In a previous article, we were concerned with the provisions of Law 4808/2021, regarding the leave of employees related to their family obligations. Specifically, on the leave aimed at balancing work and private life for parents and caregivers. Also, leave aimed at protecting the family. In addition, we analyzed the provisions aimed at ensuring a minimum scope of protection for those exercising their rights in relation to the aforementioned types of leave.
We will close the series of our articles referring to employee leaves with those that do not fall into the above sections: the annual leave as well as the unpaid leave.
We will also refer to holidays, as they are codified and established under the same law.
Annual leave
Every year the employee is given the opportunity to abstain, for a few days, from providing work to their employer, while maintaining their claim for pay. We are referring to the annual leave. Its purpose is the rest and recreation of the employee.
As the case law of the ECJ has consistently accepted, annual leave has a dual purpose: to provide the employee with a period of relaxation and leisure but also with the possibility of replenishing their powers (indent: C-520/06, paragraph 25). There can, therefore, but be provided to employees. This, in simple words, means that the granting of free time cannot be legally replaced by monetary compensation. Even if the employee consents, accepts or requests it. An exception is the case of termination of employment, in which case, financial replacement of said right is deemed necessary.
The legislative framework
At EU level, the right to take annual leave is established by Directive 2003/88. Specifically, Article 7 provides for a minimum duration of the said leave of four (4) weeks. Respectively, at national level, the general legislative framework regarding the annual leave is set by law 539/1945. The latter regulates issues such as the duration of the specific leave, the conditions for obtaining it and the financial benefits associated with its granting.
In addition, law 539/1945 provided – until the entry into force of law 4808/2021 – that the employer was obliged to grant the specific leave until the end of each calendar year. The last day of the year was considered the “due” date of the granting of the last day of annual leave. As a result, its passing made the employer overdue and resulted in civil, criminal and administrative sanctions against them. In this context and given the provision of the right to transfer the leave, any (remaining-unfulfilled) claim of the employee for obtaining their annual leave was converted, after 1.1 of each year, into cash.
However, as legal theory (also) pointed out, the absolute prohibition of the right to carry annual leave was contrary to EU law. As accepted by the ECJ, Article 7 §1 of Directive 2003/88 prohibits national provisions or practices which provide that the right to paid annual leave is extinguished at the end of the reference period and / or a transfer period determined by national law. It is interesting to note that this is true even when the employee, due to a problem of theirs (eg sick leave) was not able to exercise their right to paid annual leave (indent: C-520/06, paragraph 25).
The ECJ, of course, points out that the transfer time cannot be unlimited. The transfer, as it accepts, should not exceed a specific time limit, beyond which the annual leave ceases to have beneficial effects on the employee as a time of replenishment and merely has the meaning of relaxation and leisure time (C-214). / 16 paragraph 33).
The recent regulation
Article 61 of Law 4808/2021 brings about interesting changes regarding the time of granting the annual leave. It maintains, first of all, the two existing restrictions on this provision. That is, it provides that the employer is obliged to grant the said leave within two (2) months from the relevant application of the employee. At the same time, the leave of at least half of the staff must be granted from 1 May to 30 September. [Of course, one question is not answered – not even with this provision: what will (should) happen if, in theory, all employees of a company apply for their leave on June 30 of one year for the months of July-August]…
The innovation is that the above provision modifies the time point of extinction of the right to obtain annual leave. It stipulates, in particular, that “… the eligible leave, per year, must be exhausted by the first quarter of the following calendar year”.
Despite this addition, the letter of the law does not seem to comply with EU law. Specifically, as shown by the new regulation, and is stressed by Circular No. 64597 / 03.09.2021 of the Ministry of Labor and Social Affairs: “Instructions for the implementation of Chapter A’” REGULATIONS OF INDIVIDUAL LABOR LAW “(articles 55-67) of part IV of Law 4808/2021 (Α’101) “, this addition extends the period of time within which an annual leave can be granted. At the same time, March 31 is considered as a due date for the employee to receive all the leave they are entitled to.
The new regulation, therefore, does not fill the gap of the lack of the right of transfer. On the contrary, it extends the time of fulfillment, without giving any reasons justifying the granting of the leave after the expiration of the calendar year (see, instead, the relevant provision of German law – Article 7 BUrlG “Time of taking leave, transfer and compensation for leave not taken). Therefore, the new regulation may, again, lead to circumventions.
Unpaid leave
Article 62 of Law 4808/2021 institutionalizes unpaid leave. This leave is provided by a legal provision, for the first time, in the national legal order. However, it is not an unknown institution as in practice it was already provided to employees even before its general introduction.
The pre-existing regime
Given the lack of general legislation under the previous regime, unpaid leave was introduced only for specific categories of employees based on collective arrangements (Collective Employment Conventions or arbitration awards), labor regulations or special provisions.
Of course, this leave could also be granted to an employee on the basis of an agreement with the employer. Its granting was therefore not obligatory, nor could it be imposed unilaterally by either the employee or the employer.
As was, however, consistently accepted in case-law, unpaid leave was a formal case of suspension of employment on the basis of an agreement concluded between the employer and the employee. The specific recognition of its character as a contractual suspension affected the formation of the obligations and the rights of the parties.
In particular, during this leave, the employee did not, of course, have to provide their services. Accordingly, the employer was not required to pay wages and, therefore, was not required to cover the employee’s insurance contributions. However, the duration of this leave was considered working time, since its issuance did not terminate the employment contract. It was therefore measured in determining the amount of any severance pay (end 751/2018 Supreme Court). At the same time, with the expiration of this leave, the employee had to return to their previous job and duties.
Current regulation
What is immediately mentioned above was confirmed, basically, by article 62 of law 4808/2021. This provision introduces, as already mentioned, for the first time-explicitly, in fact, the institution of unpaid leave in the private sector.
The condition for its granting is the individual written agreement between the employer and the employee. The maximum duration of this leave is set at one year. However, it is possible to extend it by a newer agreement of the parties.
Is it possible to grant unpaid leave of more than one year from the beginning? It is not right, in our opinion, to set a ceiling on its granting, since the possibility of a contractual extension is accepted from the beginning. Therefore: it is obviously possible for the agreement to last longer than one year, but it is preferable to agree on an annual, initially, duration and then, in order to avoid problems and concerns, to extend it according to this regulation.
The new law explicitly recognizes the nature of unpaid leave as a contractual suspension. It stipulates, in particular, that during it, the employment contract is suspended and no insurance contributions are due. In addition, there is an obligation to post the written individual agreement for the granting of unpaid leave to the Information System “ERGANI” by the employer, while a copy must be notified to e-EFKA.
In addition, §2 of the same provision stipulates that after the expiration of unpaid leave, the rights and obligations of the parties from the contract of employment are revived.
Finally, the fact that the duration of unpaid leave is considered working time is confirmed by the recent, No. 64597 / 03.09.2021, Circular of the Ministry of Labor. This Circular points out that for the receipt and calculation of the days of the employees’ annual leave, the period during which the employee was on unpaid leave is taken into account, referring, also, to article 2 §2 of law 539/1945.
Holidays
With the provision of article 60, law 4808/2021 codifies in a single provision the days of obligatory holiday. In addition, it expands the list of existing holidays. It adds to the existing holidays the 1st of January and the holiday of the Epiphany.
Therefore, the single list of holidays now includes the following: (a) 1st of January, (b) Epiphany (6th of January), (c) 25th of March, (d) Easter Monday, (e) 1st of May, (f) day of the Assumption of Virgin Mary (: 15th of August), (g) 28th of October, (h) day of the Birth of Christ (: 25th of December), (i) 26th of December.
At the same time, §2 of the same provision provides for the possibility of designating additional holidays, up to five per year, as days of mandatory or optional holidays for the whole country. The responsibility for this designation is vested in the Minister of Labor and Social Affairs. The relevant decisions are issued after the opinion of the Supreme Labor Council and are published in the Government Gazette.
In addition, it is possible to set some days as local holidays. Responsible for their appointment are the Regional Governors, without the condition of the previous opinion of Supreme Labor Council. This procedure is followed, respectively, at national and local level, for the abolition or change of the planned holidays.
Finally, special mention should be made in article 63 of law 4808/2021: it concerns the exceptions from the obligatory rest of Sunday and from the aforementioned public holidays. This provision amends by adding to articles 7 and 9 of the Royal Decree no. 748/1966 additional economic activities of businesses that are allowed to employ staff on Sundays and public holidays. Of course, in these cases the protective arrangements concerning the additional remuneration of the employees and the granting of their weekly rests take place.
The annual leave as well as the (in practice, sometimes, provided) unpaid leave serves different needs of the employees. The new institutional framework attempted to correct the incorrect wording concerning of the first and the legislative gap concerning the second. In both cases the attempt was not successful. It is a fact, however, that they cover, albeit in part, problems that businesses – and of course employees – have been facing for a long time. We look forward to future, necessary, improvements.
And so we do regarding the subject of the holiday of Sunday (and even more so regarding this specific holiday). The relevant provisions remain incomplete. The steps are taken timidly. We go blind to the point that we choose not to leave the market to self-regulate. We go blind to the point that we believe that we, alone, have the power to prevent what is happening in the western world.
For now.-
Stavros Koumentakis
Managing Partner
P.S. A brief version of this article has been published in MAKEDONIA Newspaper (October 10th, 2021).
Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.