Employment Law in Greece

Employment Law in Greece: Key Provisions of the Law

One of the oldest and most important employment laws in Greece is the Labor Code (Law 2112/1920), which establishes the basic principles of employment contracts, termination of employment and severance pay. Over the decades, this foundational law has been supplemented and updated by various other laws, such as Law 3899/2010, which introduced critical reforms in response to Greece’s economic challenges, particularly in the areas of collective bargaining and wage determination.

Another cornerstone of Greek labor law is Law 1264/1982, which regulates trade unions and collective bargaining, ensuring that workers have the right to organize and bargain collectively. This law also outlines the legal framework for industrial action, including strikes, which are an integral part of labor relations in Greece. In addition, the National General Collective Agreement (EGSSE) plays a crucial role in setting minimum wage levels and basic working conditions across the country, providing a basic level of protection for all workers.

In recent years, Greece has undergone significant reforms to modernize its labor market, most notably through Law 4808/2021, which introduced new measures to improve work-life balance, regulate remote work, and protect workers in a digital economy.

Below are some of the key provisions of these laws.

Working Hours

In Greece, the standard working week is set at 40 hours, usually spread over five days, although certain sectors and job roles may allow flexibility in the distribution of these hours.

The law allows for different work schedules depending on the nature of the work, including shift work, part-time work and flexible hours, provided they are agreed upon by both the employer and the employee.

Any deviation from standard working hours must comply with specific regulations to ensure that workers are not overworked and receive adequate rest.

These regulations are designed to protect workers from exploitation while allowing employers the flexibility to manage their workforce effectively.

Minimum Hourly Wage

The minimum hourly wage in Greece is set by law and is periodically adjusted by the government, taking into account economic conditions, inflation and the cost of living.

This wage acts as a legal floor for compensation, ensuring that all workers receive a fair and livable income for their work.

Employers are required to pay at least the minimum wage, and any agreement to pay less is considered invalid.

The minimum wage is critical to maintaining a basic standard of living for workers and reducing poverty, particularly in traditionally low-wage sectors.

Overtime

Overtime in Greece is regulated to protect workers from excessive working hours and to ensure fair compensation for additional work.

Employees who work beyond the standard 40-hour workweek are entitled to overtime pay, which is calculated at a higher rate than the regular hourly wage.

The law requires that the first five hours of overtime be compensated at an additional 20%, while any overtime beyond that threshold requires a 40% increase in pay.

Employers must also obtain prior approval from the labor authorities for certain overtime arrangements to prevent abuse and overwork.

Holidays

Under Greek law, all employees are entitled to paid annual leave, which is an important component of workers’ rights.

The minimum vacation entitlement increases with length of service, starting at 20 days per year for employees with less than one year of service and increasing to 24 days after five years of service.

Employees are encouraged to take their leave within the calendar year in which it accrues to ensure that they have adequate time for rest and recuperation.

Employers are required to pay employees their full salary during leave, reinforcing the importance of work-life balance in Greek labor law.

Maternity and paternity leave

Greece provides robust maternity and paternity leave protections for employees, ensuring that parents can care for their newborns without fear of losing their jobs. Female employees are entitled to 17 weeks of maternity leave, which can be extended under certain conditions.

During this period, they receive financial support either from the social security system or from their employer.

Paternity leave has also been strengthened, with new fathers entitled to paid leave after the birth of their child.

Both parents can benefit from parental leave, allowing them to share responsibilities and bond with their child, with job protection guaranteed throughout the leave period.

Illness

Greek labour law provides for paid sick leave, ensuring that employees can take time off work to recover from illness without loss of income.

The length of sick leave and the amount of compensation depend on the employee’s length of service and the severity of the illness.

Generally, employees receive full pay for a period of time, after which social security benefits may cover a portion of their salary.

Employers are also required to maintain the employee’s position during his or her absence, and dismissal due to illness is strictly regulated.

Taxation

Employees in Greece are subject to income tax on their earnings, with progressive tax rates based on income brackets.

Employers are responsible for withholding the appropriate amount of tax from their employees’ wages and paying it to the tax authorities.

In addition, both employers and employees contribute to social security, which covers pensions, health care, and other benefits.

These taxes are critical to funding public services and the social safety net, ensuring that workers have access to necessary protections and services.

Pensions

The Greek pension system is primarily funded by mandatory contributions from both employers and employees.

The amount of the pension depends on the length of service and the contributions made during the employee’s working life.

Recent reforms have aimed to ensure the sustainability of the pension system by introducing measures such as raising the retirement age and adjusting benefits.

Pensions are an important part of the social security system, providing financial security for workers in their retirement years after a lifetime of contributions.

Dismissal

Dismissal in Greece is highly regulated to protect workers from unfair dismissal. Employers must provide valid reasons for dismissing an employee and must comply with statutory notice periods, which vary according to length of service.

In cases of unfair dismissal, employees have the right to challenge the decision in court, where they may be reinstated or awarded compensation.

In addition, employees are entitled to severance pay if they are dismissed after a certain period of service, the amount of which is calculated on the basis of their salary and length of service.

These policies are designed to ensure that terminations are fair and that employees are treated with dignity and respect.