The recent labor law (: law 5053/2023) incorporated the 2019/1152 Directive (“Transparent and predictable working conditions in the EU”) into the national legal order. Among the regulations of this law, which have raised particular debates and serious questions, is the one that concerns the trial period (art. 4) in case of entering into a dependent labor contract. Through this trial period, the employer intends to determine the skills and suitability of the employee, before committing through the definitive employment contract.
The Status before Law 5053/2023
Trial Employment Contract
Until today (and before the above law) transactional practice allowed the contracting parties to agree that the definitive employment contract of indefinite or definite duration would be drawn up after a successful trial of the employee.
The probationary contract could take the form of a fixed-term employment contract, in which case it would be automatically terminated at the end of that period. The employer would, in fact, be the one who would decide, after the trial period, whether or not to enter into a (new) definitive contract. Any termination of the employment contract before the expiration of the agreed certain time, would require a material reason (672 Civil Code). Unless the employer has reserved in their favor the right to terminate the contract freely and at any time – by observing the conditions for termination of the employment contract of indefinite duration.
The trial contract could also take the form of an indefinite term employment contract with clause (usually dilutive). The employer would be able to reserve in their favor a right on the basis of which, for a certain reasonable time from the beginning of the contract, it would have a trial character. During this reasonable time (and even before its expiration) it would be possible to terminate it without compensation. This if, “according to an objective and fair judgment” the employee was not found to be suitable for their work (1719/2012, NOMOS Legal Database).
As there was no specific legislation, the duration of the trial period in trial contracts could be determined by the individual employment contract. However, it should not exceed the reasonable time limit that would be necessary for the employer to assess (or not) the suitability of the employee they hired. This was required by the principles of good faith, so that the employee’s uncertainty regarding the finalization of the employment contract would not be maintained for a long time. Also, in order to avoid the circumvention of the provisions concerning the termination of the employment contract. The, case by case, reasonable (on the upper) limit was dependent on the type and nature of the work for which the recruitment is made. Besides, for the assessment of professional abilities, sometimes more time is required and sometimes (due to the nature of the work) the minimum (1719/2012, NOMOS Legal Database).
The “Trial Period” In the Case of the Contract of Indefinite Period
Based on the pre-existing regulation (article 74 §2 section a’ of Law 3863/2010, added by Art. 17 §5a of Law 3899/2010): “…employment under an employment contract of indefinite duration is considered as employment of a trial period for the first twelve (12) months from its effective date and which may be terminated without notice and without severance pay, unless otherwise agreed by the parties”. According to jurisprudence, this provision establishes a legal scheme. Specifically, it characterizes for the first time, legislatively, the aforementioned twelve-month waiting period as probationary employment. That is, a period during which the employer has the opportunity to ascertain the skills and suitability of the employee. In fact, in the event that they judge, in an objective and fair judgment, that they are not suitable for the position in which they were hired, the employer was entitled to terminate the contract, without warning and without payment of severance pay. In this case, however, the review of a complaint for the abuse of powers was not excluded (258/2019 Supreme Court, NOMOS Legal Database). It should be noted, however, that the aforementioned twelve-month duration has been criticized by the theory as contrary to the aforementioned Directive (:2019/1152).
The 2019/1152 Directive
As stated in the above Directive, every entry into the labor market or transition to a new position should not be subject to prolonged insecurity from the part of the employee. Therefore (and according to the European pillar of social rights), trial periods should have a reasonable duration (27). It sets, to this end (art. 8 §1), a maximum duration: “ Member States shall ensure that, where an employment relationship is subject to a probationary period as defined in national law or practice, that period shall not exceed six months.».
The New Regulation
For the integration of the aforementioned Directive, a special regulation was introduced (: art. 4 n. 5053/2023) (: art. 1A in Presidential Decree no. 80/2022) for the probationary period and the probationary employee. In fact, it concerns both open-ended and fixed-term contracts.
Regarding open-ended contracts: The employer has the possibility, when concluding an open-ended employment contract, to agree with the employee a trial period of up to six (6) months. During this period, the contract or the employment relationship is under test (art. 1A §1 Presidential Decree no. 80/2022).
Regarding fixed-term contracts: The trial period, in these cases, is proportional to the total time provided for in the contract. In any case, it cannot exceed ¼ of the total employment period – with a maximum of six months. In the event that the contract is renewed for the same position and with the same duties, provision for a new probationary period is not allowed (art. 1A §4 Presidential Decree no. 80/2022).
The Case Of The Successful Trial Period
But what will be considered as the starting time of the employment contract? In the event that the employer considers that the employee’s probationary service is successful and retains them in their company (after the end of the probationary period or even before it), the starting time of the contract is considered the initial date of employment of the employee. And this concerns all of their rights based on their employment (art. 1A §2 Presidential Decree no. 80/2022).
The Case Of The Unsuccessful Trial Period
Serious questions, however, arise in the event that, during or at the end of the probationary period, the employer determines that the employee’s probationary service has not been successful. In this case the contract under trial is “automatically terminated”. The time of (trial) employment is counted as work time for all the rights that were produced up to the point of its termination (art. 1A §3 Presidential Decree no. 80/2022). But what does ” self-justified solution” mean?
(a) It could, in one sense, be argued that after the trial period the employer chooses at their (unchallenged) discretion whether to terminate or continue the contract. And if during (and not at the end of) the probationary period, the employer rules that the probationary service of the employee has not been successful, how, if at all, will this ” self-justified” solution of the employment contract come about?
(b) In another sense “self-justified solution” could be argued to mean (contra to the letter of the law) termination of the employment contract – without the need to meet the formal conditions of the termination (given that for the first twelve months the provision for no notice and no compensation is still in force). This, however, means that it would be possible, in this case, to check the essential conditions of the complaint.
(c) According to a third, finally, point of view it could be argued that a heresy is established. Possibly: solvent. In case, therefore, of its payment, the contract will be automatically terminated for the future (1719/2012 Supreme Court). Alternatively: deferral under which the conclusion of the definitive contract takes place. However, in the case where we accept the existence of a heresy, the solution could not be uncontrolled: its fulfillment (or not) is controlled on the basis of good faith (207 Civil Code).
Extension Of The Trial Period
The new regulation, as mentioned above, also concerns the fate of the trial period in case of suspension of the employment contract: In the event that the employment relationship is suspended, for any reason, during the trial period, then the duration of the last period is extended accordingly. (: art. 1A §5 Presidential Decree no. 80/2022).
Application of Protective Provisions
During the trial period, all the protective provisions for the employee linked to their contract or employment relationship apply. In particular (i.e. indicatively), articles 162 to 179 and §1 of article 339 of Presidential Decree no. 80/2022.
Maintaining the Validity of the (Effectively) Twelve-Month “Trial Period”
The recent labor law (: law 5053/2023) attempted to regulate the trial period of the dependent labor contract. Unfortunately, however, they did not link this trial period with the conditions for terminating the indefinite-term employment contract.
It is recalled that by express regulation (: art. 325A Presidential Decree no. 80/2022-as added by article 19 of law 5053/2023), employment with an employment contract of indefinite duration for the first twelve months from the day of its validity (which, in this case, are not referred to as a probationary period) may be terminated without notice and without severance pay. Unless otherwise agreed by the parties.
In the event that the contracting parties agree on the trial period of article 1A, the time period of the trial period is counted in the time of the aforementioned twelve months.
The retention, however, of the twelve-month waiting period regarding the (non) obligation to pay compensation and give notice in the event of termination of the indefinite-term employment contract, raises concerns (it could be argued: unreasonable ones) regarding the compatibility of the national legal order with the above Directive.
The need to establish a trial period of a reasonable duration at the start of the dependent labor contract is a European reality. It also constitutes a reasonable business necessity. Under the current legislative conditions, a series of important problems are created, the resolution of which is not sought by the recent labor law. It is better not to extend the legal uncertainty that has been created nor to wait for the jurisprudence to deal with it: it is desirable that they be clarified legislatively (or in another, legally tolerable way).-
Stavros Koumentakis
Managing Partner
P.S. A brief version of this article has been published in MAKEDONIA Newspaper (December 10th, 2023).
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.