Establishing compliant employment relationships in Greece requires a thorough understanding of local labor law, which governs the structure and content of employment agreements. These agreements serve as the foundational document outlining the rights and obligations of both the employer and the employee, ensuring clarity and legal standing for the working relationship. Navigating the specific requirements for contract types, mandatory clauses, and termination procedures is crucial for companies hiring in Greece, whether they are establishing a local entity or utilizing an Employer of Record service.
Greek labor legislation provides a framework for various types of employment relationships, each with distinct characteristics and implications. Adhering to these regulations is essential for legal compliance and fostering stable employment conditions.
Types of Employment Agreements
Employment agreements in Greece are primarily categorized based on their duration. The two main types are indefinite-term and fixed-term contracts.
- Indefinite-Term Contracts: These are the standard form of employment agreement in Greece. They do not have a predetermined end date and continue until terminated by either party according to legal procedures (resignation or dismissal). This type of contract offers greater job security to the employee.
- Fixed-Term Contracts: These contracts are for a specific duration or until the completion of a particular project. They automatically terminate upon reaching the agreed-upon date or project completion. Greek law places restrictions on the successive renewal of fixed-term contracts to prevent them from being used to circumvent the protections afforded by indefinite-term contracts. Successive fixed-term contracts can be deemed indefinite if there is no objective reason justifying their fixed term or if they exceed certain duration limits (typically 3 years, including renewals).
| Contract Type | Duration | Termination | Standard Form? |
|---|---|---|---|
| Indefinite-Term | No predetermined end date | Resignation or dismissal (with notice/cause) | Yes |
| Fixed-Term | Specific period/project | Automatic upon expiry/completion | No |
Essential Clauses
Greek employment agreements, regardless of type, must include certain mandatory terms to be legally compliant. While a written contract is highly recommended and often required for specific terms (like fixed-term duration or part-time work), the employment relationship itself is established by the commencement of work under the employer's direction, even without a formal written document. However, employers are legally obliged to inform employees in writing of the key terms of their employment within a specific timeframe after hiring.
Mandatory information to be provided includes:
- Identity of the parties (employer and employee)
- Place of work
- Registered seat of the company
- Job title, rank, nature of work, or a brief description of the employee's duties
- Date of commencement of the employment agreement
- For fixed-term contracts, the expected duration
- Duration of paid leave entitlement
- Duration of notice periods for termination by either party
- Remuneration, including basic salary, any other payments, and the payment frequency
- Duration of the employee's normal daily or weekly working time
- Reference to the collective labor agreement (if applicable) governing the terms and conditions of employment
Probationary Period
Greek law permits the inclusion of a probationary period at the beginning of an indefinite-term employment contract. This period allows both the employer and the employee to assess the suitability of the employment relationship.
- Duration: The maximum duration for a probationary period is typically six months. During this period, the employment contract can generally be terminated by either party with shorter notice or sometimes without notice, depending on the specific terms agreed upon and the duration of the probation.
- Termination during Probation: Termination during the probationary period is generally easier than after its expiry, but it must still be exercised in good faith and not be abusive.
- Automatic Confirmation: If the employment continues beyond the agreed probationary period without termination, the employee is automatically considered to be permanently employed under an indefinite-term contract, and the standard rules for termination apply.
Confidentiality and Non-Compete Clauses
Confidentiality and non-compete clauses are common in employment agreements, particularly for roles involving sensitive information or specialized knowledge.
- Confidentiality Clauses: These clauses are generally enforceable in Greece, protecting the employer's legitimate business interests by preventing the employee from disclosing confidential information acquired during employment, both during and after the employment relationship ends. The scope and duration must be reasonable.
- Non-Compete Clauses: Non-compete clauses restrict an employee's ability to work for a competitor or start a competing business after leaving the company. Their enforceability in Greece is subject to strict conditions. For a non-compete clause to be valid and enforceable, it must:
- Be in writing.
- Protect a legitimate business interest of the employer (e.g., trade secrets, client relationships).
- Be reasonable in scope, duration, and geographical area. Excessive restrictions are likely to be deemed invalid.
- Often, compensation must be provided to the employee for the duration of the restriction after termination.
The courts will scrutinize non-compete clauses to ensure they do not unduly restrict the employee's ability to earn a living.
Contract Modification and Termination Requirements
Modifying an existing employment agreement requires the mutual written consent of both the employer and the employee. Unilateral changes to essential terms by the employer are generally not permitted unless explicitly allowed by law or a collective agreement, or if they constitute a permissible exercise of the employer's managerial prerogative within reasonable limits. Significant unilateral changes by the employer may be considered a detrimental change in working conditions, potentially allowing the employee to treat it as constructive dismissal.
Termination of an indefinite-term employment contract can occur through resignation by the employee or dismissal by the employer.
- Resignation: An employee can resign by providing written notice to the employer. The required notice period depends on the employee's length of service.
- Dismissal: An employer can dismiss an employee with or without cause.
- Dismissal with Notice: For dismissal without cause, the employer must provide written notice to the employee. The length of the notice period is determined by the employee's length of service. Upon termination with notice, the employee is also entitled to severance pay, calculated based on their length of service and salary.
- Dismissal without Notice (Summary Dismissal): Dismissal without notice is only permissible for a "serious cause" related to the employee's conduct or performance, making the continuation of the employment relationship until the end of the notice period impossible. In cases of summary dismissal for cause, the employer is generally not required to pay severance pay.
Specific rules apply to collective dismissals and the termination of fixed-term contracts (which typically end automatically but can be terminated early for serious cause). Strict adherence to notice periods, severance pay calculations, and procedural requirements is mandatory for lawful termination by the employer. Failure to comply can result in the dismissal being deemed null and void, leading to reinstatement or higher compensation awards.
