Εmployee resignation (How dangerous can it be?)
“I packed it all and left” Kimon (: Orpheus Zachos) said to his brother Philip (George Constantinou) in the famous Greek film of 1967 “Welcoming the Dollar”. Kimon was referring to his resignation, because the manager made the mistake of saying: “Mr. Angelucco, could you please bring me this folder?”.
Kimon’s resignation was quite complex for his family, but very simple for the employer. Kimon, indeed, left. And the business did nothing. And it had nothing to do.
But things are not as simple today. The consequences of failing to comply with the procedural requirements in the event of an employee’s resignation are probably unjustifiably detrimental to the business…
II. The employment contract and its termination
The employment contract is that which binds the employer to the employee for the provision of the latter’s services to the first.
There are three ways to terminate an employment contract. Consensually, with the employer terminating it (: dismissal) and with the employee terminating it (: resignation).
The resignation is effective after the employer or employee terminating makes a statement (expression of will). In case the employee wishes to terminate, such statement can also be implicit. But in case the employer wishes to terminate, their statement must be explicit.
In a bit more detail, when an employer chooses to dismiss an employee, they are required to carry out a series of (necessary-procedural) actions. Failure to comply with the specific obligations has significant (and damaging) legal consequences.
But even when the employment contract is terminated by the employee, the employer has to fulfill a series of (formal) requirements. In particular, the employer is obliged to announce the resignation of the employee to OAED through the “ERGANI” platform. The (specific) obligation to notify must be met within four business days after the resignation of the employee (Article 38 of Law 4488/2017). Failure to comply with said obligation can have extremely adverse consequences.
III. The resignation of the employee and the obligations of the employer
1. The provisions of the law
1.1. According to Article 38 § 1 of Law 4488/2017:
“The employer is obliged to submit, by electronic submission of the relevant forms provided in Ministerial Decision 295/2014 (B 2390) (form E5: Notice of resignation) to the Ministry of Labor, Social Security and Social Solidarity platform “ERGANI”, a notification in any case an employee resigns, of a termination of an employment contract set for an indefinite time or of a termination of a fixed-term employment contract or works contract, no later than four (4) business days after the employee’s resignation, the termination of a contract of indefinite duration or the termination of the fixed-term employment contract or works contract, respectively. ”
1.2. And, under paragraph 2 of the abovementioned provision:
“The notification of a resignation must be accompanied either by an electronically scanned form signed by the employer and the employee or by an out-of-court declaration by the employer informing the employee that such voluntary resignation has occurred and that their resignation will be submitted to the “ERGANI” information system. In the latter case, the employer ‘s extrajudicial declaration shall be served to the employee no later than four (4) business days after the voluntary resignation and the announcement shall be made the following business day after the extrajudicial declaration was served. If the employer fails to comply with the obligations relating to the voluntary resignation, including the submission of the accompanying documents, the employment contract shall be deemed to have been irregularly terminated by the employer.”
2. Differences from the previously existing legislative framework
The provision of article 38 of Law 4488/2017 introduced two important amendments to the provisions of the law so far regarding the obligation of the employer to announce the voluntary resignation of the employee (Article 2 Law 2556/97, Article 65 Law 3996 / 2011). Specifically:
(a) It shortened the deadline to submit the notification, cutting it into half (from eight days to four days);
(b) It provided for the compulsory attachment of the electronically scanned form E5 signed by the employee, which was, until then, optional.
These amendments should not be treated as “just a formality” or as “minor”.
IV. The obligations of the employer and the consequences of their non (timely) compliance
1. The obligations of an employer in the event an employee resigns are two (which are basically fulfilled through ERGANI):
(a) Announcement of the employee’s resignation in just four days
(b) Submission of the documents required by law
Possible non-compliance (or non-timely compliance) with the specific obligations of the employer can have extremely negative consequences. The main problem is that such omission serves as a presumption (fortunately refutable) in favor of the employee, that the latter’s voluntary resignation will be considered as an irregular termination of the employment contract by the employer.
2. It is noteworthy that if four days after the employee’s resignation pass (without the required by law submission to ERGANI having taken place):
(a) The system does not accept any late electronic submission of resignation – a handwritten submission must be submitter.
(b) Late submission of a handwritten form E5 by the liable employer shall be deemed to be an irregular termination of the employment contract. This is even when the employee’s signature is on the form (: OAED circular no. 91869 / 21.12.2017).
3. Any mistake by the employer or failure to act within the four-day period is not to be forgiven! In such a case, the employee has the right to claim that they were fired and did not resign. The law provides them with the relevant presumption and thus greatly facilitates a relevant evidentiary process.
It is important to note, however, that such a (presumed) dismissal of the employee will be null and void. This is because the formal requirements of its validity have not been met. Moreover, the employer’s claim would be that there is not even a dismissal.
V. The (possible) exploitation of the employer’s omissions
In case the employer fails to fulfill their obligations, the employee has three options:
(a) To accept (explicitly or implicitly) the resignation and the procedure that was followed – whereupon the employment relationship will be terminated.
(b) To claim a dismissal compensation due to the dismissal having taken place without a notice.
(c) To sue for claims resulting from the invalid dismissal. That is to say, late salaries but also their re-employment in the job.
In each of the last two cases, the employer will have the burden of proving that the termination of the employment relationship was due to resignation rather than dismissal. What the employer would be asking for in this case would be to not be obliged to pay compensation or, alternatively, late salaries and to not be obligated to accept the services offered by the employee.
VI. The problems of the employer
In some cases, the employer faces particular difficulties when it comes to the timely announcement of an employee’s resignation. Specifically:
1. The absence of the employee as an implicit termination of the employment contract – the time the relevant extrajudicial declaration by the employer was served
1.1. When the employee:
(a) stops coming to work without notice (or without an explicit statement of resignation); or
(b) refuses to sign their resignation statement on the relevant form;
The termination of the employment contract on their part is implicit. In this case, the employer faces significant procedural difficulties.
1.2. According to the relevant legislation (III.1.2. above), the employer is obliged to make an out-of-court statement to their employee regarding their resignation, which has already taken place. But there is an important question to be asked, regarding the employer. Specifically: when exactly could they conclude that the employee implicitly terminated their contract, in order for the employer to make the relevant announcement to “ERGANI”?
1.3. It should be stressed at this point that the abstention of the employee from their duties may be justified and legal (eg leave, pregnancy, maternity leave, enlistment and sickness – as provided by law). In such cases no one can expressly argue that the employee implicitly terminated the employment contract.
1.4. But there are also cases of unjustified abstention from work. Cases associated with a refusal to cooperate and make their resignation formal.
It is important in these cases to assess with sufficient certainty when exactly the employer receives the employee’s implicit declaration of termination. This point will be judged by the specific circumstances of each case. The case law gives one important (and indefinable) direction: good faith. It is therefore a question of interpretation that the employer can hardly manage.
1.5. The fact that the announcement of the resignation to ERGANI should take place within a specified few days makes it even more difficult for the employer to choose. The law (article 38 of Law 4488/2017) does not help.
The employer has a number of questions. Indicatively:
(a) Can the employer (conventionally) agree with an employee that after a specific period of unjustified absence (eg three or five or ten days), it will be considered that the latter has resigned?
(b) Will this (under a) period of time run parallel to the four working days of the employee’s absence provided by law (Article 38 § 2 of Law 4477/2017) and what are the legal consequences in this case? And, further, when exactly should the employer make their out-of-court statement in order not to be time-barred?
(c) And if the employer can only act within these four days and make their extrajudicial declaration on the first day of the employee’s arbitrary absence, what would happen?
It is safer to have the employer’s out – of – court statement served within four days after the employee’ s unjustified absence. However, each case should be evaluated individually, depending on the specific circumstanses.
2. The (stifling) deadline of one day from the day the employer’s extrajudicial statement was served for posting the notice and the relevant proof that the statement was served to the employee to ERGANI
This (indeed stifling) deadline is sure to cause serious practical difficulties, especially if the serving takes place far away from the headquarters of the company. And it consequently raises difficult questions for all employers. Indicatively:
(a) If the declaration is affixed (Article 128 §4 Code of Civil Procedure – when, despite the process of serving may take more than one day, it is falsely considered that is has taken place on the day of the affixing), when should the submission (of the declaration and of the document proving the declaration was served) to ERGANI take place?
(b) And, much like in the case of the affixing, what date should we consider as the date the declaration was serve to an employee who is of an unknown residence (Article 134 § 1, 135 §1, 136 § 1 Code of Civil Procedure), given the procedural steps mentioned above? And when should the submission of the extrajudicial declaration and proof that the declaration was served be submitted?
In the first of the above cases, it is more appropriate not to take into account the retroactive effect of the service, but the time taken to complete the relevant procedural steps. The day after their completion, the submission to “ERGANI” should take place. Otherwise, it would always be impossible to meet the deadline (Law 4488/2017, Article 38 § 2, esp. (c) above under III.1.2). In the latter case, however, the solution is provided by Article 136 par. 1 Code of Civil Procedure. According to this article, the submission to “ERGANI” should take place on the next business day following the completion of the publications, in accordance with Article 135 par. 1 of the Code of Civil Procedure, and for the delivery of the extrajudicial declaration within the prescribed four-day deadline, to take into account the initial service to the competent prosecutor.
And, as if all of these problems were not enough, there is one more to add to the pile of problems a business has to bear:
Paragraph 5.20 of (the subsequent) Ministerial Decision No. 40331 / D1.13521 / 19.9.2019 (referring, inter alia, to the electronic submission of forms to ERGANI) provides that the deadline for submission of the E5 form is four days after the voluntary resignation. This provision, however, is contrary to Article 38 § 2 Law 4488/2017-above under III.1.2.), which stipulates that when an extrajudicial declaration regarding an employee’s resignation is served, the deadline for notifying ERGANI is five (and not four) days.
Employee rights are a given. And must be respected.
And so is the protection they need to enjoy from the State and business.
But one question still seems to be important: Does the legislator not have to make good legal (technically speaking) texts?
And, even more so, when laws prove to be problematic on many levels, isn’t the legislator responsible for their modification?
The presumption of irregular termination of the employment contract in the event that the employer fails to timely meet their obligations: (a) to have the relevant extrajudicial declaration served to the employee, (b) to submit the relevant document proving the declaration was served to ERGANI and (c) to post the relevant accompanying documents, is unjustifiably tough on the business. And even more so: it also works, unjustifiably, in favor of the employer operating in bad faith.
And, as if all this was not enough, the recent Ministerial Decision (under V.2 above) was issued, which, illegally, unjustifiably reduced the deadline for submitting to ERGANI the proof of service required by law.
One thing is certain:
Growth support cannot go through legislative paths that not only do not solve, but also create problems for businesses, adding to the already existing problems.
P.S. A brief version of this article has been published in MAKEDONIA Newspaper (December 29th, 2019).