Court abolishes ceiling on lump-sum payments for retiring bank employees

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In March 2000, the Athens Administrative Court of Appeal ruled unconstitutional a legislative provision which sets a ceiling on the lump-sum benefit paid to retiring employees covered by special insurance funds in the Greek banking sector. The ruling is regarded as a victory for the OTOE bank employees' union.

In Decision No. 585/2000, the Athens Administrative Court of Appeal ruled, for the first time, that Article 57 of Law 2084/1992 is unconstitutional. This provision sets a ceiling of GRD 10 million for bank employees with 35 years of service on the lump-sum payment made to retiring employees covered by special insurance funds at the National Bank of Greece, the Bank of Greece, the National Mortgage Bank of Greece, the Agricultural Bank of Greece, the Hellenic Industrial Development Bank, the Ionian Bank, the Commercial Bank, the Hellenic Telecommunications Organisation (OTE) and the Ethniki Insurance Company.

In the case in question, the Court repealed a decision by the Agricultural Bank Pension Fund which had granted a reduced lump sum to its retiring personnel manager. In particular, the Court accepted the evidence and arguments put forward by the legal advisor of the Greek Federation of Bank Employee Union s (OTOE). As grounds for its judgment, the Court stated, inter alia, that Law 2084/1992 discriminates against those employees whose lump-sum monetary benefit would, due to long years of employment or high salaries, exceed the amount provided for in Law 2084/1992. Although such retirees have made larger contributions to the pension funds, they are expected to accept the same lump sum as their colleagues with fewer years of employment, lower salaries and fewer contributions.

In its decision, the Court finds OTOE to be in the right. Strongly opposed to the passage of Law 2084/1992 at the time of its adoption, OTOE later put forward detailed arguments that this law affects the finances of the banking sector insurance funds at their core. If the Council of State does not reverse the Court's decision, thousands of pensioners under the special funds of the banks and other bodies are expected to initiate legal proceedings to demand higher lump sums than those determined by law.

In a press release issued on 28 March 2000, OTOE calls on the Ministry of Labour and Social Security and the management of the banks which preside over the special banking insurance funds to proceed as quickly as possible to abolish the ceiling on lump-sum payments.

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