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Publication of Law 4690/2020 regulating various matters of social and economic return-to-normality

Tuesday, June 2, 2020

Law 4690/2020 was published and got into force on 30th May 2020, regulating a number of matters belonging in different jurisdictions and sectors of policy, all related to facing the COVID-19 crisis and trying to return to social and economic normality. The law includes, inter alia, a section legislated by the Ministry of Labor, dealing with employment matters.

I. Regulating labor mechanism “Syn-Ergasia”

Article 31 of the law in question provides for the way of operation of the discussed and expected labor mechanism “Syn-Ergasia”. More specifically, the mechanism will apply in the period from 15.06.2020 until 15.10.2020, allowing businesses entitled to benefit from this scheme to reduce up to 50% the working time of their full-time employees, either seasonal or not, who hold a contract of dependent employment. The reduction may concern either a part or even the total of each employer’s workforce, while employers may make use of this scheme for one or more months during the enforcement period, as mentioned above. As far as employees submitted under this mechanism are concerned, employers are restricted from terminate them or amend their contract’s terms and conditions.

The employer participating in this mechanism shall cover all the insurance contributions of the reduced employee, calculated on the basis of their full nominal salary, during the period of use of this scheme. At the same time, the state will cover 60% of the amount of the employee’s salary that corresponds to the working time reduction, while the employee’s amount of net earnings shall not fall under the minimum wage limit, as currently set by Greek legislation, otherwise the State shall cover the amount requested to complete the minimum wage limit of the reduced employee. As to the annual leave bonus and the Christmas bonus for the year 2020, these will be analogically distributed to the employees entitled, calculated on the 60% of their reduced working time.

This mechanism is addressed to all businesses, either seasonal or all-year operating, regardless their Activity Code Number (ΚΑΔ), which show:

  • For businesses obliged to submit VAT Periodic Statement, at least 20% reduction of turnover in comparison with the turnover they had during the reference period, as follows:

       Month of entering the mechanism:  Losses showed in months

  • June: at least 20% turnover loss deriving from March and April 2020 (cumulatively calculated)
  • In July: at least 20% turnover loss deriving from March - April - May 2020 (cumulatively calculated)
  • In August - September: at least 20% turnover loss deriving from March - April – May – June 2020 (cumulatively calculated)

It is noted that the reference period and the way of calculation of the turnover losses is different for businesses which use a double-entry accounting system and businesses using a single-entry accounting system, according to the respective tables as provided in the Law (article 31§4a).

  • For businesses not obliged to submit VAT statement or relieved from this tax obligation, at least 20% reduction of gross earnings in comparison with the amount of gross earnings they had during the reference period, as follows:

       Month of entering the mechanism:  Losses showed in months

  • June: at least 20% gross earnings loss deriving from March and April 2020 (cumulatively calculated)
  • In July: at least 20% gross earnings loss deriving from March - April - May 2020 (cumulatively calculated)
  • In August - September: at least 20% gross earnings loss deriving from March - April – May – June 2020 (cumulatively calculated)

In this category of businesses, the reference period includes the gross earnings of the year 2019, divided by six (6) in case of entering the mechanism in June, by four (4) for entering the mechanism in July and by three (3) for entering the mechanism in August – September.

Businesses with specific Activity Code Numbers, related to the aviation sector (such as air transportation, aircraft maintenance etc.) may participate in this mechanism for a more extended time period, ending on 31.12.2020, whereas employers are obliged to cover insurance contributions of their reduced employees only to the extent of the amount that is calculated on the real –reduced working time and not on the basis of their whole nominal wage.

II. Abolishment of the rotation scheme option (operation with “safety personnel”)

By virtue of §9 of article 31 of the examined law, the opportunity of employers to operate with “safety personnel” is abolished. The abolished article was regulating that the employer could submit at least 50% of its workforce under a rotation scheme, using every week for operation of its businesses only a number of its employees as “safety personnel”, meaning that employees may work for at least 2 weeks per month, either consecutively or intermittently, while the employer could use this exceptional measure of organizing the employee’s working time for maximum 6 months starting from 20 March 2020.

  • As this provision is abolished, due to heavy criticism unleashed by the political opposition of the government, this measure does no longer constitute an option for employers as of 15 June 2020.

III. Supporting measures for seasonal businesses & employees

Α. Employers of the business area of tourist and hotel accommodations, as well as tourist buses, who re-hire on the basis of a dependent employment contract employees who were also employed by them in the year 2019, may place a part or even the whole of their workforce under suspension from 1.6.2020 until 30.9.2020, whereas suspended employees will be entitled to receive €534 monthly state aid according to the time period of suspension. Employers may not terminate any contracts while using the suspension option, otherwise terminations are void and null.

Employers in question shall permanently recall suspension of employment contracts according to the percentage of completeness their business periodically notes, as follows: for 20% completeness, they shall recall suspension of at least 1/3 of their employees, for 50% at least 2/3, and for 80% the total workforce shall be permanently recalled from suspension. At the same time, employers may use the “Syn-Ergasia” scheme, as described above, to employees whose suspension has been permanently recall.

B. Seasonal employees of the tourist and catering industry, who worked whole or part-time during 2019 and are not re-hired for 2020, yet they are entitled to receive an unemployment subsidy, shall receive, for the months June- to- August, a state aid equal to the last unemployment subsidy they received.

IV. State aid to employees on leave

Employees in businesses suspended by state order, who had been exempt from receiving the state benefit due to the fact that they were on a legal paid leave (of any nature, such as maternity leave, holiday leave), when suspension of their business took place, are entitled to receive the state benefit from 01.05.2020 until the day when suspension of their employer’s business expires, if the period of their legal leave ended during the period of suspension of their employer’s business. The state aid is calculated on the basis of a monthly aid of €534, according to the actual days of suspension.

V. Exceptional supporting measure for parents

Article 35 of the law provides the following exceptional option to employees who are parents to (a) children registered to infant schools, nursery schools and childcare centers, (b) children attending institutions of compulsory education, (c) children attending special schools or institutions providing special education, regardless children’s age, as well as children with impairments who are beneficiaries in receiving open care in facilities for persons with impairments: they may agree with the employer to work on a reduced working timeline until the end of the school season 2019 – 2020, without facing a pay cut. The reduction of working time may be up to 25% on the employee’s daily timeline.

The reduced working hours shall be replaced at a later stage by the employees – parents, who will be called to work extra-hours on another period of time, as agreed with the employer, without receiving extra-payment for overtime working hours.

This exceptional measure is provided to workers who are parents as supplemental support, in addition and over and above of the special purpose leave.

VI. Option to extend suspension of employment contracts to certain businesses and state aid to their employees

Employers of the private sector of tourism, transportation, culture and sports, who have been adversely affected by the crisis, according to their Activity Code Number (ΚΑΔ), as defined by the Ministry of Economy, may extend suspension or place for the first time under suspension a part or the whole of their workforce for thirty (30) days and only until 31.07.2020.

The same option is provided to private sector employers of the food & drinks industry, with ACD (ΚΑΔ) belonging to the adversely affected businesses, which may as well extend suspension or place for the first time under suspension a part or the whole of their workforce for thirty (30) days, but only until 31.06.2020.

Said employers, while using the option of suspension, shall not proceed with terminations of employment contracts, otherwise said terminations are null and void. Additionally, for thirty (30) days after the end of the suspension period, employers shall maintain the same number of employees and the same type of employment contracts. Suspended employees are entitled to receive state aid by analogy of the days of suspension, calculated on the basis of €534 corresponding to thirty (30) days.