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Directors and other employees of special responsibility and trust who are exempt from working time rules

Iason Skouzos - TaxLaw > Practice Areas  > Labor & Employment  > Directors and other employees of special responsibility and trust who are exempt from working time rules

Directors and other employees of special responsibility and trust who are exempt from working time rules

(Interpretative circular No of 3202/14.01.2022 Ministry of Labour and Social Affairs )

1) Within the meaning of Article 2(a) of the Washington International Convention on the limitation of working hours in industrial enterprises, ratified by Law No. 2269/1920, the provisions of the Convention shall not apply to persons holding positions of supervision, management, or trust.

These persons, although they do not stop to be employees in a dependent employment relationship, are exempted from the application of the provisions of the labour legislation concerning working time limits, the 8-hour provisions, weekly rest and compensation or a bonus for overtime and surplus work or work on Sundays and public holidays or at night or away from home, which are incompatible with their prominent position and the fulfilment of the obligations assumed under their employment contract.

In any case, as far as their registration in the EPGANI system is concerned, the status of person holding a supervisory or managerial position or a position of trust must be included in their individual employment contract as an explicit term, in accordance with the second paragraph of Part B of the Decision of the Minister of Labour and Social Affairs No 90972/15.11.2021 (B’ 5393).

2) For the purposes of registration in the ERGANI system, such employees who hold a supervisory, managerial or trust position shall be considered to be those who:

A. a. exercise managerial authority over other employees of the company; or

  1. represent and engage the company towards third parties; or
  2. are members of the board of directors or equivalent management board of the employer; or
  3. are shareholders or partners holding more than 0,5 % of the voting rights of the employer

or

  1. are in charge of directorates, units or departments or other autonomous organizational units of the employer company specified in its organization scheme, if such employees are remunerated with agreed monthly salaries not less than six times the minimum statutory salary,

or

  1. are paid agreed monthly salaries not less than eight times the applicable statutory minimum salary. . . “

(i) Case A. refers to employees who must meet one or more of the four conditions set out in subcases (a), (b), (c), (d).

Specifically, for subcases (a) and (b), it is noted that they relate to employees who, due to their abilities and the employer’s special confidence in them,

either exercise management and supervision over the whole of an enterprise or business,

or they supervise an independent or essential department or department or function of the company or business (financial management, sales/commercial management, human resources management, technical management, information technology management, supply chain management, controlling, etc.), which they direct and supervise in order to have a decisive influence on the direction and development of the company or business,

or hold a position of supervision or trust with the employer,

and who, irrespective of the number of their subordinates, are significantly distinguished from other employees, because they exercise for the most part the rights of the employer, such as the hiring and firing of staff in respect of whom they act as employer, the representation of the company to third parties (irrespective of the subject matter or financial scope of their authorization and the position they hold), the taking of important decisions to achieve the employer’s purposes, etc. etc. As representation and engagement is that which is related to the development of an initiative and not to simple management actions, such as signing cheques for small amounts to pay the company’s existing liabilities or signing or co-signing balance sheets.

ii) Case B. refers to cases of employees for whom the following two conditions must be fulfilled cumulatively:

– they must be in charge of directorates, units or departments or other autonomous organizational units or functions of the employer company in accordance with its organization plan, if the employer company entrusts them with the supervision of part of its continuous, intermittent or occasional, but in any case, essential operations, irrespective of the number of their subordinates, and

– their agreed monthly remuneration is in any case not less than six times the minimum statutory salary.

Regarding the meaning of the monthly remuneration agreed above, according to the case-law, the agreement may be written or oral, explicit, or implicit. In this way, for example, voluntary benefits become compulsory if they continue and are repeated over a long period of time and even at regular intervals without the prior reservation of their unilateral withdrawal, furthermore the business custom may give rise to rights and obligations, etc. All these are considered to become part of the individual employment contract by means of the above mechanisms, if they are granted, not as a reward for the result, but as return for the work. Therefore, any kind of remuneration (e.g. monthly salary in the strict sense of the term, supplies, a bonus granted in exchange for work, etc.) and benefits (e.g. provision for the use of a car, mobile telephone coverage, group insurance policy, etc.), if and insofar as they have become compulsory as described above and are granted in exchange for the work performed, are taken into account in the calculation of the dismissal compensation and are considered regular remuneration. However, they shall not include benefits which it is uncertain whether they will be granted (e.g. bonuses linked to the achievement of individual or company targets).

Consequently, when calculating the agreed monthly remuneration for the purposes of the above case B (and C below), the explicitly agreed monthly remuneration paid in written form is taken into account, plus any other amount or benefit, which is also taken into account when calculating the compensation for termination of the employment contract. Ιf there are no such amounts and benefits to be taken into account in calculating the above-mentioned compensation for termination of employment, only the monthly remuneration expressly agreed in writing shall be taken into account.

Moreover, the statutory minimum salary shall be considered to be the reference unit amount of the statutory minimum monthly salary of an unskilled worker, without any increase.

Therefore, if the above conditions are not met cumulatively, such employees do not fall within the scope of application of the Ministerial decision and therefore should not be declared in the P/EGANI as employees holding a supervisory or managerial or trust position.

iii) Case C. refers to any employee who is paid agreed monthly salary that is not less than eight times the current minimum statutory salary. In this case, the agreed monthly salary, and the statutory minimum salary, as defined above, shall also be taken into account in this calculation.

Therefore, if the requirement as to the amount of the agreed monthly salary is not fulfilled, the employee in question does not fall within the scope of the above-mentioned ministerial decision and should not be declared in the EPGANI P/A as an employee in a supervisory, managerial or trust position.

It should be noted that in cases B and C, the restriction on the agreed monthly remuneration (more than six or eight times the minimum statutory salary, respectively) as a prerequisite for the employee to be granted the status of a person holding a supervisory, managerial or trust position, acts as a counterweight to their exemption from the specific provisions of the labor legislation, taking into account in particular the level of the average salary paid in the country.

In conclusion, an employee, irrespective of the status assigned to him, if he does not fall within one of the above cases A, B, C, is outside the application scope of the Ministerial decision 90972/15.11.2021 and, consequently, should not be declared in the ERGANI system as an employee in a supervisory, managerial or trust position.

 

*             The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.

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