COVID-19: areas of law to consider and the case of Greece | Press Release

As the world remains in shock in front of the Covid-19 pandemic, governments have been implementing measures in order to control the spread of the virus and support their economies. As we navigate these unchartered waters, it is important to consider the legal parameters of Covid-19 and await to see how it will affect different areas of law.

The Greek Paradigm

In response to the Covid-19 pa

In order to support businesses and employees affected, the Greek government announced several supportive measures. The most important include:

For businesses that were forced to shut down

suspension of all tax and social security payments for a period of 4 months
suspension of payment of business loans until September 2020
payment of 60% of the amount of all business leases for March and April
suspension of the payment of issued cheques for a period of 75 days

For businesses still in operation

suspension of social security payments for March and April; these payments shall be made in 4 installments starting from September 2020
reduction of 25% on the amount of social security payments if made on time
suspension of the payment of issued cheques for a period of 75 days

For employees of businesses that were forced to shut down

benefit of EUR 800 for March and April in the form of special compensation
state coverage of social security payments for March and April
payment of 60% of the amount of residential leases
reduction of 25% on the amount of social security payments if made on time

For employees of businesses still in operation

benefit of EUR 800 in the form of special compensation for employees whose employment contracts have been suspended due to covid-19
state coverage of social security payments for employees whose employment contracts have been suspended due to covid-19
reduction of 25% on the amount of social security payments if made on time

It is also worth mentioning that all terminations of employment contracts shall be considered null and void for a period of 45 days after the suspension period due to Covid-19.

For independent professionals

benefit of EUR 800 in the form of special compensation for designated categories of independent professionals
benefit of EUR 600 in the form of a voucher for the completion of online certification programs for independent professionals of particular fields (such as lawyers, engineers, economists etc.); the amount of EUR 400 is to be paid upon registration and the remaining amount of EUR 200 is to be paid upon the completion of the online program
suspension of social security payments for March and April; these payments shall be made in 4 installments starting from September 2020
reduction of 25% on the amount of social security payments if made on time

Contracts and Covid-19 as force majeure

The most common question that arises here is whether a party to a contract shall consider itself released from its contractual obligations invoking Covid-19 as a force majeure event. The answer can only be found in the relevant clause of the contract itself, which shall only be interpreted pursuant to the law that governs the contract. In addition, issues of suspension of contract, extension of the contractual period and inability of a party to offer the entire range of agreed services will, almost certainly, also arise.

Expiry of all kinds of agreements during the period of forced shutdown or reduced activity are expected to create a number of problems, as it will be quite challenging for businesses to negotiate with other service providers or arrange for their foreign employees to return home after the end of the service period.

Employment Law

Questions relating to the employer–employee relationship must also be mentioned. These include:

Can the employer suspend the employment contracts of employees or require them to take annual leave?
Is the employer under an obligation to protect the employees’ health?
Can employee infections be considered as workplace injuries and can they refuse to return to work?

Again, the answer will be given by the law that governs the employment contract. In any case, employees cannot be deprived of the protection afforded to them by the provisions of the applicable law, according to Art. 6 para. 2 of the Rome Convention.

Company Law

Companies incorporated in Greece, the Articles of Association of which provide the option for General Meetings of Shareholders to be held by means of remote communication (as allowed by Art. 125 of Law 4548 of 2018) will find themselves relieved compared to companies that do not; in fact, the latter category will find it rather hard to resolve this matter, as Greek Company Law still demands at least one General Meeting of Shareholders per year.

Leasing Agreements

The landlord – tenant relationship will also be heavily affected. Questions that may arise include:

Is a tenant entitled to terminate in case a block of offices or a shopping center remains closed for a substantial period?
Shall a leasehold agreement which is set to expire during the application of the government measures be considered as extended until the end of this period?
Shall a leasehold agreement due to expire in a few months from today be considered as extended for an amount of time equal to the duration of the government measures in order to allow the tenant ample time to find a new lease?

This is probably an area in more need of legislative intervention, as the mere interpretation of the relevant Civil Code provisions alone cannot resolve such issues.

Other areas that are of interest

franchise agreements, where the licensee has difficulty covering royalties
contracts where a foreseeable event would trigger their termination (e.g. sale of goods via the shipment of an agreed portion on a weekly or monthly basis)
charterparties providing for a certain period of laytime, which shall almost certainly be exceeded due to the imposed measures

Only time will tell how legal questions will be answered and to what extent. Until then, the debate continues.

Prepared by the team at Ioannis Vassardanis & Partners.

The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.