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.
