Koumentakis

Tag: employees

  • Employees and Craftsmen, Salary and Daily Wage

    Employees and Craftsmen, Salary and Daily Wage

    An old Labor Law distinction is that between employees and workers/craftsmen. A distinction that often resulted in significantly more favorable arrangements for the former. The legislative provisions, however, equalize, more and more over time, the specific categories. The recent labor law (:n. 4808/2021), which abolished the most important differentiation in force (:the amount of severance pay due), is another step to this direction. However, the specific distinction (: employees and craftsmen) still creates problems. And so do the regulations of the relevant Ministry. Is there an inseparable link between the salary and the employee and between the daily wage and the craftsman? Can we agree that they will be compensated the other way around?

     

    Employees and craftsmen: the criteria of distinction

    The substantive criterion

    The criterion for distinguishing between employees and craftsmen is the type of work provided. Physical labor is intertwined with the craftsman; intellectual labor with the employee.

    According to the law: “An employee of the private sector, within the meaning of this Law, is considered to be any person who is professionally occupied in exchange for remuneration, regardless of the method of payment, by a private shop, office or in general a business or any work and is one who provides work exclusively or mainly of a non-physical nature. They are not considered employees of the private sector those who are providing work in production directly as an Industrial, Craftsman, Mining or Agricultural worker or as an assistant or apprentice of the categories in above or who provide servile service in general” (art. 1 legislative decree 2655/53 “on amendment… of law 2112/1920 on termination of the employment contract”).

    The Supreme Court, specifying the specific-substantive criterion, consistently accepts: “…The work of a worker is considered to be that who provides exclusively or mainly physical labor, while, when the work is a product of mental labor, then and if the worker has the training and experience required for it and performing it responsibly, is considered the work of an employee and those who exercise it belong to the category of employees of the private sector.

    Therefore, in order to qualify a person as an employee, specialized experience, theoretical education and especially the development of initiative and taking responsibility during the execution of the work are required, because only when these elements are present during the execution of the work, the mental element outweighs the physical (Plenary Session of the Supreme Court 295/1969, Supreme Court 661/2019, Supreme Court 1391/2018, Supreme Court 1114/2017, Supreme Court 1405/2014).” (ind.: 355/2021 Supreme Court).

    In the above context of determining the content of the substantive criterion, the following have been ruled as employees (incl.): the supervisor of workers in a textile factory (257/1990 Supreme Court), the maintenance engineer (743/1993 Supreme Court), the foreman in a soap factory who is charged with the responsibility of production (591/1953 Supreme Court), the hairdresser (1437/2004 Supreme Court). On the contrary, they were found to be workers: the usher (132/1990 Supreme Court), the cleaner (464/2014 Supreme Court), the factory guard (932/1983 Supreme Court), the cutter of men’s clothes who uses technical means (1461/1987 Supreme Court).

    The formal criterion

    In some cases, however, there is no point in checking, under the prism of the substantive criterion, for the characterization of an employed person as an employee or craftsman. This happens when the law itself assigns to some categories of workers the status of an employee – subject to the presence of specific formal conditions (: formal qualifications).

    The legislator has characterized, e.g., as employees: junior health workers (legislative decree 199/1936), graduates of the School of Tourism Professions (law 567/1937), electricians, welders, radio technicians and shore heaters (law 3763/1957) etc.

    It is true that some of the above-mentioned cases of workers could possibly be characterized as craftsmen, using the essential, only, criterion – without the relevant legislative provision.

     

     The irrelevance of the payment method

    The distinction between employees and craftsmen is particularly difficult in some cases. Accordingly, so is the characterization of an employee as an employee or craftsman. One thing is certain: the method of remuneration of the employee cannot be a criterion for the characterization.

    The usual method of remuneration for craftsmen is the daily wage. On the other hand, common the method of remuneration for employees is the salary. However, despite the common practice, it is clearly permissible to pay a salary to the craftsmen and correspondingly, a daily wage to the employees.

    This is clearly evident from the above-mentioned provision (: article 1, legislative decree 2655/53), where an employee of the private sector is defined as “…any person whose main occupation is engaged for remuneration regardless of the method of payment…”.

    The exact same position is adopted by jurisprudence. Specifically, it is accepted that: “…the distinction of the employed person as a worker or an employee depends on the type of work provided and not on the content of the contract characterizing them or the method of their remuneration.” (ent.: 9671/1999 Court of Appeal of Athens, 839/1987 Supreme Court).

     

    Employees and craftsmen: the importance of the distinction

    They regime previously in force

    Before the entry into force of Law 4808/2021, the distinction between employees and craftsmen continued to be of particular importance (almost exclusively) in the case of termination of an indefinite-term employment contract.

    The first distinction between the two categories concerned the condition of warning before termination. While such a condition was (and is) provided for employees, there was no corresponding provision for craftsmen.

    More important, however, was the second and dubious constitutional differentiation, which related to the amount of severance pay. The severance pay of employees was significantly higher than that of craftsmen.

    The current regime

    As we already pointed out, in a previous article, the above differences were equated with Law 4808/2021.

    Specifically, the provision of art. 64 Law 4808/2021 is titled: “Abolition of discrimination between employees and craftsmen” – and its provisions have recently (from 01.01.2022) entered into force (Article 80 §2 Law 4808/2021). Of course, the provisions of this article are limited, in the end, to the abolition of discrimination in terms of the termination of the employment contract of indefinite duration. Based on the specific provision (§1), any distinction “…with regard to the notice period and the termination of labor contracts” is abolished.

    And further: “Law 2112/1920…, Law 3198/1955… and any other provision, which governs the termination of the contract or employment relationship of employees, are also applied to craftsmen. For the implementation of this, twenty-two (22) daily wages are considered as the monthly salary of the craftsman, unless they are already paid a monthly salary” (§§ 2 & 3).

     

    The question of the remuneration of the craftsmen

    Minimums (salary and daily wage)

    The choice of 22 daily wages by the legislator raises some questions (art. 64§3 Law 4808/2021). The connection of the craftsman’s monthly salary with the sum of 22 daily wages has no previous legislative basis.

    However, it could be argued that this choice of the legislator reflects the impasse in the way of determining the remuneration of the craftsman.

    Specifically, the very recent Decree No. 107675/2021 of the Minister of Labor and Social Affairs (Government Gazette B’ 6263/27.12.2021) provides for the determination “…in accordance with the provisions of Article 103 of Law 4172/2013 (A’ 167), of the legal minimum wage and the legal minimum daily wage, for full-time employment, for employees and craftsmen throughout the country, without age discrimination, as follows:

    a) For employees, the minimum salary is set at six hundred and sixty-three euros (€663.00).

    b) For craftsmen, the minimum daily wage is set at twenty-nine euros and sixty-two minutes (€29.62)”.

     

    The concerns

    The method of payment (:salary vs daily wage)

    First of all, the very letter of the above Ministerial Order is troubling. As we have already pointed out, the way employees and craftsmen are paid is not a criterion for distinguishing them. Both employees and craftsmen may be paid in whichever way they agree with their employer.

    However, the MO unfortunately links the minimum wage to employees and the minimum daily wage to craftsmen.

    How compensation is calculated

    Furthermore, as we mentioned above, the legislator in article 64 §3 of Law 4808/2021, in order to calculate the craftman’s severance pay, considers that their assumed monthly salary is equal to 22 days’ wages. That is: (22 X €29.62:) €651.64. It therefore falls short compared to the employee’s minimum wage.

     

    The distinction of workers in the two major categories (: employees and craftsmen) is a given. Indeed, the specific distinction exists at a theoretical level and will remain so as will the relevant legislative regulation mentioned in the introduction. However, the intention of the legislator for the equalization of the two separate categories is already apparent (see severance compensation equation).

    The way we see it, however, the connection of employees with a monthly salary and workers with a daily salary is a given, albeit incorrect. Even the relevant Ministry continues, completely missing the mark, to adopt this specific, without any legs to stand on, position and matching; we look forward to its amendment.

    Lastly, the complete elimination, in time, of the distinction between employees and workers is a given (and is expected).

    However, until the complete elimination of this discrimination, any of its effects will become less and less visible.

    However, of course we are entitled, until then, to agree on the payment of wages to craftsmen (as well as daily wages to employees).-

    Stavros Koumentakis
    Managing Partner

     

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (February, 6th, 2022).

     

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

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

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

    I. Preamble

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

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

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

     

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

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

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

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

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

     

    III. Executives and labor legislation

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

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

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

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

     

    IV. The designation of an employee as an executive

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

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

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

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

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

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

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

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

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

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

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

    (a) The amount of remuneration

    The remuneration of executives must be particularly high. There are no absolute approaches (and there, of course, could not be any). The comparison measure (must) be twofold: (i) the minimum legal salary of the post in question and (ii) the remuneration of other employees in the company concerned. Particularly high salaries do not always lead, in an inevitable consequence, to an employee being classified as an executive. Especially when those high salaries are associated with the employee’s long experience and several years of prior professional experience (SC 1148/2017, SC 747/2007).

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

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

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

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

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

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

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

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

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

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

     

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

    1. Legislative and jurisprudential consequences

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

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

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

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

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

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

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

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

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

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

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

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

    3. Executive officers and trade unions

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

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

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

    4. Continuing to include executives in the category of employees

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

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

     

    VI. In conclusion

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

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

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

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

    stavros-koumentakis

    Stavros Koumentakis
    Senior Partner

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

     

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

  • 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

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