Equal Pay: Employee Claims, Burden of Proof and Risks for Groups of Companies
In previous articles, we examined what changes for businesses under the very recent law on equal pay. We also attempted to set out a roadmap for their compliance. The specific law is not limited to establishing rules on pay transparency. The more substantive change lies in the enforcement mechanisms: employees gain broader access to information—something that, until now, employers have consistently wished to avoid—the burden of proof shifts more readily to the employer, compensation is not subject to an upper limit, and the Labour Inspectorate may impose specific corrective measures. The relevant critical provisions (Articles 8 to 20 and 27) of the law enter into force on 1 November 2026 (Article 48 §2 of Law 5316/2026).
Pay policy is therefore transformed into a set of demonstrable rules. A salary increase, a bonus or an individual exception that was not documented at the time the decision was taken may subsequently have to be justified and adequately substantiated before the Labour Inspectorate or the competent court. For groups of companies, the risk is broader, as the comparison may, subject to certain conditions, extend beyond the boundaries of the company that entered into the employment contract.
The Claim Does Not Require an Active Employment Relationship
Any person who considers that they have suffered loss as a result of discrimination or a breach of the principle of equal pay is entitled to administrative and judicial protection, even where the employment relationship within which the alleged infringement occurred has ended. The Greek Ombudsman, legal persons, associations of persons and trade union organisations may, with the employee’s consent, bring a legal action or remedy in the employee’s name or intervene in support of them (Article 15 of Law 5316/2026; Article 52 of the Labour Law Code).
A business cannot, therefore, assume that the risk ceases when the employee leaves or upon a general declaration that all amounts due have been paid. It must retain reliable records concerning positions, remuneration, evaluations, promotions and exceptions that affected pay progression, subject to data protection rules and the lawful time limits applicable to their retention.
Full Compensation Without an Upper Limit
A breach of the principle of equal pay or of a pay transparency obligation gives rise to a claim for full compensation. This covers actual loss and loss of profit, as well as non-material damage, without any upper limit.
In determining compensation, account is taken in particular of retroactive pay differences, bonuses and benefits in kind, default interest, loss of income or professional opportunities and loss arising from intersectional discrimination (Article 16 of Law 5316/2026; Article 53 of the Labour Law Code).
The commencement of the limitation period is also particularly significant. In equal pay claims, the limitation period does not begin before the person adversely affected becomes aware of the infringement or can reasonably be expected to have become aware of it.
The law establishes a rebuttable presumption of knowledge when the employee receives the pay information to which they are entitled or when the employment relationship ends in any manner. Lack of transparency, therefore, does not protect the employer; on the contrary, it may postpone the commencement of the limitation period.
The Burden of Proof and Its Shift to the Employer
The employee is not required to prove the entire mechanism of discrimination in full from the outset. It is sufficient to invoke facts or evidence from which direct or indirect discrimination may be presumed. The employer then bears the burden of proving that the principle of equal treatment was not breached.
The shift in the burden of proof is triggered in particular where pay transparency obligations have not been complied with, unless the employer proves that the infringement was manifestly unintentional and minor in nature (Article 18 of Law 5316/2026; Article 54 of the Labour Law Code).
The court may additionally order the business to disclose any relevant evidence under its control, even where that evidence contains confidential information, subject to specific penalties in the event of any unauthorised disclosure.
The subsequent preparation of a general justification is not sufficient. The business must have contemporaneous, specific and consistent documentation explaining why two employees are remunerated differently.
Who Is the Comparator?
The comparison is not limited to persons holding the same job title. The critical question is whether they perform the same work or work of equal value, on the basis of skills, effort, responsibility, working conditions and other objective, gender-neutral criteria.
Nor is it necessary for the comparator to be employed at the same time as the claimant. An employee who worked in the past may be used as a comparator, while, where there is no actual person of another sex, a hypothetical comparator and other evidence, such as statistical data, may be used.
The law does not prohibit every difference in remuneration. Experience, performance, specialised skills, seniority or increased responsibility may constitute lawful grounds for differentiation, provided that they are applied consistently, are proportionate to the objective pursued and do not conceal direct or indirect discrimination.
Comparison Within a Group of Companies
The legal independence of companies within a group does not always preclude intercompany comparison.
The law (Law 5316/2026) provides that the examination of comparability may extend beyond the same employer where there is a single source determining the elements of pay relevant to the comparison. The Directive refers, as an indicative example, to terms determined centrally for several companies within a holding company or group.
However, the mere existence of a shareholding relationship, a common corporate name or the use of similar job titles is not sufficient. The critical question is who has the actual authority to determine or change basic salary, pay ranges, bonuses and promotions.
Centrally determined pay scales, a common evaluation system, a single approval committee or mandatory approval by the parent company may constitute indications of a single source.
This does not automatically mean that all companies become joint employers or are jointly and severally liable. It does, however, broaden the scope of comparison and makes a clear mapping of responsibilities between the group and the individual employers necessary.
The Procedure Before the Labour Inspectorate
An employee may file an application concerning a labour dispute based on alleged pay discrimination and request corrective measures.
The Labour Inspectorate calls upon the employer to produce its pay policy, the criteria for pay progression and the average pay levels of the comparable category, broken down by sex.
The application is notified to the Greek Ombudsman, who is given access to the relevant information, may attend the proceedings and may request additional clarifications (Article 27 of Law 5316/2026; Article 570A of the Labour Law Code).
Failure to provide the requested information is treated as an absence of justification, while pay differences that are not justified are presumed to be discriminatory.
Where an infringement is established, the employer is called upon to implement corrective measures within a reasonable period and, in any event, within the following six months.
The Labour Inspectorate may order the cessation of the infringement or impose organisational and structural measures.
Failure to comply with the order may result in a recurring fine for each quarter, in addition to the other administrative penalties (Article 17 of Law 5316/2026; Article 573 §3A of the Labour Law Code).
Prohibition of Retaliation
Dismissal, termination of the employment relationship or any other adverse treatment in response to an internal complaint, testimony, administrative proceedings or judicial proceedings concerning equal pay is prohibited.
The protection covers both employees and their representatives (Article 20 of Law 5316/2026; Article 44 of the Labour Law Code).
Following the submission of a request or complaint, decisions concerning evaluation, bonuses, transfer, promotion or termination of the contract must be based on an independent and adequately documented reason.
Even a lawful management decision may give rise to an additional claim if it operates as retaliation for the exercise of a right.
What the Business Must Be Able to Prove
The employer’s real defence is not a general equality manual but a functioning evidentiary infrastructure.
It must be possible to establish: what the value of each position is and how it was assessed; which criteria determine salary and pay progression; who approved each exception and for what reason; how bonuses and benefits were calculated; how information requests were answered; and what measures were taken when an unjustified difference was identified.
For Groups of Companies, an additional record is required of the source from which pay decisions are made.
Central management must know when it is creating a uniform policy and when it is leaving genuine, documented autonomy to the local employer.
Internal audits must be designed under legal supervision, without the erroneous—and, until now, widespread—assumption that every document produced within such an audit is automatically confidential or inaccessible in judicial proceedings.
The law on equal pay (Law 5316/2026) radically changes the manner in which pay differences will be examined.
Employees gain access to information, institutional support and more favourable evidentiary rules. Employers are required to prove not merely that they had a reason for the difference, but that the reason was objective, neutral and consistently applied.
Within groups of companies, corporate separateness is not sufficient where remuneration is determined from a single source.
Prevention therefore requires timely mapping of positions, decisions and evidence that may be required in the event of an inspection or claim. And, self-evidently, appropriate legal support.
Managing Partner
Koumentakis and Associates Law Firm