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Greece – A new legal framework for termination of employment contracts

Written by
KREMALIS LAW FIRM, offering full service for employment matters in Greece.
Employers in Greece will have to provide a business-related reason for terminating an employee’s contract following the adoption of new legislation.

A recently passed Greek law (Law 4611/2019) enhances protection for employees if their employment contract is terminated, validating the Government’s previous announcements. In alignment with Article 24 of the European Social Charter it provides for the existence of a valid lawful reason when terminating indefinite-term employment contracts.

Under the previous framework, following the ‘employment-at-will’ principle, employers could terminate employees without reason and without cause, in other words without being obliged to provide a legitimate business-related justification. However, based on these new statutory requirements, employers must specify and prove, in the event of litigation, a valid reason for the termination, reducing the scope of the managerial prerogative.

The new Law also touches upon ‘employee negligence’, limiting employees’ liability for damages caused in the course of carrying out their work to the damages caused intentionally.

Moreover, as of July 2019, employers must pay severance indemnities and corresponding taxes to the employees’ bank accounts via wire transfer instead of using a bank cheque.

The new Law also states that the prescription periods for filing employees claims for severance pay (three and six months from the dismissal date) may be suspended, when employees file a petition before the Labour Inspectorate for a labour dispute or conduct of a reconciliation procedure, until the procedure is finalised and corresponding decision issued.

In a nutshell, this new legal framework introduces a significant step towards enforcing employees’ rights and sets a clear path for interpretation in relevant employment disputes.

Dimitrios Kremalis
Deputy Managing Partner - Greece