- Overview: Greece
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Greece
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Greece Guide below will help you understand the nuances of labor legislation in the country.
There are two main reasons for companies hiring foreign workforce:
- Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
- Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.
After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.
If you need to hire foreign workforce in Greece so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.
With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.
We are experts in global workforce employment in Greece, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Greece.
See the guide below for a general overview of labor rules and regulations in Greece. Or contact us if you need to employ workers in Greece or would like to get more details.
Hiring and Firing Workforce in Greece Guide
# Employment Agreements
The employment contract in Greece is for an indefinite period of time. An employment contract is concluded by an offer from the employer and its acceptance from the employee.
The employment agreement must be in writing. In case it is concluded orally, it is still binding on the employer, who may be subject to sanctions for not observing the relevant legal requirements
Fixed-term employment contracts
These are freely agreed upon, subject to the condition that the meaning of ‘fixed term’ must not be abusively adopted by an employer who in reality intends to cover his or her permanent needs. A fixed-term contract ends when the contractual term expires or when the contractual work agreed upon is completed
Successive’ contracts or labor relations are the fixed-term contracts or labor relations between the same employer and the same employee, with the same or resembling terms of employment and an interval of no more than 45 calendar days.
# Employment Termination and Severance Pay (Dismissal)
Contracts for an indefinite term can be terminated at any time, unilaterally by employee, with or without prior notice
The procedure for terminating the employment contract depends on the type of employment contract, i.e., whether it is a contact for a fixed or an indefinite term and who (the employer or employee) terminates the contract. Contracts for an indefinite term can be terminated at any time, unilaterally by either party, with or without prior notice, but always with a severance payment if the employer is the party that initiates termination. Severance is always due; otherwise the termination is considered null and void. The only exception the law allows for non-payment of severance is if the employer has filed criminal charges against the employee. If the employee has been working in the company for fewer than two months, termination of the employment contract does not require any severance payment.
After the first 12 months the employee cannot be terminated without prior written notice from the employer, which will take effect from the day after the employee is notified.
These provisions apply for all forms of dismissals, including collective dismissals for employees that are not workers. Terminating workers doesn’t require any notice. A fixed-term contract can be terminated by the employee or the employer before the end date immediately without notice period for a ‘Significant reason’. Significant reason includes events during the employer employee relation which make it impossible to continue the agreement in good faith. If a significant reason exists, the employer is not obliged to pay compensation. Furthermore, a fixed-term employment contract, which includes a term for early termination in accordance with requires severance calculation is automatically converted into an indefinite-term employment contract upon termination.
The employer is required to have a valid, non-abusive reason for termination. However, the law provides for three cases in which the employer is not obliged to pay severance indemnity upon termination, even after the lapse of the statutory probation period.
The first case is if the employer has filed a criminal lawsuit against the employee before the termination of the employment contract. If the employee is eventually discharged by the criminal court, he or she is entitled to claim the severance indemnity (which must be paid immediately or within a reasonable period as of the notification to the employer of the relevant court’s decision), otherwise the termination will be declared invalid and the employer will be liable to pay “back salaries” to the employee. It should be noted that termination following the filing of a criminal lawsuit can also be held invalid if it is proven that the employer proceeded to the termination knowing that the allegations against the employee were false.
Secondly, the employer is released from an obligation to pay severance indemnity in case of permanent closure of the company due to an event of force majeure, against which the employer was not insured (if insured two-thirds of the severance indemnity becomes due). Force majeure constitutes an unpredictable event that could not be prevented by the employer even through the exercise of due skill and care, such as the destruction of premises attributable to earthquake, fire etc.
Finally, the employer is released from an obligation to pay severance indemnity in cases where the employee has intentionally caused his or her termination in order to receive the severance indemnity. However, this is extremely difficult to prove in practice and is therefore rare.
An alternative to the unilateral termination of employees is the execution of mutual separation agreements. From a legal perspective, this is the safest option as it protects the employer from the potential risk of invalidation of dismissal, as well as from other possible claims made by the employee to the maximum extent allowed by law. Such agreements will, in practice, involve the payment of an increased amount of severance indemnity in consideration of a waiver of the employees’ rights against the employer. The law does not set out any specific procedure for the conclusion of such agreements and does not require the coverage of the employee’s legal costs by the employer (as is the case in other jurisdictions). In practice, the option of a separation agreement is offered by the employer prior to unilateral action and after an agreement on its terms is reached between the parties it is signed either with immediate or future effect.
# It is prohibited to dismiss
In addition to the formal requirements for a contract termination to be valid, case law has formed a significant level of protection against dismissals despite the legislative choice of not setting substantial restrictions in contract termination, as for example when termination is a result of the employer’s dislike for the employee.
Dismissals are prohibited during an employee’s annual holiday. In addition, special protection is afforded to:
- Women during pregnancy and post-partum
- Trade union officials, for whom a specific procedure must be followed
- Employees conscripted for military service
- People with special needs that have been hired on a special regime
# Notice period
For the first 12 months, an (open-ended) employment contract can be terminated without notice or severance pay. Thereafter, the minimum notice periods are:
- One to two years of employment: one month
- Two to five years of employment: two months
- Five to ten years of employment: three months
- Over ten years of employment: four months.
If the employer terminates the employment without notice, he must pay the full indemnity. If the termination takes place with prior notice, then the employer is obliged to pay half the amount of the severance pay
# Severance payments
Severance payments are calculated on the normal remuneration of the last month of employment of the dismissed employee, increased by any and all allowances (holiday pay, etc.) to which the employee is entitled as part of his or her usual pay.
The severance pay scale for employees is as follows:
- One full year up to four years: two gross (monthly) salaries
- Four full years up to six years: three gross (monthly) salaries
- Six full years up to eight years: four gross (monthly) salaries
- Eight full years up to ten years: five gross (monthly) salaries
- Ten full years: six gross monthly) salaries
- 11 full years: seven gross (monthly) salaries
- 12 full years: eight gross (monthly) salaries
- 13 full years: nine gross (monthly) salaries
- 14 full years: ten gross (monthly) salaries
- 15 full years: 11 gross (monthly) salaries
- Over 16 full years: 12 gross (monthly) salaries.
# Employee Benefits and Contributions
The most important employee benefits prescribed by law are holiday bonus, unemployment benefit, child benefit, military service benefit, family benefits, sickness benefit, marriage benefit, maternity benefit, special provision for the protection of motherhood, service benefit (for employees having completed many years of service) and Christmas and Easter benefit.
# Probationary period
Greek law does not require employment-related training for management or other staff. However, a probation period can be agreed in the employment agreement. In the event of a probationary employment (i.e., when the employer wishes to test the employee’s capacities before definitely hiring the employee), there is a contract of employment as of the date the employee undertook employment. This probationary employment may either be a definite-term employment contract, when it is agreed that it shall be de jure terminated after the probationary period, or an indefinite-term employment contract, which therefore during the probationary period is subject to the termination clause. Iin the event of an indefinite-term employment contract, the probationary period may not exceed 12 months, during which time the contract may be terminated without due notice and without any compensation for dismissal, except if otherwise agreed between the parties. The employee shall receive wages during the probationary period as well.
The regular working day is eight hours. In general, the employer has to pay for overtime work.
# Work hours
The legal working time is 40 hours per week, except for specific categories of employees, such as bank employees, electricians, builders, under-age employees, etc., who are employed for fewer hours. The employer and employees can also agree that the employees will be employed for fewer working hours but remunerated for 40 hours
# Annual Leave
During the first and second year of employment, employees can take their holiday either according to the time they have worked by a proportion of two days per month, or cumulatively in December of the current year.
After three years of employment, employees are entitled to 22 days of holiday. And after 10 years of employment with the same employer, or after 12 years of employment irrespective of the employer, employees are allowed 25 days of holiday.
Unused vacation claims have to be paid at termination. According to Greek labour legislation, the employer is not allowed to carry over any leave entitlement to the following year; the employer is obliged to grant all the accrued vacation days to its employees until December 31. In case the employees have not been able to use all their vacation days before the end of the year, they should be paid the relevant salary instead of the untaken holiday.
However, in practice, many companies transfer a few days of annual leave (two-five days) into the next year under the condition that they will be used during the first two or three months of the year. The application of this practice, however, may create the risk of an administrative penalty from the Labour Authorities in case of an audit.
# Sick Leave
According to Greek labor legislation, in case of sickness, the employee is entitled to receive his or her daily wages from the employer as follows:
- If an employee has been employed by the company for at least one year, he or she is entitled to remuneration for a maximum of one month of absence due to sickness.
- If an employee has been employed for less than one year, he or she is entitled to remuneration for a maximum of one-half month of absence.
The total amount payable by the employer is reduced by the relevant amount paid by the National Social Security Fund; in other words, the employer will deduct from the total sickness payment, the amount that the employee receives from the National Social Security Fund (sickness benefit).
Employees are required to inform their employer in due course if they are incapable of working and also how long such incapability may presumably last. Employees must produce a written medical certificate not later than the third day of incapability attesting to the illness.
# Parental Leave
A mother is protected from contract termination for the duration of her pregnancy, for a time period of 18 months following labour, and for absences due to sickness resulting from pregnancy or labour. During this time period, the employment contract can only be terminated for a significant reason and with increased formal requirements
Maternity leave (pregnancy and post-partum) is 17 weeks (eight weeks before and nine weeks after birth). This does not apply to adoptions.
Mothers have the right to reduced working hours (by one hour per day for 2.5 years, or by two hours for one year and one hour for six months, or the equivalent). This right also applies to the father when the mother is self-employed or she does not exercise her right. However, the father is not entitled to exercise this right when the mother is not working.
Mothers may take special six-month leave during which OAED pays to the mother, on a monthly basis, an amount equal to the statutory minimum pay, plus a proportion for holiday bonuses and allowances based on that amount. This does not apply to the father or an adoptive mother.
The father is entitled to two days’ paid leave on the child’s birth.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Greece by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.