Court rules in favour of harmonisation of white- and blue-collar severance pay

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In September 2004, a Greek court ruled that current legislation that draws a distinction between white- and blue-collar workers with regard to the amount of their severance pay is contrary to the Greek Constitution and therefore invalid. Harmonisation of severance pay for the two groups of employees is a long-standing demand of the Greek General Confederation of Labour (GSEE).

In September 2004, the Athens single-judge court of first instance issued judgment No. 1668/2004, ruling invalid the legislative provision that draws a distinction between white- and blue-collar workers as regards the amount of compensation they receive in the event of termination of their employment contract by the employer without notification.

The proceedings in question were brought by workers dismissed by Schiesser-Pallas in May-June 2003 when the clothing company closed its operations in Greece and moved them to other Balkan countries (GR0306105F). The Athens court deemed that the clause of Law 2112/1920 'regarding mandatory employment contracts for private employees' that provides lower compensation for dismissal without notice for blue-collar workers than for white-collar workers, is unconstitutional. The court determined that this clause is contrary to the provisions of the Constitution's Article 4.1 on equality and Article 22.1 on employment rights, and is therefore invalid.

Of particular importance is the court’s statement that compensation for termination without notice of an employment contract constitutes a 'welfare measure' aimed at providing workers with a means of subsistence when they suddenly lose their jobs, and for that reason it must be implemented for all workers without discrimination. In its decision, the court awarded the blue-collar workers the difference between the compensation that they received and that which would have been paid to white-collar workers.

This decision is not automatically applicable to all workers, but constitutes a precedent that is expected to motivate other blue-collar workers who have been made redundant to initiate legal proceedings. The Schiesser-Pallas company trade union considers 'these decisions to be a breakthrough on the question of worker equality, creating a new climate in labour relations'.

The Greek General Confederation of Labour (GSEE) stresses that 'the distinction between white-collar and blue-collar workers must be eliminated because there is no longer any labour which is purely intellectual or purely manual'. In GSEE’s view, such discrimination damages those who, precisely because of their less advantageous working conditions, should receive more favourable treatment in areas such as the amount of compensation in the event of termination of an employment contract. GSEE underlines the importance of this decision, and states that its demand for higher severance pay for blue-collar workers has now become established case law.

In recent years, National General Collective Agreements (EGSSE)s have narrowed the gap between dismissal compensation for blue- and white-collar workers. In the 2004-5 EGSEE, signed in May 2004, GSEE achieved a small increase in blue-collar workers’ severance pay (GR0409102F), though it still lags substantially behind that for white-collar workers. The GSEE executive, bolstered by the Athens court’s decision, is expected to take initiatives directed towards employers' organisations as well as towards the government, calling for legislative regulation of this question in the near future.