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Termination of employment contracts in Greece

Greek Employment Law

Termination of employment contracts in Greece

Termination of employment contracts in Greece is governed by Articles 669 et seq. Greek Civil Code.

Employment contracts can be concluded for both limited and unlimited periods. Fixed (limited) contracts of employment by rights end upon expiry of the period for which they were entered into (Art. 669 Greek Civil Code). Should the employee continue to offer his services after his period of service has expired, however, and the employer accepts these, this is regarded as a tacit extension of the employment contract. The employment contract in Greece is consequently regarded as being extended for an unspecified period. Either party can terminate a contract of employment for an unlimited term.

Pursuant to Article 7 of Law N. 2112/20, any unilateral amendment of the employment conditions to the employee’s detriment is deemed termination of the employment contract by the employer. This covers the cases of posting of the employee abroad despite it being against his wishes, for example, demotion to a lesser position and salary cuts.

Employment contracts for an unlimited term can be terminated as follows:

As a result of termination by the employee, Art. 669 §2 and 670, 672 Greek Civil Code,
As a result of the employee’s death or, in exceptional cases, the death of the employer, Art. 675 Greek Civil Code,
By the employer’s and the employee’s mutual consent in the cases of §1, Art. 8 of law 3198/1955, i.e. after completion of 15 years’ service, notwithstanding which the
In cases in which the employee acquires his employer’s business.

Under certain circumstances the employee’s inability to render service, which cannot be ascribed to illness, accident, military service or pregnancy, can be taken as tacit termination of the employment contract by the employee. In such cases termination is not automatically present, however, it must be verified and construed by the court as the case arises.

If the employer is not in a position to accept the employee’s services as a result of obstacles (e.g. due to force majeure), he is not obliged to pay the remuneration. This does not, however, by rights lead to termination of the employment contract. In this case too termination of the employment contract is required. The employee is, however, due two thirds of the statutory compensation (Article 6, §2 paragraph 2 of law N. 2112/20) in cases of force majeure.
In the event of insolvency the employer is obliged to pay the full statutory compensation (Article 6 §2 of law N. 2112/20 and Article 9 §2 of royal decree 16/18.7.20).

Employment contracts in Greece for a limited term can be terminated as follows:

Fixed employment contracts by rights cease when they expire (Article 669, §1 Greek Civil Code). Should the employee continue to provide his services after the period has expired, however, with the employer’s knowledge and the latter does not object, the employment contract is deemed to be extended for an unspecified term (Article 671 Greek Civil Code).
Either party can terminate the employment contract at any time for good cause without observing a period of notice. Contractual preclusion of this termination option is ineffective (Article 672 Greek Civil Code). Breach of contract can constitute good cause. In this case that party liable for the breach of contract is obliged to provide indemnification (Article 673 Greek Civil Code). In the event of a change in the personal circumstances or the assets of the employer, the court can award the employee appropriate compensation at its discretion (Article 674 Greek Civil Code). Other examples of good cause:

  • The employee’s opposition to and failure to carry out the employer’s instructions and the employee’s lack of professional suitability/qualifications,
  • The employee’s absence due to illness over years if this leads to problems in the business,
  • Violation of particular contractual provisions, if these provisions expressly stipulated that in the event of violation the other party would be due a right of termination, but without the obligation to pay compensation,
  • In the event of intentional insult by the employer.

In individual cases the employer can terminate the fixed employment contract without reason too. In such cases the employer is, however, obliged to pay the employee all wages up to expiry of the originally agreed employment contract.
The employee’s death or exceptionally that of the employer, leads to termination of the fixed employment contract (Art. 675 A.K.).
Cases in which the employee acquires the employer’s business lead to termination of the fixed employment contract too.

Compensation for loss of job (employee)

According to Greek law, in the case of due and proper termination of unlimited employment contracts by the employer, compensation is only to be paid from a minimum employment term of two months. Termination must be effected in writing and must be notified to the employment organisation (O.A.E.D. in Greek) having jurisdiction (Article 1, §1 of law 2112/20, as amended by Article 1 of law 4558/30). In this case the employee who has been dismissed will receive compensation for holiday which has not been taken.
The tiered compensation, based on the monthly salary, according to length of service, for ordinary termination by the employer (Article 1 of law 2112/20, amended by Article 1 of law 4558/30) can be seen from the following table:

 

Length of servicePeriod of notice or compensationLength of servicePeriod of notice or compensation
2 months to 1 year1 month or 1 month’s income17 years13 months or 13 months’ income
1 year to 4 years2 months or 2 months’ income18 years14 months or 14 months’ income
4 years to 6 years3 months or 3 months’ income19 years15 months or 15 months’ income
6 years to 8 years4 months or 4 months’ income20 years16 months or 16 months’ income
8 years to 10 years5 months or 5 months’ income21 years17 months or 17 months’ income
10 years6 months or 6 months’ income22 years18 months or 18 months’ income
11 years7 months or 7 months’23 years19 months or 19 months’
12 years8 months or 8 months’ income24 years20 months or 20 months’ income
13 years9 months or 9 months’ income25 years21 months or 21 months’ income
14 years10 months or 10 months’ income26 years22 months or 22 months’ income
15 years11 months or 11 months’ income27 years23 months or 23 months’ income
16 years12 months or 12 months’ income28 years and above24 months or 24 months’ income

 

In cases where an employer terminates an employment contract without observing a period of notice, the compensation is geared to the length of service. In the event of termination which complies with a period of notice, the employee whose post has been terminated is due half the respective compensation above.

NB.: For effective termination the employer must also offer the employee the respective compensation, mentioning the period of notice.
If the employee absents himself from work during the notice period, the employee shall be deemed to have terminated the employment contract. In this case he is not entitled to compensation. If, however, the employer releases the employee for the notice period, the compensation must be paid as normal. The period of notice is not offset against the length of service when calculating the compensation..
Employees who have several employment contracts in Greece at the same time are due a separate claim to compensation for each employment contract in the event of ordinary termination.