Transfer of Business and protection of employees’ rights under Greek law
Transfer of Business
With the decree 178/2002 (A΄ 162) “Measures concerning the protection of workers’ rights in the event of transfer of undertakings, establishments or parts of establishments or businesses, in compliance with Council Directive 98/50/EC”, Greek legislation has been adapted to the provisions of Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, establishments or parts of establishments or businesses.
Where the Decree applies (Article 2)
The Decree applies to any contractual or statutory transfer or merger of undertakings, establishments or parts of establishments or undertakings to another employer.
It also applies to public or private undertakings engaged in profit-making or non-economic activities (Article 2(c)(1)). The administrative reorganisation of public administrative authorities or the transfer of administrative powers between public administrative authorities is not considered a transfer within the meaning of the Decree (continuation of Article 2(1)).
It does not apply to sea-going vessels.
The Concept of Transfer (Article 2)
A transfer of an undertaking is the transfer of an economic entity that retains its identity, understood as a set of organised resources for the purpose of carrying on an economic activity, whether primary or secondary. According to theory and case law, the manner of transfer is irrelevant. In order for there to be a transfer of an undertaking or a business or part thereof (Article 2 of Decree-Law No 178/2002), the transfer must involve the transfer of as many individual elements of the undertaking and in such a way that the transferred elements maintain their organic unity and are capable, under the new entity (employer), of achieving the intended profit-making, economic or technical purpose. The judgement as to whether or not the identity of the economic unit is preserved and, therefore, whether or not there is a transfer of an undertaking, holding or parts thereof, depends on an overall assessment of the circumstances of the particular case. In the context of this overall assessment, the following elements are crucial: 1) the transfer or not of tangible assets (buildings, machinery, etc.); 2) the transfer or not of intangible assets and their value; 3) the employment or not of a significant part of the workforce of the transferred business by the new entrepreneur; 4) the transfer or not of customers; 5) the degree of similarity between the activities carried out before and after the transfer; and 6) the duration of the possible interruption of these activities.
Definitions (Article 3)
Transferor means any natural or legal person who, as a result of a transfer, loses the status of employer in the undertaking, establishment or part of an undertaking or establishment.
Successor means any natural or legal person who, as a result of a transfer, acquires the status of employer in the undertaking, establishment or part of an undertaking or establishment.
Employees’ representatives are those defined by the provisions of Articles 1 and 2 of Law 1767/1988 “Workers’ councils and other labour provisions – ratification of the 135th International Labour Convention” (Government Gazette A’ 63), as in force at any given time.
In the case of enterprises or establishments employing fewer than fifty (50) workers, if there are no workers’ representatives, the workers shall be represented by a three-member committee elected by them in analogous application of the provisions of Article 1 par. 2 of Law 1767/1988.
Employee means any natural person who is linked to an undertaking by a dependent employment relationship, falling within the scope of the Decree
The scope of the Decree covers: a) employment contracts or employment relationships irrespective of the number of hours worked or to be worked,
(b) employment relationships governed by a fixed-term employment contract, in accordance with the provisions brought into compliance with Article 1(1)(a) of Article 1(1)(b), regardless of the number of hours worked or not worked. 1 of Directive 91/383/EEC; and
(c) temporary employment relationships, in accordance with the provisions brought into conformity with Article 1(1) of Directive 91/383/EEC. 2 of Directive 91/383/EEC.
Consequences of the transfer
a) Preservation of employees’ rights (Article 4)
Upon the transfer and from the date of the transfer, all existing rights and obligations of the transferor under a contract or employment relationship are transferred to the transferee.
The transferor shall, even after the transfer, be jointly and severally liable with the transferee for the obligations arising from the contract or employment relationship until the time the transferee takes over.
After the transfer, the transferee shall continue to observe the terms and conditions of employment laid down in a collective agreement, arbitration award, regulation or individual employment contract, without prejudice to Article 4(3) concerning rights under any existing occupational or inter-professional insurance schemes, either in the form of a group scheme in an insurance undertaking or in the form of an account operated within the transferred undertaking.
b) Change of terms, termination of employment (Article 5)
The transfer of an undertaking, establishment or part of an undertaking or establishment does not in itself constitute grounds for dismissal of employees. The provision in the first subparagraph of para. The first subparagraph of Article 5(1) shall not prevent, subject to the relevant provisions on dismissals, dismissals which may be made for economic, technical or organisational reasons involving changes in the workforce.
Information and consultation (Article 8)
The transferor and the transferee are obliged to inform the representatives of their employees affected by a transfer about certain key points concerning the individual terms and conditions of the transfer.
Wherein an undertaking or establishment there are no representatives of the employees for reasons beyond their control, the employer must inform all employees in writing, in advance, in good time and at the same time.
Any infringement of the provisions of Article 8 shall be subject to administrative sanctions in accordance with Article 9 of the Decree-Law.
Relevant institutional framework:
• Directive 2001/23/EC
• Directive 2001/23/EC; Directive 98/50/EC
• Decree 178/2002 (Government Gazette A’ 162)
• Article 6 of Law 2112/1920 (Government Gazette A’ 67), as in force
• Article 9 of Decree 16/18.7.1920 (Government Gazette A’ 158)
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.