Vassilios Kartaltzis and Partners/Associates Law Office deals extensively with issues of termination of employment contracts (dismissals) regarding both employment contracts of indefinite duration/term and fixed-term contracts. We provide comprehensive consultancy services and legal representation before all Greek Courts with reference to redundancy issues.
Those issues, especially in times of crisis, they are particularly relevant, since on one part, the tendency to reduce costs, but also the effort of to maintain working posts, on the other part, create conditions that often come into conflict. This phenomenon and the “controversy” is accentuated by the successive legislative amendments to the provisions of the law on the termination of employment contract. Furthermore, our knowledge and expertise on other law systems of the European Union, allows our team of lawyers to have a global view on the issue which is very supportive, not only in cases with foreign elements.
According to Greek Labour Law, the employment contract of indefinite duration constitutes the main form of dependent employment, which was selected by the Greek and international legislation, in order to protect the employee. The termination constitutes a non-causal legal act, which means that it may take place at any time period, provided that the below mentioned formal prerequisites are followed: a) the termination must be made in written; b) the dismissal compensation must be paid; c) the employer should have had registered the redundant in the records kept with the Social Insurance Institute [IKA] regarding remuneration scales or at least he/she should have had insured the employee in the Social Insurance Institute [IKA] (Article 2 par. 4 of Law 2556/1997). This so-called “formal validity prerequisites”.
According to Labour Law theory and case law, the most significant instrument used for the restriction of the employer’s free right to dismiss employees arises from article 281 of the Hellenic Civil Code for the abuse of rights (negative substantive prerequisite). In accordance with article 281 of CC: “Exercising a right is prohibited if it manifestly exceeds the limits of good faith or morality or the social and economic purpose of the right”. This article constitutes a general clause.
Therefore, by using the principle of good faith as per article 281 of CC, case law, as formed by Greek courts of any Instance up to the Supreme Court (Areios Pagos), managed to restrict significantly the freedom of the right of terminating employment contracts. This means that even if the termination of employment contracts is non-causal (no special reasons are required to justify the termination), the employer is not entitled, pursuant to the courts’ decisions, to terminate the employment agreement contrary to good faith or morality. The incentives and the reasons that led the employer to the employee’s dismissal must not be disputed. Therefore, the termination of employment contract is deemed void, when:
- The employee was dismissed because he/she claimed his/her legal rights judicially or extrajudicially, e. the termination is deemed void, when it comes as a result of the employee’s appeal to the Labor Inspection Authority (SEPE) or before the court, or when the employee has denied to execute an illegal act or to accept unilateral harmful alterations by his/her employer etc. The termination is also considered invalid when the employee has developed his/her trade union action etc..
Legislative Amendments
While for decades the law of termination of employment contracts in our country was regulated by two principal laws, namely Law 2112/1920 and Law 3198/1955, since the year 2010 onwards, due to the economic crisis, a number of legislative amendments was made, particularly with reference to the notice of dismissal and the dismissal compensation.
Thus, in accordance with Article 17 of Law 3899/2010 “Urgent measures for the application of the Greek economy support program”):
- “In case the employer’s business activity reduces, instead of the terminating employment contracts, the latter may dictate a system of work by rotation within the company, the duration of which may not exceed nine months in the same calendar year, provided that the employer has already informed and consulted with the legitimate representatives of employees, pursuant to the provisions of Presidential Decree 260/2006 and Law 1767/1988. “
- The employment contract of indefinite duration is deemed as employment probationary period for the first twelve (12) months from the day of entry, which may be terminated without prior notice and without severance pay, unless otherwise agreed by the parties.
Subparagraph IA.12 of Article 1 of Law 4093/2012 “Approval of the Medium-term Fiscal Strategy Framework 2013-2016 – Urgent Application Measures of Law 4046/2012 and of the Medium-term Fiscal Strategy Framework 2013-2016” (as amended by paragraph 9 of Article 10 of the act of legislative content dated 19.11.2012) introduces a new method of determining the compensation in case of dismissal of private employees with employment contracts of indefinite duration/term.
- The new dismissal notice period in case of termination of employment contract of indefinite duration for private employees with dismissal notice (the so-called regular notice) are as follows:
- For employees who have been employed by the same employer from twelve (12) full months up to two (2) years, the period of the dismissal notice is one (1) month before the termination of the employment contract.
- For employees who have been employed by the same employer from two (2) years up to five (5) years, the period of the dismissal notice is two (2) months before the termination of the employment contract.
- For employees who have been employed by the same employer from five (5) years up to ten (10) years, the period of the dismissal notice is three (3) months before the termination of the employment contract.
- For employees who have been employed by the same employer from ten (10) years onwards, the period of the dismissal notice is four (4) months before the termination of the employment contract.
The written dismissal notice is valid from the day after the (written) notification to the employee. Therefore: a. The estimation of the time required for the dismissal notice starts from the day after the employee has been notified of his/her dismissal and ends when it reaches the deadline of the notice period, which signifies the termination of the employment contract. However, contrary to former provisions, the termination of the employment contract is currently considered to have taken place at the time of the receipt by the employee of his/her dismissal notice. b. In accordance with paragraph 1 of Article 9 of Law 3198/55 (A’ 98), as currently in force, the eight (8) days deadline within which the employer must fulfil his/her obligation to communicate the dismissal to the Greek Organization for Employment of Workforce, begins on the day after the service of the written notice to the employee (Article 241 CC).
Therefore, the employer, who terminates an employment contract of a private employee by previously serving him/her a dismissal notice, is obliged to pay to the redundant 50% of severance pay for termination without previous dismissal notice pertaining to private employees with employment contracts of indefinite duration. This compensation must be paid at the time of termination of his/her employment contract, namely when the deadline for the dismissal notice ends.
Dismissal compensation in case of termination of employment contract without dismissal notice
The provision of section 2 of subparagraph IA.12 of article 1 of Law 4093/2012 replaces paragraph 1 of article 3 of Law 2112/1920 (A’ 67), as currently in force, thus leading to a radical reform of the framework of estimation of the amount of the dismissal compensation regarding private employees with an employment contract of indefinite duration. Thus, in the event of termination of employment contract of indefinite duration of private employee without dismissal notice, the amount of the dismissal compensation is determined as follows (unless a higher compensation was determined by a private agreement):
TABLE 1. TERMINATION OF EMPLOYMENT CONTRACT WITHOUT DISMISSAL NOTICE (EXCEPTIONAL TERMINATION)
|
Time of employment |
Amount of dismissal compensation (in months) |
|
|
with the same employer |
|
|
|
From 12 full months to 4 years |
2 |
|
|
|
|
|
|
From 4 full years to 6 years |
3 |
|
|
|
|
|
|
From 6 full years to 8 years |
4 |
|
|
|
|
|
|
From 8 full years to 10 years |
5 |
|
|
|
|
|
|
From 10 full years |
6 |
|
|
|
|
|
|
From 11 full years |
7 |
|
|
|
|
|
|
From 12 full years |
8 |
|
|
|
|
|
|
From 13 full years |
9 |
|
|
|
|
|
|
From 14 full years |
10 |
|
|
|
|
|
|
From 15 full years |
11 |
|
|
|
|
|
|
From 16 full years onwards |
12 |
|
|
|
|
In order to calculate the above compensation one should take into account the regular salary of the last month prior to his/her dismissal, when working full-time, with the exceptions provided by law.
iii. Dismissal Compensation of employees, who have completed seventeen (17) full years of work with the same employer on 11.12.2012.
With the exception of the compensation defined in above Table 1, in case of an employment contract being terminated, this category of employees, regardless of their date of dismissal, they have the right to receive extra compensation, which is increased by a monthly salary for each additional year of employment and may reach up to 12 monthly salaries. In particular, in order to calculate the above compensation, we consider as working time, the period of time that the employee was working for the same employer until 12.11.2012 (date of publication of Law 4093/2012), regardless of the actual date of his/her dismissal. The calculation of this additional compensation is based on the regular salary of the last month before the termination of the employment contract, working full-time, without taking into consideration the regular salary of an amount exceeding two thousand (2,000) euros.
This additional compensation is formed in accordance with the following Table:
TABLE 2. ADDITIONAL COMPENSATION
|
Time of employment with the same employer on 12.11.2012 |
Amount of dismissal compensation (in months) |
|
|
|
|
|
|
17 full years |
1 |
|
|
|
|
|
|
18 full years |
2 |
|
|
|
|
|
|
19 full years |
3 |
|
|
|
|
|
|
20 full years |
4 |
|
|
|
|
|
|
21 full years |
5 |
|
|
|
|
|
|
22 full years |
6 |
|
|
|
|
|
|
23 full years |
7 |
|
|
|
|
|
|
24 full years |
8 |
|
|
|
|
|
|
25 full years |
9 |
|
|
26 full years |
10 |
|
|
27 full years |
11 |
|
|
28 full years onwards |
12 |
|
|
|
|
|