Termination of Employment Relationships in Greece

The termination of employment relationships in Greece is governed, in its basic civil-law framework, by Articles 669 et seq. of the Greek Civil Code (ZGB), supplemented by a series of special labor-law statutes that have been amended several times, particularly since 2010 – most recently and fundamentally by the labor law reform act, Law 4808/2021.

Employment contracts can be concluded either for a fixed term or for an indefinite term. Fixed-term employment contracts end automatically by operation of law upon expiry of the agreed period (Art. 669 ZGB). If, after the expiry of the term, the employee continues to offer his or her services with the employer’s knowledge and the employer raises no objection, the contract is deemed to have been tacitly extended for an indefinite period (Art. 671 ZGB). Indefinite-term employment contracts may be terminated by either party.

Under Art. 7 of Law 2112/1920, any unilateral deterioration of working conditions is deemed to constitute termination of the employment contract by the employer – for example, transferring the employee abroad against his or her will, transferring the employee to a lower position, or reducing wages.

Termination of Indefinite-Term Employment Relationships

Indefinite-term employment relationships can end, in particular, in the following cases:

• through termination by the employee (Art. 669 § 2, 670, 672 ZGB),
• through the death of the employee or, exceptionally, of the employer (Art. 675 ZGB),
• by mutual agreement of the parties,
• when the employee acquires the employer’s business.

If the employer is unable to accept the employee’s services due to force majeure, the obligation to pay remuneration lapses, but the employment relationship does not end automatically by operation of law; a termination remains necessary. In this case, the employee is entitled to two-thirds of the statutory severance pay (Art. 6 § 2 Law 2112/1920). In the event of the employer’s insolvency, however, the full statutory severance pay must be paid.

Termination of Fixed-Term Employment Relationships

• Fixed-term employment relationships end automatically by operation of law upon expiry of the agreed period (Art. 669 § 1 ZGB).
• Either party may terminate the employment relationship without notice for good cause at any time; a contractual exclusion of this right is invalid (Art. 672 ZGB). Whoever is at fault for the underlying breach of contract is liable in damages (Art. 673 ZGB). Good cause may include, for example, persistent failure to follow instructions, lack of professional aptitude, a long-term illness that significantly disrupts business operations, or an intentional insult.
• If the employer exceptionally terminates a fixed-term employment relationship without good cause, the employer remains obliged to pay all salaries through the agreed end of the contract.
• The death of the employee or, exceptionally, of the employer, as well as the acquisition of the business by the employee, also end the fixed-term employment relationship.

Severance Pay upon Ordinary Termination by the Employer

Under current law, a right to severance pay arises after a minimum period of employment of one year with the same employer. The termination must be made in writing; unlike in the past, when notification to the labor authority OAED sufficed, it is legally effective only if it is registered electronically within four working days of the date of termination in the digital labor information system ΕΡΓΑΝΗ II.

For the calculation of severance pay, a significantly lower cap has applied since the reform under Law 4093/2012 than previously: severance pay increases in stages according to length of service and is capped at a maximum of 12 months’ salary, reached at 16 years of service (previously, under the historical table of Law 2112/1920, severance pay could reach up to 24 months’ salary at 28 years of service). For employees who, as of 12 November 2012 – the date Law 4093/2012 took effect – already had more than 17 years of service with the same employer, a transitional rule applies with an additional severance component capped at €2,000 per additional month’s salary.

Since Law 4808/2021, there is no longer any distinction between salaried staff (ὑπάλληλοι) and manual/industrial workers (εργατοτεχνίτες); both groups are compensated according to the same severance scale. The basis of calculation is always the regular salary for the last month of full-time employment, increased by one-sixth to account for the proportional entitlement to holiday pay and Christmas/Easter bonus payments.

If notice is given while observing the statutory notice period, the employee is entitled to only half of the tabular severance pay; in the event of termination without notice, the full severance pay must be paid. If the employee is absent from work without excuse during the notice period, the employment relationship is deemed to have been ended by the employee, without any entitlement to severance pay arising; if, however, the employee is released from duty for the duration of the notice period, the entitlement to severance pay remains unaffected. If an employee simultaneously holds several employment relationships, a separate entitlement to severance pay arises for each employment relationship in the event of ordinary termination.

Since the exact intermediate values in the tables and the annually adjusted calculation ceilings can change, it is always advisable, for the calculation in an individual case, to consult the current official tables or to seek advice from a tax or employment law advisor.