For the past ten years, Greece dealt with a debt crisis which led to the implementation of austerity measures including tax increases and spending cuts, as well as several other reforms. As a result of the ongoing financial crisis, Greece’s GDP shrank at an alarming rate with the economy taking a major hit. Nonetheless, gradually there was an increase in business activities and the country’s economy showed signs of recovering from the financial obstacles and difficulties of the previous years.
COVID-19 impact/First wave of the pandemic
With the country’s economy slowly but steadily picking up, the outbreak of the COVID-19 pandemic had a severe impact on the Greek economy. Greece decided to adopt and implement lockdown measures consisting of restrictions on movement and gatherings across the country, aiming to contain the spread of the virus.
Furthermore, in the context of minimizing the risk of being contaminated by COVID-19, it was decided that restrictions and suspension of business, as well as of other economic activities, would be imposed, in addition to primary and secondary schools and other educational institutions also being shut down.
These lockdown measures had serious consequences for employment relationships, as was foreseen by the authorities. So the Greek government decided to proceed with the launching of programs and funds in order to prevent dismissals and support employers and employees.
The key employment support policies which were introduced during the first wave of the pandemic in Greece, by virtue of laws, acts of legislative content, ministerial decrees, and circulars, included the following:
- A special paid leave of absence provided for employees with children (in view of schools having been shut down).
- Flexibility regarding the formal notifications made to the authorities in respect of employees’ working hours.
- Suspension of employment contracts for businesses on lockdown by virtue of the decision of the government.
- Option for suspending employment contracts for businesses classified as seriously affected by the coronavirus crisis.
- Provision of a state subsidy for employees under suspensions and prohibition of dismissal for any such business thereof.
- Implementation of remote working policies by employers on a unilateral basis.
- Introducing social security support measures for employers and employees such as the suspension of social security obligations and making partial payments or payments in instalments regarding social security contributions.
- Stipulating tax relief measures for employers and employees such as suspension of tax related obligations.
- Launching of the SYN ERGASIA mechanism for subsidizing reduced working time and social security contributions.
- Granting of financial aid for businesses which have been profoundly affected by the COVID-19 pandemic, in the form of a refundable advance payment scheme which may be implemented by the enterprises meeting the conditions stipulated by the State.
Past the first wave of the COVID-19 pandemic
As of late spring 2020, the gradual lifting of the restrictive measures and the restart of business activity was announced by the authorities.
The government’s plan extended throughout the summer of 2020 based on the progression of the pandemic, while consisting of building a support system for the tourism industry in Greece and any such related business activity.
Late October and early November 2020, the second wave of the pandemic hit Greece, leading to the implementation of lockdown measures and restrictions on movements, gathering, business and economic activities once again.
Support and relief measures were also introduced in an effort to prevent dismissals and reduced economic activities.
Current economic conditions – Trends regarding employment law
Employers and employees in Greece make efforts to cope with the aftermath of the first and second wave of the pandemic and its negative impact thereof on employment relationships.
One of the most important aspects of the employment relationship which has been drastically changed due to the pandemic is surely the exploration of new ways of working, namely adopting flexible working systems such as working remotely.
Prior to the outbreak of the pandemic, remote working/teleworking in Greece was not the option most employers or even employees would go for, and in fact it was scarcely implemented, with few employers and employees choosing such a working system.
However, it is obvious that the pandemic has caused an increase in demand regarding flexible working arrangements and new operational models. To that effect, remote working is on the path of becoming the norm for the provision of services especially for specific industries.
Besides remote working, in order to overcome the financial difficulties brought upon by the coronavirus crisis, part-time employment and job-rotation schemes, if properly implemented, may provide for an alternative to employers facing financial hurdles.
Furthermore, the necessity to deal with the pandemic and resolve the problems which had come up as a result of the restrictions on business activity and movement imposed by the government, facilitated the changes made in respect of regulatory requirements not only for new, but also for existing ventures. In fact, the coronavirus crisis had a positive effect on speeding up the process and providing viable options in carrying out day-to-day business with government agencies of any kind.
So, despite the severity of the negative impact of the COVID-19 pandemic, there is room for optimism for new recruitments or even new-business setup, coupled with the overall improvements regarding regulatory requirements and the digital transformation of the business environment.
After all, Greece will manage to overcome the COVID-19 pandemic within the immediate future. Therefore, considering the latest reforms in regard to tax and business activities, in addition to the shift towards flexible working practices and the digital transformation, there is potential for economic growth and development in the post-pandemic era.
Managing Partner, Andersen Legal Greece
Partner - Head of the Employment, Andersen Legal Greece
Associate, Andersen Legal Greece
Associate, Andersen Legal Greece