“Settlement of amounts due to the Social Security Funds, Tax Administration and 1st degree municipal authorities – Public Sector Pension Regulations and other social security and pension regulations – Improvement of the employees’ protection and other provisions”
Law 4611/2019 (Official Government Gazette A’ 73/17.05.2019) includes, amongst its other provisions, important employment provisions, which are summarized as follows.
- In addition to the conditions of validity of termination of employment agreements under the previous framework (written form, payment of the dismissal indemnity due etc.), the new law now requires for a substantial reason in accordance with article 24 of the Revised European Social Chart (ratified by Law 4359/2016). This provides that in case of termination of the employment relationship, the parties assume the obligation to recognize (a) the right of the employees not to have their employment agreement terminated without a substantial reason related to their abilities or behavior or the operational needs of the employer, (b) the right of the employees terminated without a substantial reason to sufficient compensation or other suitable restoration and (c) that the employee who considers that his employment relationship has been terminated without a substantial reason can have recourse to an impartial body.
The above provision introduces to the Greek legal system the principle of justified termination on substantial reason, which, in case of doubt, must be proven by the employer (together with the other conditions of validity). - In case of loss arising for the employer due to the employee’s negligence during the execution of his services, the release of the employee by virtue of a court decision (especially in case of slight negligence) or the split of the loss between the employer and the employee by allocating to the employer the loss corresponding to the employer’s business risk or the loss which is disproportionate to the benefit of the employee from the employment agreement is introduced. Any agreement between the employer and the employee broadening the employer’s liability in course of the execution of his employment duties is invalid.
- In case of part time or rotating employment, in addition to the failure of the employer to file the agreement with accordance that the Employment Authorities within 8 days from its conclusion, failure to have the related agreement concluded in writing now constitutes rebuttable evidence of full time employment.
- As of 1July 2019 dismissal indemnities payable to private sector employees as well as the corresponding income tax are paid by the employers through bank accounts and are transferred and paid by the banks to the employees’ and the State’s bank accounts.
Similar regulations are also provided for the compensation and social security contributions of private sector trainees and apprentices, whereas it is also provided that non compliance of the employer with the above obligations entails the cessation of the training or apprentice agreement as well as the exclusion of the employer from training and apprentice programs for a period of 2 years. - The obligation of electronic registration of the annual vacation with the ERGANI Information System within up to 1 hour following its commencement is introduced. The related obligation will come into force as of the issuance of the ministerial decision required, which will define the registration procedure, the data to be registered and any other detail required for the compliance with the related obligation.
- The access of the employees to the Information System ERGANI in order to recover their employment related data is introduced. The related possibility will come into force as of the issuance of the ministerial decision required which will define the access method, the data to which access is granted and any other related detail.
Comments
- In our opinion, the obligation to justify the dismissal as a condition of the latter’s validity does not significantly amend the existing framework. Based on the currently applicable jurisdiction the dismissal could be appealed by the employee as abusive (entailing as a result the dismissal’s invalidity). The amendment in question, however, imposes new obligations on the employers and raises significant obstacles on the companies as far as the management of their personnel is concerned and could impede new hirings. Further, following the introduction of this amendment, many dismissal cases might be brought before courts, burdening courts’ workload and increasing both the employment insecurity and business uncertainty.
Moreover, the provision in question does not clarify the nature or extent of the “sufficient compensation or other suitable restoration” although the Law’s Introductory Report should not be confused with the dismissal indemnity provided for by Law 2112/1920. In this context, it could be argued that justified dismissals might lead to the partial abolition of dismissal indemnities in case of legal dismissals.
Reference to the employee’s right to have recourse to an impartial body raises questions as to whether the law refers to the establishment of another impartial body, in addition to the Greek courts or the ones of the Employment Authorities.
It is important that the competent Ministry issues the Ministerial Decisions required for the above provisions. - The amendment of the legislation on part time and rotating employment does not significantly affect the previous framework as failure to have a written agreement concluded rendered the notification of the arrangement with the employment authorities infeasible, which qualified as rebuttable evidence of full time employment under the previous framework as well.