Presidential decree protects workers in case of their employer's insolvency

Download article in original language : GR9908149NEL.DOC

In July 1999, the Greek government issued a Presidential Decree aimed at bringing Greek law fully into line with EU law regarding the protection of employees in the event of the employer's insolvency.

Presidential Decree (PD) 151 concerning "regulation of matters for protection of workers in the event of employer insolvency, in accordance with Directive 80/987/EEC" was issued on 19 July 1999. The decree, aimed at bringing Greek legislation into harmony with European Community legislation, provides for the first time in Greece complete protection for workers in the event of the insolvency of their employer. In particular, Article 1 of PD 151 makes the following provisions:

  • the account kept at the Labour Force Employment Organisation (OAED) for the protection of workers against the insolvency of their employer will cover up to three months' unpaid remuneration for work performed under a contract or relationship of dependent employment for a period of six months;
  • the unpaid remuneration will be paid after the issuing of the decree declaring the employer to be bankrupt, or upon publication of liquidation decrees; and
  • a worker may exercise his or her right to receive unpaid remuneration from the special protection account by submitting a written application to the competent department of the OAED, within a maximum of six months from the time the bankruptcy or liquidation decrees are issued.

Apart from the three months' remuneration, the PD provides for coverage under insolvency protection of:

  • pension capital.
  • capital falling under a group programme with an insurance company or a private pension fund, which will be liquidated by the employer and the representatives of the workers and redistributed to the workers; and
  • capital falling under an account operating in the framework of the enterprise.

For implementation of this PD, an insolvent employer is defined in accordance with Article 44 of Law 2648/1998 on "tariff and tax regulations, modification of the tax procedure code and other provisions".

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