Grounds for Termination
Under Greek law, the employment relationship can be terminated by mutual consent, by expiry of a fixed-term contract, or by notice given by one of the two parties.
The employer is not obliged by law to state the reasons for the termination on the termination letter. However, according to the Greek courts, the termination may be declared “abusive” or “unfair” (i.e. void) if the employer is not able to prove a reason that could objectively justify it. Law 4808/2021 introduced a list of prohibited reasons for termination, including: termination on discrimination grounds; vindictive termination following the exercise by the employee of lawful rights; and termination contrary to applicable legislation (such as collective dismissals, termination of pregnant employees or union officials, during the employee’s annual leave, in cases of harassment). If the termination is challenged based on one of the specific grounds explicitly prohibited by law, the burden of proof is reversed and the employer must provide substantial evidence that the termination took place for reasons other than those invoked by the employee.
The dismissal of employees who fall under protected categories (e.g. union officials, pregnant employees, disabled employees) is subject to specific restrictions, such as serious cause and/or prior approval of the authorities.
Collective Dismissals
Under Greek law collective redundancies means dismissals made for reasons that do not relate to the individual employees dismissed (e.g. dismissals due to workforce reduction or restructuring), and which exceed the following limits per calendar month:
- 6 redundancies, for employers with 20 to 150 employees;
- 5% of the company’s employees (and up to a maximum of 30 redundancies), for employers with more than 150 employees.
If the above thresholds are exceeded, the employer is obliged – in addition to the individual redundancy requirements – to follow a long and burdensome information and consultation process, which entails the running of (special) elections for employee representatives, the issuance of a social plan and the involvement of the authorities (collective redundancy process).
Given the length and complexities of the above process, most employers seek alternative options, such as the staggering of the redundancies over a number of months or the implementation of an amicable exit plan.
Individual Dismissals
Termination of indefinite-term contracts by the employer requires (a) service of a written termination letter and (b) payment of the minimum severance indemnity. The employer must have registered the employee with the state social security system for the termination to be valid. On the termination date, the employer must also pay the employee all accrued payroll amounts due, including salary up to the termination date, a pro-rated Christmas/Easter allowance, holiday allowance, and compensation for any untaken leave, as applicable.
Is Severance Pay Required?
Yes. Severance pay is mandatory for the termination of indefinite-term contracts (except during the first 12 months of employment). The minimum severance indemnity is calculated on the basis of the employee’s length of service and “regular emoluments” over the last month prior to termination. “Regular emoluments” include base salary and benefits granted regularly and over an extended period of time. If the employer provides lawful notice, the severance indemnity is reduced to half of the statutory minimum.
Separation Agreements
Is a Separation Agreement required or considered best practice?
The execution of a mutual separation agreement is not required under Greek law, but it is widely used in practice, as it is the only safe alternative to unilateral termination. From a legal perspective, mutual separation agreements protect employers against potential litigation risks to the maximum extent permitted by law. Additionally, this option ensures a smoother exit process and may address other matters such as confidentiality, handover procedures, and prohibition of disparaging statements. Such arrangements, of course, entail payment of severance to the employee in consideration for a waiver of potential claims. Such amount is subject to negotiation and company practice.
What are the standard provisions of a Separation Agreement?
Typical provisions of mutual separation agreements include inter alia, termination date, severance payment and/or any additional compensation, payroll clearance clauses, waiver or settlement of claims, confidentiality obligations, return of company property and non-disparagement clauses.
Does the age of the employee make a difference?
Greek law does not provide for specific rules applicable solely on the basis of the employee’s age in the context of separation agreements. However, age may become relevant indirectly, particularly where the termination is linked to retirement eligibility. In such cases, specific statutory provisions may apply, especially in relation to reduced severance entitlements for employees who are eligible for a full pension and whose employment is terminated by the employer. Additionally, any differentiation based on age must comply with anti-discrimination legislation, meaning that it must be objectively justified and proportionate.
Are there additional provisions to consider?
Employers often include in separation agreements clauses imposing, reaffirming or releasing employees from confidentiality obligations or post-termination restrictive covenants.
Remedies for Employee Seeking to Challenge Wrongful Termination
Employees may challenge dismissals before courts. If the employee challenges the dismissal based on a ground explicitly prohibited by law (e.g. discrimination; retaliation against an employee exercising lawful rights; and violation of statutory provisions prohibiting or restricting dismissals), they may claim invalidation of the dismissal, leading to reinstatement and payment of all back salaries with interest from the termination date until reinstatement or until a final court judgment is issued (which may take two to three years or more). Alternatively, rather than seeking reinstatement and back salaries, the employee may request the court to award additional compensation (similar to punitive damages) beyond any severance indemnity already paid. This compensation cannot be less than three months’ regular emoluments nor more than double the legal severance indemnity.
Beyond the grounds explicitly prohibited by law, an employee may also bring a lawsuit based on abusiveness (unfair or abusive dismissal) or alleged non-compliance with applicable termination requirements and procedures, whether stipulated by law, contract, or practice – for example, payment of insufficient severance indemnity, failure to provide the correct termination letter, or procedural violations. If the termination is found unlawful for a reason other than those explicitly prohibited by law, the court, upon request of either party, may award the employee additional compensation (up to twice the legal indemnity) in lieu of reinstatement and back pay.
Whistleblower Laws
Whistleblower protection in Greece is governed by Law 4990/2022, which implemented EU Directive 2019/1937. The law protects individuals who report violations of EU or national law in areas such as:
- public procurement
- financial services
- environmental protection
- corruption or fraud.
Employers with 50 or more employees must establish internal reporting channels and procedures ensuring confidentiality and protection against retaliation. Retaliatory measures such as dismissal, demotion, or disciplinary action against whistleblowers are prohibited and may result in administrative sanctions and civil liability.
