• Insights

Greece – Greek court takes a step towards ensuring dismissals are for a valid reason

Written by
KREMALIS LAW FIRM, offering full service for employment matters in Greece.
A Greek court has just recently decided a case by applying a principle set out under Article 24 of the European Social Charter, which was ratified by Greece in 2016. The principle is that workers should not to have their employment terminated without a valid reason. This moves away from the old system of ‘non-causative’ dismissal. Click to read more about this historic development.

The Piraeus’ Single-member Court of First Instance has just made a historically significant decision (no. 3220/2017). It is the first time since ratification of the Revised European Social Charter by Greece on 20 January 2016 that a Greek court has applied Article 24 of the Social Charter directly and horizontally. Article 24 prohibits the arbitrary and unfair dismissal of an employee and therefore, following the ratification, the courts are now obliged to consider whether a dismissal was based on a valid reason or not and to declare any dismissals not so based, void.

Under Greek law, the termination of an employment contract is expressed to be a unilateral, ‘non-causative’ legal act, except as otherwise stipulated by law (e.g. the dismissal of employee representatives, recent mothers, or dismissal for reasons of pregnancy or on discriminatory grounds). However, it is this ‘non-causative’ starting point that has now been judged contrary to EU law.

The way dismissals are classified as either fair or unfair (abusive) in Greece is based on case law. Generally, dismissals for failure to meet business needs are considered fair. However, a dismissal may be treated as unfair – and therefore void – in certain quite limited circumstances under Article 281 of the Civil Code. This prevents the exercise of a right where it manifestly exceeds the bounds of good faith, morality or the social or economic purpose of that right applies and applies in cases, for example, of contract termination by the employer on grounds of hatred, enmity or revenge. According to case law, a dismissal which is not justified by the legitimate interests of the employer (meaning either reasons attributable to the dismissed employee such as incompetence, or for economic reasons) is void.

The revised European Social Charter was ratified by Act 4359/2016 and according to Article 28 paragraph 1 of the Greek Constitution, it prevails over any statute. Article 24 of the Revised European Social Charter says as follows:

“With a view to ensuring the effective exercise of the right of workers to protection in cases of termination of employment, the Parties undertake to recognize:a) the right of all workers not to have their employment terminated without valid reasons for such termination connected with their capacity or conduct or based on the operational requirements of the undertaking, establishment or service;b) the right of workers whose employment is terminated without a valid reason to adequate compensation or other appropriate relief.To this end the Parties undertake to ensure that a worker who considers that his employment has been terminated without a valid reason shall have the right to appeal to an impartial body.”

This makes it clear that the system of ‘non-causal’ dismissal is not compatible with the dismissal for a valid reason. Consequently, the principle of justified dismissal has directly been introduced into Greek law and the courts are obliged to examine whether dismissals are based on valid reasons in order to comply. For the first time, therefore, Article 24 introduces a new fundamental right into a European human rights legal instrument, protecting employees from being dismissed without a valid reason on the initiative of the employer.

And this case has been the first step in applying it. It is now up to Supreme Court (Areios Pagos) to validate the court decision and alter its jurisprudence.