Terminating employment in Greece requires careful adherence to specific legal procedures and entitlements. Both employers and employees are subject to regulations designed to ensure fairness and provide a framework for the conclusion of the employment relationship. Understanding these rules is crucial for businesses operating in Greece to avoid legal challenges and ensure compliance.
The process typically involves providing appropriate notice or payment in lieu of notice, calculating and paying statutory severance pay, and fulfilling various administrative obligations. The specific requirements often depend on factors such as the employee's length of service, their salary, and whether the termination is initiated by the employer or the employee.
Notice Period Requirements
When an employer terminates an indefinite-term employment contract in Greece without cause, a statutory notice period is generally required for employees who have completed at least twelve months of service. For employees with less than twelve months of service, no notice period is legally mandated, but severance pay is still due. The length of the notice period increases with the employee's tenure.
During the notice period, the employee is typically expected to continue working under the terms of their contract. The employer may, however, choose to pay the employee their salary for the duration of the notice period in lieu of requiring them to work.
| Length of Service | Minimum Notice Period |
|---|---|
| 1 year to < 2 years | 1 month |
| 2 years to < 5 years | 2 months |
| 5 years to < 10 years | 3 months |
| 10 years and above | 4 months |
These are the minimum statutory notice periods for employees paid monthly (white-collar workers). Different rules may apply to employees paid daily or hourly (blue-collar workers), although modern practice often aligns treatment.
Severance Pay Calculations
Severance pay is a mandatory entitlement for employees whose indefinite-term contracts are terminated by the employer without cause. The amount of severance pay is calculated based on the employee's length of service with the company and their regular monthly salary. The calculation uses a specific formula where the number of monthly salaries owed as severance increases with tenure.
For employees who receive notice, the statutory severance pay is reduced by half. For employees terminated without notice (payment in lieu of notice), the full statutory severance amount is payable.
The calculation is generally based on the employee's average regular monthly earnings over the last period of employment, including basic salary and regular allowances. There is a statutory cap on the maximum amount of severance pay, which is currently set at 24 months' salary.
| Length of Service | Severance Pay (without notice) | Severance Pay (with notice) |
|---|---|---|
| < 1 year | 0.5 months' salary | N/A (no notice required) |
| 1 year to < 2 years | 2 months' salary | 1 month's salary |
| 2 years to < 5 years | 3 months' salary | 1.5 months' salary |
| 5 years to < 10 years | 4 months' salary | 2 months' salary |
| 10 years to < 15 years | 5 months' salary | 2.5 months' salary |
| 15 years to < 20 years | 6 months' salary | 3 months' salary |
| 20 years to < 25 years | 7 months' salary | 3.5 months' salary |
| 25 years and above | 8 months' salary | 4 months' salary |
Note: For employees with over 17 years of service, the severance calculation becomes more complex, potentially increasing by one month's salary for each additional year of service beyond 17 years, up to the 24-month cap.
Grounds for Termination
Employment contracts in Greece can be terminated under various circumstances.
Termination Without Cause: This is the most common form of employer-initiated termination. It does not require a specific reason related to the employee's conduct or performance, but it does require the employer to follow the correct procedure, provide notice (or pay in lieu), and pay statutory severance. Common situations include redundancy due to economic reasons, restructuring, or changes in operational needs. While no specific "cause" is needed, the termination must not be deemed "abusive" (see Employee Protections).
Termination With Cause: An employer can terminate an employment contract immediately without notice or severance pay in cases of severe misconduct by the employee. Greek law provides specific examples of serious cause, such as:
- Serious breach of contractual obligations.
- Criminal offenses related to the job.
- Repeated insubordination.
- Serious damage caused intentionally or through gross negligence.
- Violation of company rules that are essential for operations.
Establishing "cause" requires strong evidence and careful adherence to disciplinary procedures, if applicable. If a court later finds that the alleged cause was not sufficiently serious, the termination may be deemed invalid or treated as a termination without cause, requiring the employer to pay full severance and potentially back pay.
Procedural Requirements for Lawful Termination
To effect a lawful termination of an indefinite-term contract in Greece, employers must follow specific procedural steps:
- Written Notice: The termination must be communicated to the employee in writing. This written notice should clearly state the employer's intention to terminate the contract and the effective date.
- Payment of Severance: The statutory severance pay must be calculated correctly and paid to the employee simultaneously with the delivery of the written termination notice or within a very short timeframe thereafter. Failure to pay severance correctly renders the termination invalid.
- Registration with Authorities: The termination must be registered electronically with the relevant labor authorities (specifically, the ERGANI system) within a strict deadline (usually four working days from the date of termination). This registration is mandatory and serves as official notification to the state.
- Final Settlement: The employer must provide the employee with a final settlement statement detailing all payments made, including outstanding wages, pro-rata holiday pay, pro-rata Christmas and Easter bonuses, and the severance amount.
- Return of Company Property: Arrange for the return of company property (laptops, phones, access cards, etc.).
- Issuance of Certificates: Provide the employee with necessary certificates, such as a certificate of employment.
Failure to comply with any of these procedural steps can result in the termination being deemed invalid or "abusive," leading to significant legal consequences for the employer.
Employee Protections Against Wrongful Dismissal
Greek labor law provides significant protections to employees against unfair or "abusive" dismissal. Even if the correct notice and severance are paid, a termination can be challenged if it is deemed abusive.
A dismissal may be considered abusive if:
- It is based on discriminatory grounds (e.g., gender, age, religion, disability, union membership, pregnancy).
- It is a retaliation for the employee exercising their legal rights (e.g., reporting misconduct, taking legal action against the employer).
- It is exercised in a manner that violates the principle of good faith or morality (e.g., termination immediately before a significant bonus is due, termination intended solely to harm the employee).
- It is not related to the needs of the business or the employee's performance/conduct, and lacks a legitimate reason.
Certain categories of employees also benefit from enhanced protection, such as pregnant employees, employees on maternity/paternity leave, union officials, and employees on specific types of leave (e.g., military service). Terminating these employees requires stricter conditions or may be prohibited during specific periods.
If a court finds a dismissal to be abusive or procedurally invalid, it may order the employer to pay significant compensation to the employee, potentially equivalent to many months of salary, in addition to the statutory severance pay. In some cases, though rare, reinstatement might be ordered, particularly for protected categories. Therefore, employers must ensure not only procedural compliance but also that the underlying reasons and manner of termination are lawful and non-abusive.
