, as employees’ representatives:

    “Are defined in the following order of priority:

    (a) representatives of the most representative trade union organization of the undertaking or holding, which in its articles of association covers employees, irrespective of their category, position or specialty;

    (b) representatives of the existing trade unions of the business or holding;

    (c) the workers’ council

    (d) in the absence of trade unions and a workers’ council, all workers shall be informed and consulted.”

    1. In addition, according to the abovementioned provision, “information may be provided by a one-time notice at a prominent and accessible place in the business. The consultation shall take place at the place and time specified by the employer.”

    In any case: The briefing should include the reasons that make it necessary for the employer to impose a rotational system. Indicative: evidence of a significant reduction of activity, its possible duration, the proposed scope of rotation (its application, for example, to certain sectors of the business or to the business as a whole), the particular employment distribution system that the employer intends to implement (: SC 771/2017).

    It is noted that in businesses with a small number of employees, this information may also be orally communicated to the employees.

    1. The invitation of the employer to consult with the representatives of the employees, or in the absence of them, with all of the employees, should also include the place and time of the consultation. The time between the communication and the consultation should be sufficient for the employees to prepare. The (sufficient) time is a crucial requirement and whether or not that requirement is met is examined on a case by case basis. This is because it depends on several factors. Indicative: number of employees, number and complexity of issues to be discussed etc.
    2. The consultation under article 38 of Law 1892/1990 has a rather broad framework. Of course, it is the exchange of views between the employer and employee representatives (or employees). It will focus on the measures and decisions that need to be taken to tackle the company’s difficulties resulting from the reduction of its business. In particular, the creation of a system of allocating the remaining available work to all the staff of the enterprise (or of a specific sector of it) in order to save jobs.

    vii. What is encouraging, however, is that, as mentioned above, there is no legal requirement that the consultation on the implementation of rotational work has a successful outcome. There is no need for the employer and employees to reach an agreement.

    However, imposing a rotational employment system without prior notifications and consultation is illegal and is (considered to be) unilaterally adversely affecting the working conditions. In this case, the employee may regard the employer’s decision as a termination of the employment contract. The employee then has two alternatives: either (a) to leave and claim the legal compensation or (b) to continue to offer their services in accordance with the terms of the employment contract – rendering the employer at default for not accepting the services offered, which would result in the employer owing the employee all their wages.

    (d) Maximum duration of work rotation

    As already mentioned, in the case where the rotational work is agreed upon between the parties, there is no time limit. On the contrary, this is not the case when the employer imposes this system unilaterally. The duration of this unilaterally imposed measure shall not exceed nine (9) months within the same calendar year (§3 d’ Article 38, Law 1892/1990).

    (e) Registration of the employer decision in ERGANI

    The last formal requirement (for the validity) of the unilateral enforcement of a rotational employment system is to register the relevant decision within eight (8) days in the competent Labor Inspectorate. (Already, by virtue of Decision No. 40331 / 19.09.2019 of the Ministry of Labor and Social Affairs, it is mandatory to submit to the ERGANI information system the Labor Inspectorate Body’s appropriate forms, such as Form E9 on rotational work.)

    Therefore, the unilateral decision of the employer should be registered with ERGANI within eight days of its adoption.

     

    IV. In conclusion

    Imposing a rotational employment system is an important tool in the hands of the employer, in their effort to ensure, in times of distress, the survival of their business.

    It can happen by consensus.

    It can (fortunately) take place unilaterally.

    In this case, the employer needs to pay attention to some crucial legal requirements (evaluation of individual parameters, processing of specific data, planning of strategy, rotational employment system design & implementation, realization …)

    However, the employer is required to focus, above all, on the fulfillment (and proof of fulfillment) of the necessary legal requirements.

    And all of this is an important, if not necessary, step towards rescuing (troubled) businesses.

    Of course, and as a result, in rescuing (the always valuable) jobs as well…

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (January 19th, 2020).

  • Part-Time Employment (and Exceeding the Agreed Upon Working Hours)

    Part-Time Employment (and Exceeding the Agreed Upon Working Hours)

    Part-Time Employment (and Exceeding the Agreed Upon Working Hours)

    I. Preamble

    The majority of businesses have relatively stable operating conditions. But there are a few businesses whose needs may differ from time to time. At regular or irregular intervals.

    It would be unreasonable to force these companies to hire all the staff they may need full-time.

    Such a logic would run counter to their growth prospects. It would certainly be a question of jeopardizing their existence. And of course all the jobs they offer. To the detriment of the national economy.

    In this context, reasonably flexible work schemes are sought. One of them: the part-time work scheme.

     

    II. Part-time work scheme – in General

    1. A part-time work scheme was first introduced with Article 38 of Law 1892/1990. This provision was replaced by Article 2 of Law 2639/1998, in the context of the harmonization of national legislation with Directive 1997/81. It was later amended by the provisions of Articles 2 of Law 3846/2010 and 59 of Law 4635/2019.

    2. The provisions of Article 38 §1 & §2 of Law 1892/1990, as it is in force today, provide:

    “Article 38

    Part-time employment

    1. At the time of drawing up the employment contract or during the time it is in force, the employer and the employee may, by a written individual employment contract, agree on a daily or weekly or fifteen day or monthly work for a fixed or indefinite period shorter than the normal period. (part time employment).

    If this agreement is not drawn up in writing or it is not notified within eight (8) days of its establishment to the relevant Labor Inspectorate, the full-time employment of the employee shall be presumed.

    1. For the purposes of this Article:

    (a) “part-time employee” means any employee being employed under an employment contract or relationship, whose working hours, calculated on a daily, weekly, fifteen-day or monthly basis, are less than the normal full-time equivalent of the comparable full-time employee;

    (b) “comparable full-time employee” means any full-time employee employed in the same undertaking by an employment contract or relationship and performing the same or similar duties under the same conditions. Where there is no comparable full-time employee in the business, the comparison is made with reference to the collective arrangement to which the employee would be subject if they had been employed full-time. Employees working under a part-time employment contract or relationship shall not be treated less favorably comparable to full-time employees, unless there are objective reasons justifying it, such as a differentiation in working hours.

    3. In the context of the above provisions:

    (a) Part-time employment is the daily or weekly or fifteen-day or monthly work (agreed between the employer and the employee), the duration of which is shorter than the normal (full time, ie full time employment). This agreement may be for a fixed or indefinite period.

    (b) A part-time employee is one whose working hours (calculated on a daily, weekly, fifteen-day or monthly basis) are less than the comparable employee’s normal working hours (detailed below under V.2).

    4. The part-time work scheme is widely accepted by undertakings which are required to manage changing conditions in their operation. These businesses can, through it and based on their needs, adjust their resources and operation over a given period of time.

     

    III. The part-time work scheme, the content and the “written form”

    1. The content of the part-time employment contract is not strictly defined in the law. It rests with the contractual freedom of the employer and the employee. But it is the law that sets clear limits on this particular freedom of contract. Accordingly, the contract is a prerequisite for the application of the specific rules governing it.

    2. The provision of Article 38 § 5 of Law 1892/1990, as in force, provides:

    “5. The written individual contracts referred to in the preceding paragraphs shall include:

    (a) the identity of the parties;

    (b) the place of employment, the place of business or the address of the employer;

    (c) the working hours, the allocation and working periods;

    (d) the method of remuneration; and

    (e) any conditions for amending the contract.

    In seasonal hotels and catering establishments the written individual contracts referred to in paragraph 1 herein shall be of a daily or weekly working period.”

    3. Individual part-time employment contracts should include the information mentioned above (under 2).

    A key requirement for the validity of the part-time employment contracts is that it is concluded in written (Article 38, §1, b’ of law 1892/1990). This contract must be registered within eight (8) days on the ERGANI Information System.

    4. The written form (the written, that is, the imprint of the relevant agreement between the employer and the employee) is required by law. Until very recently, non-compliance with the requirement to conclude such contracts in written resulted in: (a) either the invalidity of the whole contract when a contract was first entered into or (b) the invalidity of the term providing for part-time employment when we had a full-time contract amended. This invalidity was absolute. This meant that the courts should on their own rule them invalid, without one of the opposing parties having to previously ask the courts to do so.

    However, by the provision of Article 50 of Law 4611/2019, the last paragraph of Article 38  § 1 of Law 1892/1990 was replaced. It was therefore stipulated that in the absence of a formal document, the validity of a part-time agreement would not be affected. There is simply a rebuttable presumption in favor of a full-time contract. The same effect occurs when the relevant contract is not registered (within eight days) in the ERGANI information system.

     

    IV. The daily working hours of part-time employees

    1. The provision of § 7 Law 1892/1990, as in force today, provides:

    «7. If part-time employment is fixed on a daily schedule shorter than normal, the agreed upon part-time work must be continuous and provided once a day.

    The preceding subparagraph shall not apply to car drivers of pupils, toddlers and infants and their attendants who work in private schools, nurseries and kindergartens, as well as teachers working in foreign language and secondary education student tutoring centers. “

    2. Under this provision, the employment of part-time employees should be continuous and provided only once a day. The exceptions to this rule are: (a) car drivers for pupils, toddlers and infants and their attendants working in private schools, nurseries and kindergartens, and (b) teachers working in foreign language and secondary education student tutoring centers.

     

    V. The remuneration of part-time employees

    1. The provisions of §§ 6, 9 & 10 of Article 38 of Law 1892/1990, as in force today, provide:

    “6. In any case, employment on a Sunday or other public holiday, as well as night work, entails the payment of a regulatory premium.
    9. The remuneration of employees working under a part-time contract or relationship shall be calculated in the same way as the remuneration of a comparable employee and correspond to the part-time working hours.
    10. Part-time employees shall be entitled to annual paid leave and holiday pay, on the basis of the remuneration they would have received if they had worked at the time of their leave, for which the provisions of Article 2 (1) and (2) of law 539/1945, as in force, apply accordingly.”

    2. The remuneration of part-time employees is therefore not freely agreed between the employer and the employee. The provision of § 9 (above under 1) specifies the minimum threshold. In this context, the remuneration of part-time employees may not be (proportionally) lower than the statutory remuneration of full-time employees for the same work.

    The remuneration of part-time employees shall be calculated in proportion to those of the comparable employee. They correspond (proportionately) to the part-time working hours.

    A comparable full-time employee (section b’, §2, article 38 of Law 1892/1990-above under II.2) means any full-time employee employed in the same undertaking under an employment contract or relationship and performing the same or similar tasks, under the same conditions. However, there may not be a full-time comparable employee in the business. The comparison is then made with reference to the collective agreement to which the employee would be subject if they had been employed full time.

    3. Regarding the calculation of the minimum monthly wage of a part-time employee (Doc. No. 36311/840 / 5.11.2013 of the Labor Ministry):

    Weekly earnings are first calculated (the hourly wage of the comparable full-time employee times the part-time working hours on a weekly basis). What follows is divided by 6 and then multiplied by 25. [On the basis of the general principle that the monthly wage corresponds to 25 business days per month (on average) and 6 days of each week].

    Example:

    In a company that employs for five days a week and for 40-hours a week its full-time employees, the (part-time) employment of a employee was agreed to 25 hours of work per week, further distinguished by a five-day (Monday to Friday) five-hour work.

    Given that the remuneration of the comparable worker amounts to € 800 per month, the remuneration of the part-time worker will be as follows:

     (a) Hourly wage:

    Monthly renymeration for a comparable full-time employee/25 x 6/40

    [that is, Monthly Fee x 0.006

    -> 800,00 x 0,006

    -> 4,80 €.

    (b) Monthly remuneration of a part-time employee:

    Weekly part-time hours x Comparable hourly wage x Comparable hourly wage/6×25 x 6/40

    -> 25 x 4,8 / 6 x 25

    -> 500€

     

    VI. Work of the part-time employee beyond the agreed upon working hours

    1. The provision of Article 38 § 11 of Law 1892/1990 (as in force today after its replacement by Article 59 of Law 4635/2019) provides:

    “11. If there is a need for additional work beyond what is agreed, the employee is obliged to provide it if they are able to do so and if their refusal would be contrary to good faith.

    If work is provided beyond the agreed upon time, the part-time employee shall be entitled to a corresponding remuneration of twelve percent (12%) on top of the agreed remuneration for each additional hour worked. The part-time employee may refuse to provide work beyond the agreed time when such additional work is normally carried out. In any case, such additional work may be carried out up to the full day’s work of the comparable employee.”

    2. It is therefore possible that additional work may, temporarily, be required from the part-time employee. On the basis of the above (under 1), if the need arises, the employee concerned is, in principle, obliged to provide it. They, however, are not liable to provide it where the additional work requested: (a) is normally carried out or (b) exceeds the full time of the comparable employee or (c) cannot, in good faith, be provided by the employee.

    3. Additional, on top of the agreed upon, work shall, as already mentioned, be subject to a specific limit. It cannot exceed the daily working hours of the comparable employee. That is: (a) up to eighty (8) hours of daily work when the comparable employee is working five days a week; and (b) up to six (6) hours and forty (40) minutes of daily work when the comparable employee is working six days a week.

    4. Where work is provided beyond the agreed upon hours on an exceptional basis, the part-time employee shall be entitled to additional remuneration. Specifically, a twelve percent (12%) increase on top of their agreed upon salary for each additional hour of work.

    5. It is possible that the alteration in the work pattern is not exceptional. In this case there is no question of the employee’s obligation to comply. However, there may be a particular written agreement between the employer and the employee stating that the part-time employee’s weekly working hours or days will change on a regular basis. In the latter case, the part-time employee is not entitled to a 12% surcharge.

    Thus, in the context of the above (under IV.3) example, the part-time employee may be required to provide (on a non-regular basis) their work for one (1) extra hour each day within a given week. The remuneration for the five (5) extra hours worked (in excess of the agreed time) will be as follows:

     (a) Hourly wage:

    800,00 x 0,006 -> 4,80 €.

    (b) Overtime remuneration:

    Hourly wage x Extra Hours x 1,12 ->

    4,80 x 5 x 1,12 ->

    26,88€ (ie 5,376 € for each additional hour of employment).

     

    VII. Is the 12% surcharge in accordance with EU law?

    As mentioned above (under II.1), in the context of the harmonization of national legislation with Directive 1997/81, Article 38 of Law 1892/1990 was replaced by Article 2 of Law 2639/1998.

    The purpose of this Directive was to promote part-time work. This Directive also laid down the obligation of Member States to identify, address and, where necessary, remove barriers of a legal or administrative nature which may restrict part-time work opportunities.

    According to the Explanatory Memorandum of Law 4635/2019, the purpose of the above (under VI.1) regulation (referring to the 12% increase) is to “enhance the protection of part-time employees” and address the problem of underdeclared employment. That is to say, those cases where employment contracts only appear to be part-time. And, in fact, they “conceal” full-time employment.

    This recital does not seem sufficiently convincing. This is because it contradicts the principle of proportionality. The 12% surcharge is, in fact, an appropriate means of enhancing the protection of part-time employees and tackling the problem of underdeclared employment. On the other hand, this provision is not a necessary step to achieving these objectives. The State has and must have the appropriate means and measures to achieve its main objective. For example: by improving the means of surveillance and control. These instruments and measures would be both milder and less dangerous for the development, promotion and the very existence of part-time work as a form of flexible work organization.

    In this context, the legislator (with an increase of 12% in case of exceeding the agreed timetable) seems to have achieved the exact opposite of what they (allegedly) pursued. It is the legislator itself who creates an obstacle to the operation of part-time employment schemes. An obstacle that will, in any event, deter future contracts of this nature. To stop, in other words, the promotion of part-time employment.

     

    VIII. In conclusion

    There is no doubt that the part-time employment scheme can work in a business with changing needs. It has a positive effect on their development, there is no doubt about that. In the combat against unemployment. Sometimes in the survival of businesses but also in securing other jobs.

    The increase of 12% (introduced by the recent Law 4635/2019 – Article 59) is, according to its author, intended to protect part-time employees. Also: to address the problem of underdeclared labor.

    In reality, however, it intends to cover for the State’s inability to monitor. Burdening the business goes against the very institution of part-time employment. In so doing, it contradicts the European legislation itself (Directive 1997/81).

    The provision imposing a 12% surcharge on additional (part-time agreed) work should therefore be abolished.

    Immediately.

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (January 12th, 2020).

    part time

  • Wages due? (:The risks of the business)

    Wages due? (:The risks of the business)

    I. Preamble

    The “I am not paying” movement first appeared in 2008. Originally as a refusal to pay tolls. Following: refusal to pay for public transport, property tax and solidarity levy …

    Some claimed to be smarter than the rest of us, refusing to pay what was legally due. While the rest of us kept on paying …

    This Movement blew over when some of those who drove its actions came to power. Even more so: when it turned out that the law applies not only to those who respect it, but to the “smart” ones as well.

    What would the consequences be if a business decided to adopt the “I am not paying” logic with regard to the salaries of its employees? What are the consequences when a company chooses not to pay the salaries owed to one or more of its employees? Or when it truly is unable to pay them?

     

    II. The employer’s obligations under the employment contract – especially the obligation to pay wages.

    1. When an employer concludes an employment contract with an employee, they (the employer) undertake several obligations. Among them: protecting the life, health and personality of the employee.

    2. One obligation, however, stands out as the principal among the others. That of the payment of the established under the law or, where appropriate, the agreed upon salary (article 648 of the Civil Code). It is the employer’s consideration for the employee’s work.

    The employer’s obligation to pay the salary (whether it is the salary established under the law or the agreed upon salary) is complex. It includes the payment of the basic salary, as well as the payment of other, additional, wage benefits – e.g. of allowances.

    Salaries are not considerations freely agreed-upon. A salary is the means an employee supports their and their family’s livelihood. It is precisely this function that imposes certain thresholds. Those thresholds are set by law or a collective agreement.

    3. Specific legislative provisions aim at protecting wages and ensuring that they are paid. These include those relating to the claim by the employee of their (unpaid) salary – detailed below under III.

    However, the provision of article 48 of Law 4488/2017 added another weapon to the arsenal that the employee has at the expense of their employer. Possibly disproportionately powerful. In particular, the provision of Article 636A has been added to the Code of Civil Procedure. It specifically provides the employee with the option of issuing a payment order for wages due.

     

    III. The options of the employee in case their salary is not payed

    If the employer fails to pay the salary due, the employee shall be entitled:

    (a) To file a lawsuit. Requested: The wages due and even the relevant interest due, adding up from the date the salaries were due. Also: compensation for any damage suffered by the employee due to non-payment.

    (b) To apply for interim measures. Requested: Provisional award of the salaries demanded (728 Code of Civil Procedure) and / or any other appropriate measures.

    (c) To exercise the right stop providing their work. That is, to stop providing their work until the employer pays them the wages owed. By exercising this right, the employee renders the employer “defaulting” in accepting their work. This means, in practice, that as long as the employee refuses to provide his / her work (in the context of the above right), the employer continues to owe him / her his / her wages. As if the employee was working.

    (d) Apply for a payment order in respect of wages due. This procedure is initiated, as mentioned above (under II.3) under the (new) provision of section 636A of the Code of Civil Procedure.

     

    IV. Specifically: The issuance of a payment order for wages due to employees

    1. In general

    Of the above (under III) options given to employees, the most problematic and dangerous for the employer is the latter. In particular, the issuance of a payment order against them for wages owed. This is because through this process, the employee enjoys a number of important advantages. These advantages are related to the ease with which a payment order can be issued, as well as to the legal effects it brings. And these specific advantages are, at the same time, significant disadvantages for the employer …

    2. The provision of Article 636A of the Code of Civil Procedure

    According to Paragraph 1 of Article 636A of the Code of Civil Procedure: ‘… an order for payment of a remuneration may be requested, provided that the conclusion of the subordinate employment contract and the amount of the salary are proved by a public or private document or by an interim decision, which has been issued upon acknowledgment or acceptance of the application by the debtor, and if written notice has been served with a bailiff at least fifteen (15) days prior to the filing of the application. The work corresponding to the salary for which the order for payment is requested is presumed to have been provided. ”

    3. The facilitation of the Employee and the problems for the business

    The above (under 2) arrangement is beneficial for the employee and, at the same time, particularly problematic for the business. And this is because:

    (a) The employee (very easily) acquires an enforceable title against the business for their wages due, by having a payment order issued. This takes very little time and comes at a very low cost. At the same time, with this specific order (: payment order), the employee may seek enforcement (e.g. seizure) at the expense of their employer. The fact that an employee can acquire an enforceable title so fast is why the payment order has such a significant advantage compared to a lawsuit for wages due.

    (b) The employee has a lower burden of proof through this procedure. (This fact is also explicitly mentioned in the explanatory memorandum to Law 4488/2017-which introduced the provision of article 636A of the Code of Civil Procedure). The employee is required to prove in writing the conclusion of an employment contract and the amount of their salary. However, according to the explanatory memorandum to Law 4488/2017, the employee may use a wealth of evidence, such as “the printed extract from the employee’s personal account held in a governmental information system, such as the Labor Inspectorate, the Single Social Security Agency, the Independent Public Revenue Office or the offices of the Ministry of Finance, on the basis of information provided by the debtor employer or the public authority itself. ”

    If the employee uses any of these documents, he / she obtains an important (even if it is disputable) presumption. Specifically, that they actually provided the work corresponding to the salaries claimed.

    There is no doubt that in this way the employee’s burden of proof is facilitated in an absolute way. At the expense of the employer.

    (c) The employee shall be empowered to move rapidly and efficiently at the expense of their employer’s property. The employee (making use of the provision of Article 724 of the Code of Civil Procedure), may take advantage of another opportunity offered, one of major importance. They have the right, through the process the payment order, to register a charge or a preventive attachment on their employer’s real estate. Most importantly: they have the right to impose a conservative seizure on any of the employer’s other assets. However, what is most dangerous for the employer is the potential for the conservative seizure of their bank accounts and deposits.

    And all this, without requiring them to, at least, be served with the payment order. Such a “freeze” of the bank accounts of the business can only prove absolutely distressing and dangerous.

     

    V. The formal requirement of the (earlier) out-of-court declaration of the employee and the vigilance of the employer

    In order for the employee to obtain the payment order for wages due, the employee must notify the employer in writing. In particular, the employee must have served an out-of-court nuisance to his or her employer at least fifteen days prior to the filing of the request for the payment order. This formal requirement serves as a warning to the employer of the imminent issuance of the payment order, which may, within an extremely short time, bring about the extremely adverse consequences discussed above (IV).

    Once such an out-of-court declaration has been served, the employer must act immediately. In particular, the employer must either immediately overcome their inability to pay the wages due or prepare for the intended opposition (and suspension of execution?) against the payment order – and not only that. Their defense will be the proof that the salaries claimed are not due (Article 636A §3 Code of Civil Procedure). But even in this case, the consequences of (possibly) freezing their bank accounts will likely still be there (and still be extremely distressing). Working directly with their legal representative seems necessary …

     

    VI. In conclusion

    The employer’s potential inability (or refusal – even if it is justified) to pay their employees’ wages triggers indefinitely strong forces. The provision of Article 636A of the Code of Civil Procedure may prove extremely harmful to the employer.

    An employee who is or claims to be owed salaries is entitled to have a payment order issued. Then, without even giving it to their employer, the employee is entitled to make a conservative seizure of their employer’s bank accounts. It essentially blocks its operation completely. Either if the employer actually owes them money or the employee simply claims they owe it. Even if the employee is acting in bad faith.

    The ability of the employee to have a payment order issued is an (extremely dangerous and disproportionately powerful) weapon in their hands.

    The employer must be vigilant. Especially when they receive an out-of-court declaration from their employee for wages due. Even when they aren’t really due.

    Rationales of the “I am not paying” nature, even if “I do not have to pay” can prove to be problematic in this case as well. And dangerous. Even for the operation and the very existence of the employer’s business.

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (January 5th, 2020).

    wages due in Makedonia newspaper

  • Εmployee resignation

    Εmployee resignation

    Εmployee resignation (How dangerous can it be?)

    I. Preamble

    “I packed it all and left” Kimon (: Orpheus Zachos) said to his brother Philip (George Constantinou) in the famous Greek film of 1967 “Welcoming the Dollar”. Kimon was referring to his resignation, because the manager made the mistake of saying: “Mr. Angelucco, could you please bring me this folder?”.

    Kimon’s resignation was quite complex for his family, but very simple for the employer. Kimon, indeed, left. And the business did nothing. And it had nothing to do.

    But things are not as simple today. The consequences of failing to comply with the procedural requirements in the event of an employee’s resignation are probably unjustifiably detrimental to the business…

     

    II. The employment contract and its termination

    The employment contract is that which binds the employer to the employee for the provision of the latter’s services to the first.

    There are three ways to terminate an employment contract. Consensually, with the employer terminating it (: dismissal) and with the employee terminating it (: resignation).

    The resignation is effective after the employer or employee terminating makes a statement (expression of will). In case the employee wishes to terminate, such statement can also be implicit. But in case the employer wishes to terminate, their statement must be explicit.

    In a bit more detail, when an employer chooses to dismiss an employee, they are required to carry out a series of (necessary-procedural) actions. Failure to comply with the specific obligations has significant (and damaging) legal consequences.

    But even when the employment contract is terminated by the employee, the employer has to fulfill a series of (formal) requirements. In particular, the employer is obliged to announce the resignation of the employee to OAED through the “ERGANI” platform. The (specific) obligation to notify must be met within four business days after the resignation of the employee (Article 38 of Law 4488/2017). Failure to comply with said obligation can have extremely adverse consequences.

     

    III. The resignation of the employee and the obligations of the employer

    1. The provisions of the law

    1.1. According to Article 38 § 1 of Law 4488/2017:

    “The employer is obliged to submit, by electronic submission of the relevant forms provided in Ministerial Decision 295/2014 (B 2390) (form E5: Notice of resignation) to the Ministry of Labor, Social Security and Social Solidarity platform “ERGANI”, a notification in any case an employee resigns, of a termination of an employment contract set for an indefinite time or of a termination of a fixed-term employment contract or works contract, no later than four (4) business days after the employee’s resignation, the termination of a contract of indefinite duration or the termination of the fixed-term employment contract or works contract, respectively. ”

    1.2. And, under paragraph 2 of the abovementioned provision:

    “The notification of a resignation must be accompanied either by an electronically scanned form signed by the employer and the employee or by an out-of-court declaration by the employer informing the employee that such voluntary resignation has occurred and that their resignation will be submitted to the “ERGANI” information system. In the latter case, the employer ‘s extrajudicial declaration shall be served to the employee no later than four (4) business days after the voluntary resignation and the announcement shall be made the following business day after the extrajudicial declaration was served. If the employer fails to comply with the obligations relating to the voluntary resignation, including the submission of the accompanying documents, the employment contract shall be deemed to have been irregularly terminated by the employer.”

    2. Differences from the previously existing legislative framework

    The provision of article 38 of Law 4488/2017 introduced two important amendments to the provisions of the law so far regarding the obligation of the employer to announce the voluntary resignation of the employee (Article 2 Law 2556/97, Article 65 Law 3996 / 2011). Specifically:

    (a) It shortened the deadline to submit the notification, cutting it into half (from eight days to four days);

    (b) It provided for the compulsory attachment of the electronically scanned form E5 signed by the employee, which was, until then, optional.

    These amendments should not be treated as “just a formality” or as “minor”.

     

    IV. The obligations of the employer and the consequences of their non (timely) compliance

    1. The obligations of an employer in the event an employee resigns are two (which are basically fulfilled through ERGANI):

    (a) Announcement of the employee’s resignation in just four days

    (b) Submission of the documents required by law

    Possible non-compliance (or non-timely compliance) with the specific obligations of the employer can have extremely negative consequences. The main problem is that such omission serves as a presumption (fortunately refutable) in favor of the employee, that the latter’s voluntary resignation will be considered as an irregular termination of the employment contract by the employer.

    2. It is noteworthy that if four days after the employee’s resignation pass (without the required by law submission to ERGANI having taken place):

    (a) The system does not accept any late electronic submission of resignation – a handwritten submission must be submitter.

    (b) Late submission of a handwritten form E5 by the liable employer shall be deemed to be an irregular termination of the employment contract. This is even when the employee’s signature is on the form (: OAED circular no. 91869 / 21.12.2017).

    3. Any mistake by the employer or failure to act within the four-day period is not to be forgiven! In such a case, the employee has the right to claim that they were fired and did not resign. The law provides them with the relevant presumption and thus greatly facilitates a relevant evidentiary process.

    It is important to note, however, that such a (presumed) dismissal of the employee will be null and void. This is because the formal requirements of its validity have not been met. Moreover, the employer’s claim would be that there is not even a dismissal.

     

    V. The (possible) exploitation of the employer’s omissions

    In case the employer fails to fulfill their obligations, the employee has three options:

    (a) To accept (explicitly or implicitly) the resignation and the procedure that was followed – whereupon the employment relationship will be terminated.

    (b) To claim a dismissal compensation due to the dismissal having taken place without a notice.

    (c) To sue for claims resulting from the invalid dismissal. That is to say, late salaries but also their re-employment in the job.

    In each of the last two cases, the employer will have the burden of proving that the termination of the employment relationship was due to resignation rather than dismissal. What the employer would be asking for in this case would be to not be obliged to pay compensation or, alternatively, late salaries and to not be obligated to accept the services offered by the employee.

     

    VI. The problems of the employer

    In some cases, the employer faces particular difficulties when it comes to the timely announcement of an employee’s resignation. Specifically:

    1. The absence of the employee as an implicit termination of the employment contract – the time the relevant extrajudicial declaration by the employer was served

    1.1. When the employee:

    (a) stops coming to work without notice (or without an explicit statement of resignation); or

    (b) refuses to sign their resignation statement on the relevant form;

    The termination of the employment contract on their part is implicit. In this case, the employer faces significant procedural difficulties.

    1.2. According to the relevant legislation (III.1.2. above), the employer is obliged to make an out-of-court statement to their employee regarding their resignation, which has already taken place. But there is an important question to be asked, regarding the employer. Specifically: when exactly could they conclude that the employee implicitly terminated their contract, in order for the employer to make the relevant announcement to “ERGANI”?

    1.3. It should be stressed at this point that the abstention of the employee from their duties may be justified and legal (eg leave, pregnancy, maternity leave, enlistment and sickness – as provided by law). In such cases no one can expressly argue that the employee implicitly terminated the employment contract.

    1.4. But there are also cases of unjustified abstention from work. Cases associated with a refusal to cooperate and make their resignation formal.

    It is important in these cases to assess with sufficient certainty when exactly the employer receives the employee’s implicit declaration of termination. This point will be judged by the specific circumstances of each case. The case law gives one important (and indefinable) direction: good faith. It is therefore a question of interpretation that the employer can hardly manage.

    1.5. The fact that the announcement of the resignation to ERGANI should take place within a specified few days makes it even more difficult for the employer to choose. The law (article 38 of Law 4488/2017) does not help.

    The employer has a number of questions. Indicatively:

    (a) Can the employer (conventionally) agree with an employee that after a specific period of unjustified absence (eg three or five or ten days), it will be considered that the latter has resigned?

    (b) Will this (under a) period of time run parallel to the four working days of the employee’s absence provided by law (Article 38 § 2 of Law 4477/2017) and what are the legal consequences in this case? And, further, when exactly should the employer make their out-of-court statement in order not to be time-barred?

    (c) And if the employer can only act within these four days and make their extrajudicial declaration on the first day of the employee’s arbitrary absence, what would happen?

    It is safer to have the employer’s out – of – court statement served within four days after the employee’ s unjustified absence. However, each case should be evaluated individually, depending on the specific circumstanses.

    2. The (stifling) deadline of one day from the day the employer’s extrajudicial statement was served for posting the notice and the relevant proof that the statement was served to the employee to ERGANI

    This (indeed stifling) deadline is sure to cause serious practical difficulties, especially if the serving takes place far away from the headquarters of the company. And it consequently raises difficult questions for all employers. Indicatively:

    (a) If the declaration is affixed (Article 128 §4 Code of Civil Procedure – when, despite the process of serving may take more than one day, it is falsely considered that is has taken place on the day of the affixing), when should the submission (of the declaration and of the document proving the declaration was served) to ERGANI take place?

    (b) And, much like in the case of the affixing, what date should we consider as the date the declaration was serve to an employee who is of an unknown residence (Article 134 § 1, 135 §1, 136 § 1 Code of Civil Procedure), given the procedural steps mentioned above? And when should the submission of the extrajudicial declaration and proof that the declaration was served be submitted?

    In the first of the above cases, it is more appropriate not to take into account the retroactive effect of the service, but the time taken to complete the relevant procedural steps. The day after their completion, the submission to “ERGANI” should take place. Otherwise, it would always be impossible to meet the deadline (Law 4488/2017, Article 38 § 2, esp. (c) above under III.1.2). In the latter case, however, the solution is provided by Article 136 par. 1 Code of Civil Procedure. According to this article, the submission to “ERGANI” should take place on the next business day following the completion of the publications, in accordance with Article 135 par. 1 of the Code of Civil Procedure, and for the delivery of the extrajudicial declaration within the prescribed four-day deadline, to take into account the initial service to the competent prosecutor.

    And, as if all of these problems were not enough, there is one more to add to the pile of problems a business has to bear:

    Paragraph 5.20 of (the subsequent) Ministerial Decision No. 40331 / D1.13521 / 19.9.2019 (referring, inter alia, to the electronic submission of forms to ERGANI) provides that the deadline for submission of the E5 form is four days after the voluntary resignation. This provision, however, is contrary to Article 38 § 2 Law 4488/2017-above under III.1.2.), which stipulates that when an extrajudicial declaration regarding an employee’s resignation is served, the deadline for notifying ERGANI is five (and not four) days.

     

    VII. Epilogue

    Employee rights are a given. And must be respected.

    And so is the protection they need to enjoy from the State and business.

    But one question still seems to be important: Does the legislator not have to make good legal (technically speaking) texts?

    And, even more so, when laws prove to be problematic on many levels, isn’t the legislator responsible for their modification?

    The presumption of irregular termination of the employment contract in the event that the employer fails to timely meet their obligations: (a) to have the relevant extrajudicial declaration served to the employee, (b) to submit the relevant document proving the declaration was served to ERGANI and (c) to post the relevant accompanying documents, is unjustifiably tough on the business. And even more so: it also works, unjustifiably, in favor of the employer operating in bad faith.

    And, as if all this was not enough, the recent Ministerial Decision (under V.2 above) was issued, which, illegally, unjustifiably reduced the deadline for submitting to ERGANI the proof of service required by law.

    One thing is certain:

    Growth support cannot go through legislative paths that not only do not solve, but also create problems for businesses, adding to the already existing problems.

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (December 29th, 2019).

    οικειοθελής αποχώρηση

  • Accident at work (the, already unlimited, employer liability…)

    Accident at work (the, already unlimited, employer liability…)

    I. Preamble

    Most ancient Greek philosophers were concerned with destiny (and the inability of men to define it). This is why there are so many quotes referencing destiny. The most known of them, “destiny is impossible to escape” («το πεπρωμένον φυγείν αδύνατον») is attributed to Pindar. The relevant Socratic phrase is more or less the same: “no one can avoid destiny” («Την ειμαρμένην ουδ’ αν εκφύγοι»).

    Regardless of one’s position on destiny and fate, the law does not consider destiny at all.

    Even when we talk about accidents. Especially accidents at work.

    And then responsibilities are sought.

    And persons to be held responsible.

     

    II. Protection of workers

    Protecting the health and physical integrity of workers when they are working must be (and largely is) the responsibility of the State and the legislator. To a significant extent of the business as well. The humanitarian dimension is critical (as well as self-evident). But the financial aspect of accidents at work is also important: accidents at work and occupational diseases come at a cost. And not a negligible one: a cost burdening the victims, businesses, insurance companies, insurance organizations. Of course the community as well.

     

    III. Accident at work

    1. Legal definitions

    Article 1 of Law 551/1915 provides: “Accidental incident, deriving from a violent event, involving a worker or employee doing one of the works referred to in Article 2, while they are performing or on account of the work, the owner of the business shall provide a compensation to the persons entitled, in accordance with the provisions hereof, in the event that the absence from work caused by the accident is more than four days, except in the case where the worker or employee had intentionally caused the accident.

    Correspondingly, the provision of Article 8 law 1846/1951 (: “IKA (Social Security of employees) Institutional Law”) defines an accident as: “The violent incident or occupational disease occurring at work or because of work”.

    1. Therefore: The concept of an accident at work

    The concept of an accident at work covers any violent event that causes damage to the health of an employee. Requirement: it must have occurred while the employee was performing their job or because of their job. The concept of an accident at work also includes occupational diseases which are (directly or indirectly) related to the work of the victim. More precisely: if it is in a causal (direct or indirect) link with their work. Sometimes case law seems to, unfortunately, end up adopting extreme positions on what constitutes an occupational disease.

    1. Employer liability in the event of an accident at work

    The employer is obliged to compensate the victim (Article 2 of Law 551/1915). This is because (in accordance with Article 662 of the Civil Code): “the employer is responsible for the work and the place it is performed, as well as the residence, facilities and machinery or tools in order to protect the life and health of the employee.”

    Consequently, taking appropriate measures to prevent an accident at work is one of the basic obligations of the employer. It is noteworthy that in the event of an accident at work, the employer is burdened with the strict liability to provide the victims with compensation. In addition: to compensate their relatives (in case of death). It is also noteworthy that the liability of the employer is independent of the fault of the employer or of their agents.

    IKA (today EFKA) contributes (d. 1846/1951) to the compensation of the worker who suffered an accident at work. The employer’s liability for compensation of the employee extends, at least at first, beyond the contribution of EFKA.

    1. The coverage and contribution of EFKA

    When an accident causes the (insured) employee to be unable to work, they are entitled to receive (or, in the event of their death, the persons entitled) the insurance benefits provided by law (Act 1846/1951). Examples: medical care, sickness benefit, disability pension during his or her incapacity. In this case the employer is relieved of their responsibilities (from the Decree of the 24th of July 1920 “on the Codification of the Laws on the Liability of Compensation for Workers or Employees Involved in an Accident at Work”: liability for compensation, hospitalization and funeral). However, the employer (according to law) is not relieved from their duty to pay compensation for moral damage or for the psychological distress of their family (in the event of their death).

    When an employee, insured under EFKA, has an accident, they are entitled to the benefits provided, and the employer is exempted from any liability [under Law 551/1915 or under common law (Article 60 § 3, a). 1846/1951].

    The consequences of an accident at work are particularly (and on many levels) significant. It always activates provisions providing the affected employee with benefits. But it also activates the employer’s and business’s possible administrative, civil and legal responsibilities.

    It is important to note that the deadline for reporting the accident is extremely short (five days). It must be emphasizes, although unnecessarily, that the description of the accident should not be a ‘typical’ procedure. It should always take place with special care.

     

    IV. The responsibility (and waiver of responsibility) of EFKA

    1. The existing institutional framework

    1.1. The conditions for EFKA to claim from the employer everything it has paid.

    (a) The provision of Article 34 § 2 a. 1846/1951 states:

    «2. If, by judicial decision, it is ascertained that when the accident occurring in the performance or on account of the work is due to the misconduct of the employer or the person added thereto, the employer shall be liable to pay: (a) to IKA, every expense it made, for the benefits it provided due to the accident, (b) to the victim, or, in the event of their death, to the persons referred to in Article 28, the difference between the amount of the compensation due under the Civil Code and the total amount of the compensation benefits granted according to this  law… “.

    (b) Simply put: If a court ruling deems the employer or their agents fraudulent, the employer is obliged to pay to EFKA what the latter (EFKA) has paid to the employee (or, in the event of their death, to their relatives).

    1.2. The (previous) controversies regarding the employer’s misconduct

    The above provision (under 1.1.a) is particularly important. This is because, in the event a court finds a misconduct on the part of the employer, they are the one who bear the sole burden of compensating the employee (or, where appropriate, his or her relatives) in the event of an accident at work. In such a case, EFKA would be completely exempt.

    The payment by the employer of the social security contributions of their employees aims, inter alia, at mitigating their (strict) liability from possible accidents at work. When, however, is it considered that the employer should not be assisted by EFKA?

    It is true that there has been a lot of debate in the legal world about the exact content of (required by law) employer misconduct. Could we assume that an employer intends(!) to have an accident happen to an employee?

    In one hand, the employer’s misconduct (and their full liability) only existed if the misconduct also covers the outcome of an accident at work. That is, in cases where the employer wanted or accepted as probable the harm of the employee.

    According to others, the concept of fraud in the aforementioned provision also refers to the case where the accident at work is causally linked to fraudulent breach by the employer of the laws, decrees and regulations providing for the mandatory measures for the protection of safety and health at work.

    In order to clarify the specific legal considerations, the legislator undertook the authoritative interpretation of this provision. And the result was not in favor of the employer.

    1.3. The (rather unlimited) expansion of employer liability

    (a) Article 212 of Law 4512/2018 provides:

    ‘The true meaning of Article 34 (2) of Law 1846/1951 (A’ 179) is that the employer is obliged to pay the expense provided for under:

    (i) paragraph 2 and the difference between the amount, according to the Civil Code, of the compensation and the insurance benefits provided for in point,

    (ii) of paragraph 2, where, by judicial decision, it is found that the accident, in the performance of, or on the occasion of, the work, is due to the act of the employer or the added person from them, or as a result of the accident itself or in non-compliance with the provisions of laws, decrees or regulations which define the safety and health measures at work, if the accident is causally linked to violations of these provisions.”

    (b) Simply put: It is possible (and of course extremely common) for a court to associate an accident at work with a breach of an obligation to take (mandatory as per the existing institutional framework) measures relating to the health and safety of workers. 

    In this case:

    (i) the employer is considered to have acted fraudulently and

    (ii) the employer is also liable for what EFKA was obliged to pay to the employee who suffered the accident or, in the event of their death, to their relatives.

     

    V. Regarding the extent of the liability and risks of the business

    The primary responsible for compensating the victim is, at least at first – according to law 1846/1951- both the business and EFKA.

    In the event accidents at work occur, the liability of the employer and the business is already extremely wide (above under III.1.3.a).

    Failure to comply (or failure to least imperfectly comply) with safety standards in an enterprise constitutes the necessary grounds for the full relieving of the EFKA of its obligations to the affected employee. What EFKA paid for it is then sought by the company. The insurance contributions paid by the employer on behalf of the employee do not appear, in this case, to ‘be worth something’ …

    Experience has also shown that it is extremely easy for any accident, in any business, to be attributed (and is easily attributed) to incomplete compliance with safety standards. This fact establishes the employer’s misconduct (!!!). And, as a consequence, the sole responsibility of the employer and the full exemption of EFKA from any liability before the affected employee.

     

    VI. In conclusion

    It is only natural that the modern legislator does not deal with accidents at work as they were doing so in ancient Greece. Let alone dealing with them by invoking (the inevitable) destiny.

    But the company’s liability regarding accidents at work has already become very broad. Possibly: unjustifiably broad.

    Compliance to safety standards is not sufficient on the part of the business. It is also mandatory to invoke and prove such compliance. A slightly differentiated view of the auditors appointed to the specific accident at work can lead to significant (possibly even disastrous) consequences for the business and the entrepreneur.

    What should be done? It is imperative not only to comply with the safety standards but also to be able to prove (full) compliance.

    Even more:

    Extremely careful management of (in any case, completely undesirable) accidents at work is absolutely crucial. Regardless of whether one believes (or does not believe) in “destiny” and “fate” one thing is certain: The (possibly extremely) adverse consequences of an accident at work can certainly be mitigated.

    The same goes for the consequences affecting the business.

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (December 22nd, 2019).

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