Court rules Softex dismissals illegal

Download article in original language : GR0306101NEL.DOC

In a judgment issued in late May 2003, a Greek court ruled the dismissals of many workers at Athenian Paper Mills SA (Softex) to be illegal, as redundancy legislation had not been observed. It stated that the workers are thus entitled to retroactive compensation for lost pay from the date they were made redundant in 2002 up to the date of the court ruling.

On 28 May 2003, the Drama Multimember Court of First Instance issued decision No. 84/2003, in which the dismissals of many workers employed at the Athenian Paper Mills SA (Softex) production unit and plant at Drama were judged to be illegal and unfair.

Of 417 former workers at the Drama plant who were made redundant on 23 August 2002 (GR0005170N and GR0304101N), 223 took their case to court. The Drama Court of First Instance accepted their class action against company management, which had maintained that neither the closure of the plant nor the shutdown of the production line in Drama constituted reasons for adhering to the procedure regarding collective redundancies provided for by employment legislation. More specifically, in management’s view the company chose to stop the operation of the unit in question as part of its right to take specific business decisions, claiming that the Drama plant was operating at a loss and would have driven the whole company into the red. For that reason, it terminated the employment contracts of the 417 workers employed by the company on open-ended contracts.

However, the Drama Court of First Instance ruled that the closure of the production unit in Drama did not mean that the company could terminate the contracts of the workers employed in that unit without abiding by the provisions of Law 1387/1983 regarding redundancies and Law 1264/1982 regarding the protection of trade union officials. This would be permissible only in cases where the unit concerned was an independent operation. However, according to the evidence placed before the court, this condition was not met.

Based on this rationale, the court ruled that the termination of the employment contracts was illegal and unfair. Its decision No. 84/2003 thus states that the 220 workers who lost their jobs and brought cases are entitled to retroactive compensation for the wages and salaries they lost from the date they were made redundant up to the date the court decision was issued.

This court decision is of particular importance, mainly because it coincides with a recent series of collective redundancies being carried out due to discontinuation of company activities, in particular the case of the German-based clothing firm, Schiesser Pallas, which has closed down its operations in Athens.

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