ArticlesWages due? (:The risks of the business)

January 5, 2020by Stavros Koumentakis

I. Preamble

The “I am not paying” movement first appeared in 2008. Originally as a refusal to pay tolls. Following: refusal to pay for public transport, property tax and solidarity levy …

Some claimed to be smarter than the rest of us, refusing to pay what was legally due. While the rest of us kept on paying …

This Movement blew over when some of those who drove its actions came to power. Even more so: when it turned out that the law applies not only to those who respect it, but to the “smart” ones as well.

What would the consequences be if a business decided to adopt the “I am not paying” logic with regard to the salaries of its employees? What are the consequences when a company chooses not to pay the salaries owed to one or more of its employees? Or when it truly is unable to pay them?


II. The employer’s obligations under the employment contract – especially the obligation to pay wages.

1. When an employer concludes an employment contract with an employee, they (the employer) undertake several obligations. Among them: protecting the life, health and personality of the employee.

2. One obligation, however, stands out as the principal among the others. That of the payment of the established under the law or, where appropriate, the agreed upon salary (article 648 of the Civil Code). It is the employer’s consideration for the employee’s work.

The employer’s obligation to pay the salary (whether it is the salary established under the law or the agreed upon salary) is complex. It includes the payment of the basic salary, as well as the payment of other, additional, wage benefits – e.g. of allowances.

Salaries are not considerations freely agreed-upon. A salary is the means an employee supports their and their family’s livelihood. It is precisely this function that imposes certain thresholds. Those thresholds are set by law or a collective agreement.

3. Specific legislative provisions aim at protecting wages and ensuring that they are paid. These include those relating to the claim by the employee of their (unpaid) salary – detailed below under III.

However, the provision of article 48 of Law 4488/2017 added another weapon to the arsenal that the employee has at the expense of their employer. Possibly disproportionately powerful. In particular, the provision of Article 636A has been added to the Code of Civil Procedure. It specifically provides the employee with the option of issuing a payment order for wages due.


III. The options of the employee in case their salary is not payed

If the employer fails to pay the salary due, the employee shall be entitled:

(a) To file a lawsuit. Requested: The wages due and even the relevant interest due, adding up from the date the salaries were due. Also: compensation for any damage suffered by the employee due to non-payment.

(b) To apply for interim measures. Requested: Provisional award of the salaries demanded (728 Code of Civil Procedure) and / or any other appropriate measures.

(c) To exercise the right stop providing their work. That is, to stop providing their work until the employer pays them the wages owed. By exercising this right, the employee renders the employer “defaulting” in accepting their work. This means, in practice, that as long as the employee refuses to provide his / her work (in the context of the above right), the employer continues to owe him / her his / her wages. As if the employee was working.

(d) Apply for a payment order in respect of wages due. This procedure is initiated, as mentioned above (under II.3) under the (new) provision of section 636A of the Code of Civil Procedure.


IV. Specifically: The issuance of a payment order for wages due to employees

1. In general

Of the above (under III) options given to employees, the most problematic and dangerous for the employer is the latter. In particular, the issuance of a payment order against them for wages owed. This is because through this process, the employee enjoys a number of important advantages. These advantages are related to the ease with which a payment order can be issued, as well as to the legal effects it brings. And these specific advantages are, at the same time, significant disadvantages for the employer …

2. The provision of Article 636A of the Code of Civil Procedure

According to Paragraph 1 of Article 636A of the Code of Civil Procedure: ‘… an order for payment of a remuneration may be requested, provided that the conclusion of the subordinate employment contract and the amount of the salary are proved by a public or private document or by an interim decision, which has been issued upon acknowledgment or acceptance of the application by the debtor, and if written notice has been served with a bailiff at least fifteen (15) days prior to the filing of the application. The work corresponding to the salary for which the order for payment is requested is presumed to have been provided. ”

3. The facilitation of the Employee and the problems for the business

The above (under 2) arrangement is beneficial for the employee and, at the same time, particularly problematic for the business. And this is because:

(a) The employee (very easily) acquires an enforceable title against the business for their wages due, by having a payment order issued. This takes very little time and comes at a very low cost. At the same time, with this specific order (: payment order), the employee may seek enforcement (e.g. seizure) at the expense of their employer. The fact that an employee can acquire an enforceable title so fast is why the payment order has such a significant advantage compared to a lawsuit for wages due.

(b) The employee has a lower burden of proof through this procedure. (This fact is also explicitly mentioned in the explanatory memorandum to Law 4488/2017-which introduced the provision of article 636A of the Code of Civil Procedure). The employee is required to prove in writing the conclusion of an employment contract and the amount of their salary. However, according to the explanatory memorandum to Law 4488/2017, the employee may use a wealth of evidence, such as “the printed extract from the employee’s personal account held in a governmental information system, such as the Labor Inspectorate, the Single Social Security Agency, the Independent Public Revenue Office or the offices of the Ministry of Finance, on the basis of information provided by the debtor employer or the public authority itself. ”

If the employee uses any of these documents, he / she obtains an important (even if it is disputable) presumption. Specifically, that they actually provided the work corresponding to the salaries claimed.

There is no doubt that in this way the employee’s burden of proof is facilitated in an absolute way. At the expense of the employer.

(c) The employee shall be empowered to move rapidly and efficiently at the expense of their employer’s property. The employee (making use of the provision of Article 724 of the Code of Civil Procedure), may take advantage of another opportunity offered, one of major importance. They have the right, through the process the payment order, to register a charge or a preventive attachment on their employer’s real estate. Most importantly: they have the right to impose a conservative seizure on any of the employer’s other assets. However, what is most dangerous for the employer is the potential for the conservative seizure of their bank accounts and deposits.

And all this, without requiring them to, at least, be served with the payment order. Such a “freeze” of the bank accounts of the business can only prove absolutely distressing and dangerous.


V. The formal requirement of the (earlier) out-of-court declaration of the employee and the vigilance of the employer

In order for the employee to obtain the payment order for wages due, the employee must notify the employer in writing. In particular, the employee must have served an out-of-court nuisance to his or her employer at least fifteen days prior to the filing of the request for the payment order. This formal requirement serves as a warning to the employer of the imminent issuance of the payment order, which may, within an extremely short time, bring about the extremely adverse consequences discussed above (IV).

Once such an out-of-court declaration has been served, the employer must act immediately. In particular, the employer must either immediately overcome their inability to pay the wages due or prepare for the intended opposition (and suspension of execution?) against the payment order – and not only that. Their defense will be the proof that the salaries claimed are not due (Article 636A §3 Code of Civil Procedure). But even in this case, the consequences of (possibly) freezing their bank accounts will likely still be there (and still be extremely distressing). Working directly with their legal representative seems necessary …


VI. In conclusion

The employer’s potential inability (or refusal – even if it is justified) to pay their employees’ wages triggers indefinitely strong forces. The provision of Article 636A of the Code of Civil Procedure may prove extremely harmful to the employer.

An employee who is or claims to be owed salaries is entitled to have a payment order issued. Then, without even giving it to their employer, the employee is entitled to make a conservative seizure of their employer’s bank accounts. It essentially blocks its operation completely. Either if the employer actually owes them money or the employee simply claims they owe it. Even if the employee is acting in bad faith.

The ability of the employee to have a payment order issued is an (extremely dangerous and disproportionately powerful) weapon in their hands.

The employer must be vigilant. Especially when they receive an out-of-court declaration from their employee for wages due. Even when they aren’t really due.

Rationales of the “I am not paying” nature, even if “I do not have to pay” can prove to be problematic in this case as well. And dangerous. Even for the operation and the very existence of the employer’s business.


Stavros Koumentakis
Senior Partner

P.S. A brief version of this article has been published in MAKEDONIA Newspaper (January 5th, 2020).

wages due in Makedonia newspaper

Stavros Koumentakis
Nikis Avenue & 1, Morgenthau st., 54622 Thessaloniki
(+30) 2310 27 80 84

Follow us:

Contact Us!

Copyright © Koumentakis Law 2023

Created by Infinity Web