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Factsheet for measure GR-2020-12/667 Updated – measures in Greece

Suspension of employment contracts

Αναστολή σύμβασης εργασίας , Πράξη Νομοθετικού Περιεχομένου (ΠΝΠ) στις 20 Μαρτίου 2020, αρθρο 11, παρ. 2Α,, Αρ. Φύλλου 68 & ΥΑ 13031/Δ1.4551, 12997/231/2020 & 12998/232/23.03.2020

Country Greece , applies nationwide
Time period Open ended, started on 20 March 2020
Context COVID-19
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery
– Flexibilisation and security
Author Penny Georgiadou (INE GSEE)
Measure added 16 April 2020 (updated 07 February 2022)
Related ERM support instrument

Background information

By virtue of the Legislative Act 20 March 2020 "Urgent measures to address the consequences of the spread of COVID-19, to support the society and entrepreneurship, and to safeguard the smooth operation of the market and public administration" and the Ministerial Decisions 13031/Δ1.4551, 12997/231/2020 & 12998/232/23-3-2020, businesses that have been financially affected as per their Activity Code Numbers (ACN), or their operation has been suspended under a state decision, are able to suspend contracts of employment of part or all of the staff for a continuous period of 45 days, while prohibiting employees’ dismissal.

Then, on 7 April 2020, the Ministry of Labour issued the circular 14676/253/2020, revoking the authorization formerly issued to businesses-employers entailing the power suspend their employees for emergency reasons. (i.e. reasons of public interest). The measure can be applied in case of closure consequent to a State decision or to other companies listed by sector and only to cover extraordinary, urgent, non-deferred needs for reasons of public interest, or to cover extraordinary and non-deferred business needs in general. For the suspension period, the employee's remuneration was at the employers' expense.

Content of measure

Businesses that have been financially affected as per their Activity Code Numbers (ACN), or their operation has been suspended under a state decision, can suspend contracts of employment of part or all of the staff for a continuous period of 45 days, while prohibiting employees’ dismissal. The list of ACNs is dynamic and more ACNs may be included. Should a dismissal take place - regardless of whether that dismissal concerns an employee whose employment has been suspended - it will be considered null and void. The suspension of the employment contracts may be applied for up to one (1) month from 20 March 2020, with the possibility of extension following a joint decision of the Ministers of Finance and Labour and Social Affairs, taking into account the development of the crisis.

Since 7 April 2020, businesses-employers can terminate their employees' contract suspension due to emergencies (i.e., reasons of public interest). Such revocation is applied either in case of closure by an order of a state decision or to affected businesses based on their ACN and only to cover extraordinary, urgent, non-deferred needs for reasons of public interest, or to cover extraordinary and non-deferred business needs in general. The employer shall declare to the ERGANI platform the work provided and the suspension period of 45 days is extended respectively to the days of work provided. The measure will be applied for as long the suspension period lasts.

Updates

The following updates to this measure have been made after it came into effect.

30 December 2021

The measure of suspension of employment contracts with special purpose compensation (Є534) for January 2022 is activated for employees who have been hired up until 30 December 2021 by companies with specific business codes (bars, restaurants with music, entertainment centres, etc.). The suspensions of employment contracts will be announced in advance at the Information System ERGANI from 1 January 2022 to 10 January 2022. Redundancies are prohibited for companies that will use the measure and for as long as it lasts.

24 September 2021

The measure is still in place.

08 September 2021

According to press report (protothema.gr, Imerisia.gr), on 8 September 2021 approximately €2.8 million were paid for the special purpose compensations (up to €534) for 6,551 employees who had been placed on suspension of their employment contract during the months of May, June, July and August 2021.

More specifically, the payments concern:

  • Suspensions of employment contracts of employees for the month of August 2021 with the payment of the special purpose compensation to amount €2,110,836 for a total number of 4,144 beneficiaries.
  • Suspensions of employment contracts of employees for the months of May, June and July 2021 as arrear payments amounting €756,372 for a total number of 2,407 beneficiaries.
24 July 2021

According to press report on 24 July 2021 (Ιmerisia.gr), the report-recommendation of the Bank of Greece regarding the increase of the minimum wage, states that approximately 850,000 workers were forced to live with the public compensation of €534 per month during the lockdown period.

According to the same report, the sectors with the highest number of suspended job contracts are those in catering, retail, accommodation, wholesale and education, where most of the restrictive measures were applied to both lockdowns. The suspended job contracts during the two lockdowns (March-May 2020 and November-December 2020) ranged between 650,000 and 850,000 jobs. In general, the number of the suspended job contracts during the first and second lockdown is at the same level, despite the fact that the second lockdown was less severe.

07 January 2021

From March 2020, as the crisis unfolded, additional amendments have been introduced:

  • Revocation of suspension of employment contracts for emergency, non-deferred operational needs, by virtue of Circular no. 14676/253/07.04.2020 and Ministerial Decision 17239/Δ1.5936, 04.05.2020.
  • Ability to revoke the suspension of the employment contracts for at least 40% of the employees by virtue of art. 11 - LA 01.05.2020& οικ.17788/346/08.05.2020, οικ. 19221/379/19.05.2020).
  • Extension of suspension of employee contracts for up to 60% of the contracts already suspended, by virtue of art. 10- LA 01.05.2020& οικ.17788/346/8.5.2020 and art. 11- LA 01.05.2020& οικ.17788/346/8.5.2020, οικ. 19221/379/19.05.2020.
  • Extension of suspension of employee contracts for May 2020 (with ability of further extension) concerning businesses whose operation has been suspended under a State decision by virtue of art. 10 - LA 01.05.2020& οικ.17788/346/08.05.2020, οικ. 19221/379/19.05.2020).
  • Ability for the businesses to suspend the employment contracts of special categories of employees and eligibility for the latter to receive the exceptional state benefit of €800, by virtue of Ministerial Decision οικ.17321/327/04.05.2020.
  • Suspension of employment contracts to specific categories by virtue of Law 4690/30.05.2020, οικ. 23102/477/12.06.2020, οικ. 33294/817/19.08.2020, οικ. 34236/860/07.09.2020, and 01.09.2020, Announcement of the Ministry of the Labour Affairs, art. 19 - L. 4722/15.09.2020
  • Employees belonging to vulnerable groups may work remotely upon their request, (Art. 2 - LA 11.3.2020, art. 8 - LA 22.08.2020, art. 21 - L. 4722/2020, Min. Decision 37095/1436/17.09.2020 & 39363/1537/30.09.2020)
  • Exceptional measures to support employees in Regional Units included in the epidemiological level "very high" (art. 284, Law 4738/2020/27.10.2020)
  • Exceptional measures to support employees in Regional Units included in the epidemiological level "high", "moderate", "low" (art.285, Law 4738/2020/27.10.2020
  • Employers' unilateral decision in order for employees to work remotely, (Art. 4 par.2, LA - 11.03.2020, Art. 235 - L.4727/2020, Min. Decision 40000/1269/02.10.2020 Ministerial Decision 20788/610 & οικ. 26308/768/30.06.2020 & 30742/1002/28.7.2020 & 36124/1194/2020, Min. Dec.οικ. 48690/1476/25.11.2020)
  • Suspension of employment contracts and granting of a special state benefit of €800 (Min.Dec. 48713/1232/27.11.2020
  • Suspension of employment contracts and granting of a special state benefit of €534 (Min. Dec. 49989/1266/04.12.2020)
  • Employers' unilateral decision in order for employees to work remotely, (Art. 4 par.2, LA - 11.03.2020, Art. 235 - L.4727/2020, Min. Decision 40000/1269/02.10.2020 Ministerial Decision 20788/610 & οικ. 26308/768/30.06.2020 & 30742/1002/28.07.2020 & 36124/1194/2020, Min. Dec.οικ. 48690/1476/25.11.2020, 52241/1567/17.12.2020) with duration till 31 January 2021.

SURE funds will cover the government’s COVID-19 support measures announced to safeguard employment in Greece, which include the special purpose compensation scheme for private sector employees whose contracts were suspended because of the pandemic; the cost of these employees’ social security contributions during the contract suspension; the subsidizing of employers’ social security contributions to seasonal employees; and the Syn-Ergasia support tool for businesses and their employees.

01 January 2021

With the Ministerial Decisions No 3208/108/2021 (25 January 2021) and No 4374/131/2021 (31 January 2021) the measure of suspension of job contracts was renewed for the months of January and February 2021. It concerns businesses that are either closed by state mandate or are currently operate but were severely affected by the pandemic according to their Activity Code Numbers (CAN) as issued by the Ministry of Finance. Where companies remain closed after Government’s mandate, all the job contracts of their employees must be declared suspended.

In the case that businesses operate but have been affected by the pandemic, the employers can choose which of the employees will be entered to the job contract suspension. Once all suspensions are revoked, all employees of the company will return to work. If they revoke part of their employee suspensions, they will keep the remaining part suspended employment contract.

For March 2021, the measure of suspension of employment contracts was renewed by the Ministerial Decision No 9500/322/2021. The companies which will remain closed with government’s decision will continue the suspension of job contracts. Also, the affected by the pandemic operating companies can declare until March 8th, job contracts suspensions of their employees and an inspection will take place by the authorities in order to verify their eligibility to use the measure.

Use of measure

According to a study issued by the National Institute of Labour and Human Resources -NILHR – (Thematic Bulletin No. 4 - March 2021), the total government’s financial expenditure for the payment of the special-purpose allowance for those employees of which the job contract has been suspended, it is estimated to €2.719 billion, for the period between March 2020 and February 2021 (12 months). The amount of the special-purpose allowance is on average €476 per month and corresponds to 87% of the net national minimum wage, 71% of the net national median wage and 65% of the net national average wage. The monthly wage losses of workers with a suspended employment contract (and for as long as they have been suspended from an employment contract) are estimated to be around 30% to 35%.

There are no official, aggregate data on how many businesses, so far, have applied to receive the financial support by the state of €534 for 30 days, due to suspension of employment contracts, despite the fact that enterprises register for application in the ERGANI system (Ministry of Labour). Similarly, no available, aggregate data on how many applied for the exceptional state benefit of €800, from the beginning of pandemic crisis till now. There some scattered announcements from different stakeholders such as:

  • According to the Hellenic Statistical Authority (April 2020), 205,984 enterprises (14,6% out of total) were under suspension of operation, on the basis of state order, due to (COVID-19).
  • 1,063,098 workers have had their contracts suspended, that is about 25% percent of the entire labour force of Greece. All these, were entitled to the financial support.

The exact number of the financially affected, as per their Activity Code Numbers (ACN), enterprises applied to ERGANI for making use of the measure “suspension of employment contract”, has not been made public, at least so far. As of 21 August 2020 (Ministry of Labour announcement), the total amount paid for the support of employees, freelancers and the self-employed, as well as businesses affected by the pandemic amount to €1,569,589.168. A final announcement (25 August 2020) by the Ministry of Labour stated that the beneficiaries of the financial support, by the state, of €534 for 30 days, due to suspension of employment contracts, amounted to 810,028 employees for the period March-April; 542,244 employees for May; 275,598 employees in tourism for unilateral declarations; 182,839 scientists-freelancers.

Target groups

Workers Businesses Citizens
Does not apply to workers Companies providing essential services
Does not apply to citizens

Actors and funding

Actors Funding
National government
Company / Companies
European Funds
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Unknown

Involvement

A tripartite meeting of all national social partners with the Ministry of Labour took place at the beginning of the virus outbreak (10 March 2020). During the meeting, the government briefed the social partners on the situation in whole and on the suggested measures and policies, and all parties were engaged in dialogue. The proposals and opinions of the social partners were taken into consideration, without being binding.

Views and reactions

For the Greek General Confederation of Labour (GSEE): Given the urgent nature of the need to address the pandemic in early 2020, the role of social partners was limited to informative meetings by the Government. GSEE strongly believes that tripartism and tripartite social dialogue, which do not function in Greece on a steady institutional basis, can play a key role with strong effect in practice, so as for the measures are in conformity with the primary obligation of the State to respect even in times of (every sort of) crisis human rights’ guarantees such as the principle of equality and the respect of the value of human beings, the right to health, the right to work, the right to social security, freedom of association, the principle of proportionality, the principle of social solidarity as well as the principle of protected public trust towards State Institutions.

For the Hellenic Federation of Enterprises (SEV): In early March 2020, even before the planning of the government measures, the Hellenic Federation of Enterprises (SEV) invited its members to adhere strictly to hygiene rules in all work environments and encouraged business to voluntarily adopt preventive measures aimed at the mitigation of the spread of the virus in the workplace and the protection of the employees’ health. Subsequently, the government invited the institutional social partners and informed them about the planned pandemic response measures, at the same time requesting their support as the main institutional bodies of the labour market. The social partners expressed their support to the planned governmental measures, solemnly assuming their share of institutional social responsibility and invited their members to support the governmental pandemic response policies.

Sources

  • 20 March 2020: Act of Legislative Content on “Urgent measures to address the consequences of the spread of the coronavirus COVID-19, to support society and entrepreneurship and to ensure the smooth functioning of the market and public administration.” (O.G A’ 68/20-3-2020) (www.e-nomothesia.gr)
  • 23 March 2020: Circular 14676 /253/2020 "Clarifications on 23-3-2020 JMC (B΄1078) for measures to support employees and companies-employers of the private sector, to deal with the effects of the COVID-19 and other measures (www.taxheaven.gr)
  • 07 April 2020: Corrections to companies' statements and payment dates for 800 euros. (www.e-nomothesia.gr)
  • 22 April 2020: Minister of Labour, Mr Giannis Vroutsis, Announcement (www.ypakp.gr)
  • 30 October 2020: Draft budgetary plan 2021 (ec.europa.eu)
  • 26 November 2020: New government measures against COVID-19 (www.ecovis.com)
  • 01 January 2021: COVID-19 official announcements and news (esngreece.gr)
  • 31 May 2021: Ministry of Labour: The "roadmap" for suspensions of employment contracts in June (Ipourgio Ergasias: O odikos hartis gia tis anastoles simvaseon ergasias ton Iounio) (ypergasias.gov.gr)
  • 30 June 2021: Ministry of Labour: The "roadmap" for suspensions of employment contracts in July (Ypourgio Ergasias: O odikos hartis gia tis anastoles simvaseon ergasias ton Ioulio) (ypergasias.gov.gr)
  • 24 July 2021: The branches-champions in the suspensions of employment contracts (Oi kladoi protathlites stis anastoles simvaseon ergasias
  • 30 July 2021: Ministry of Labour: The "roadmap" for suspensions of employment contracts in Augoust (Ypourgio Ergasias: O odikos hartis gia tis anastoles simvaseon ergasias ton Avgousto (ypergasias.gov.gr)
  • 01 September 2021: Opens tomorrow 2/9 the P.S. "ERGANI" for statements of suspensions of employment contracts for September (Anigi avrio 2/9 to P.S. ERGANI gia dilosis anastolon simvaseon ergasias gia ton Septemvrio (ypergasias.gov.gr)
  • 08 September 2021: Special purpose compensations: Currently €534 are credited to 6,551 beneficiaries (Apozimiosis idikou skopou: Simera pistonontai €534 se 6,551 dikaiouhous (www.protothema.gr)
  • 30 December 2021: Reactivation of Employment Contract Suspension (www.moneyreview.gr)

Citation

Eurofound (2020), Suspension of employment contracts, measure GR-2020-12/667 (measures in Greece), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/GR-2020-12_667.html

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