A Northern European technology company operating a Greek subsidiary discovered, shortly after a senior manager's dismissal, that the termination procedure had not followed the mandatory requirements of Greek employment legislation. The dismissed employee filed a claim challenging both the validity of the notice period and the calculation of severance. Without immediate legal intervention, the company faced the prospect of a prolonged court process and substantial financial exposure.
This case study examines how an employment dispute in Greece was handled from the moment the claim was filed through to resolution. Greek employment law imposes strict procedural requirements on dismissal notice and severance calculation, and non-compliance exposes employers to reinstatement orders or enhanced compensation awards. The matter was resolved within approximately eight months of the initial claim.
The following sections cover the client's situation, the legal strategy chosen, the key milestones encountered, and three transferable lessons for businesses managing similar cross-border employment matters.
Client profile and the challenge at hand
The client was a mid-sized technology group headquartered in Northern Europe, with a Greek subsidiary employing around forty staff. The subsidiary operated under a combination of individual employment contracts and a sector-specific collective agreement applicable to technology workers in Greece.
When the subsidiary's commercial direction shifted, the group decided to restructure its Greek operations. One senior manager – who had served for over six years – was dismissed. The local HR team issued a termination letter and paid what it calculated as the applicable severance. However, the team had relied on the general employment contract terms without accounting for the enhanced rights provided by the applicable collective agreement.
The former employee retained counsel and filed a claim before a Greek court of first instance within weeks of dismissal. The claim covered three elements: the adequacy of the dismissal notice period, the correct severance amount under collective agreement terms, and outstanding social security contributions allegedly owed at termination. The client contacted Ferraz & Whitmore after receiving notice of the proceedings. Time was pressing: the response deadline was under three weeks away.
For companies operating across jurisdictions, this pattern is a recurring risk. For a broader view of how Greek corporate structures interact with employment obligations, see our guidance on corporate law in Greece.
Legal strategy: rationale and execution
The core strategic question was whether to contest the claim in full, negotiate an early settlement, or pursue a hybrid approach. A full contest carried the risk of a lengthy first-instance process – typically running twelve to eighteen months in Greek labour courts – followed by potential appeal. An unconditional settlement, on the other hand, risked setting an adverse precedent for the remaining workforce.
The team assessed three factors before recommending a course of action.
First, the merits of the dismissal notice challenge. Under Greek employment legislation, the required notice period is directly linked to years of service. The client had applied a shorter period than the statute required for an employee with more than five years' continuous service. This element of the claim was well-founded.
Second, the collective agreement position. The applicable collective agreement provided enhanced severance multipliers for employees in senior technical roles. The client's HR team had calculated severance using the statutory baseline, unaware that the collective agreement applied. Courts in Greece consistently hold that collective agreement terms are incorporated automatically into individual employment contracts when the employer falls within the agreement's scope. This element also favoured the claimant.
Third, the social security contributions point. A review of payroll records showed that contributions had been correctly remitted throughout the employment relationship. The third head of claim was therefore unsupported by the facts and could be contested with confidence.
The recommended strategy was a structured negotiation on the first two heads of claim. accepting the underpayment in principle while disputing the precise quantum. combined with a firm litigation position on the social security element. This approach avoided a costly full trial while protecting the client from an inflated settlement.
For clients managing comparable matters in neighbouring markets, our team's work on employment law in Greece provides additional context on the procedural steps involved.
Key milestones and complications
The matter progressed through four distinct phases.
Phase one – immediate response (weeks one to three). The team filed a substantive defence within the deadline. The defence acknowledged the notice period shortfall in measured terms, presented a counter-calculation on severance quantum, and challenged the social security head of claim with supporting payroll documentation. The tone was deliberately conciliatory on the admitted issues to facilitate early settlement discussions.
Phase two – mediation attempt (months two and three). Greek civil procedure encourages pre-trial mediation in employment disputes. Both parties agreed to a single mediation session. The session did not produce a final agreement, but it narrowed the gap significantly on the severance quantum. The claimant's counsel abandoned the social security head of claim at this stage, as the payroll records were conclusive.
Phase three – complications arising (months four and five). A complication emerged during document exchange. The client's subsidiary had amended the manager's employment contract eighteen months before dismissal. The amendment had introduced a discretionary bonus clause. The former employee argued that the bonus should be included in the base salary calculation for severance purposes. Under Greek employment legislation, courts examine the regularity and consistency of bonus payments to determine whether they have become a contractual entitlement. The bonus had been paid in each of the preceding three years without qualification. This created a genuine risk that the court would treat it as a fixed component of remuneration – which would have materially increased the severance figure.
The team advised the client to address this risk in settlement rather than litigate it, given the consistent payment history. A settlement figure was proposed that incorporated a partial bonus element, calculated conservatively.
Phase four – settlement and closure (months six to eight). The parties reached a written settlement agreement. The client paid the agreed sum, which covered the corrected notice period differential, the collective agreement severance adjustment, and a partial bonus component. The agreement included a full release of all employment-related claims. The matter was closed approximately eight months after the initial claim was filed. A related employment matter in a civil law jurisdiction is examined in our case study on employment dispute resolution in Portugal.
Three transferable lessons
Lesson one: collective agreements must be identified before, not after, a dismissal. Many international employers assume that the individual employment contract governs the termination entirely. In Greece, collective agreements in force within a sector bind all employers that fall within their scope – regardless of whether the employer is a signatory. Identifying the applicable collective agreement at the outset of any employment relationship, and rechecking its current terms before any termination procedure begins, is an essential step that the client's HR team had not taken. The cost of this omission was a materially higher severance liability than the statutory minimum.
Lesson two: bonus payment patterns create contractual risk. A payment described in a contract as discretionary can lose that character if it is paid consistently and unconditionally over several years. Greek courts look at conduct, not just contract wording. Employers wishing to preserve the discretionary nature of bonus payments should document each payment with explicit, contemporaneous reservation of discretion. Where that documentation is absent, a settlement strategy that partially accepts the bonus claim is generally preferable to the litigation risk.
Lesson three: early legal engagement limits total exposure. The client's delay in obtaining specialist counsel – even a gap of two to three weeks after receiving the dismissal challenge – narrowed the available strategic options. In employment disputes governed by Greek employment legislation, the period immediately after a claim is filed is the most productive window for settlement. Courts in Greece are generally receptive to early resolution in labour matters. Engaging a lawyer in Greece with cross-border employment experience at the moment a dispute signal appears – not after formal proceedings begin – preserves the full range of procedural and negotiation options. As a law firm in Greece with experience in cross-border employment matters, Ferraz & Whitmore structures engagement to begin at the earliest viable point.
To discuss how Greek employment law applies to your workforce situation, contact us at info@ferrazwhitmore.com.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our employment law practice covers workforce restructuring, collective agreement compliance, dismissal procedures, and cross-border employment disputes across European and international markets. Our attorneys have advised on employment and corporate matters across both civil law and common law systems, including before Greek courts and in matters governed by EU employment directives. The firm's Lisbon base provides direct access to Portuguese and EU regulatory regimes, while our common law expertise supports enforcement and negotiation strategies in English-speaking jurisdictions. We work with international businesses, institutional investors, and in-house legal teams who need results-oriented counsel across multiple legal systems. To explore legal options for your employment matter in Greece, schedule a consultation at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.