What Severance Pay Rules Must Employers Follow in Greece?

Which Employees Qualify for Severance Pay?

• Employees working under an open-ended (indefinite-term) employment contract who are dismissed without serious misconduct generally qualify for statutory severance.
• White-collar employees with at least 12 months of continuous service typically gain statutory severance rights on termination by the employer.
• Blue-collar workers may be entitled to severance or special termination compensation according to sectoral collective agreements and long-standing practice.
• Employees must usually be terminated by the employer (not resigning or mutually agreeing to end the contract) to claim statutory severance.
• Severance is not normally owed where the employee is lawfully dismissed for serious misconduct that justifies immediate termination.
• Additional or enhanced severance may apply if a collective agreement, company policy, or individual contract promises more generous terms.

What Are the Legal Timelines for Paying Severance?

In Greece, statutory severance is generally due at the time of termination and should be paid in a lump sum when the employment relationship ends. Where notice is given and the employee works through the notice period, you should settle severance on the last working day. If you choose to terminate without notice, you normally pay the higher “no-notice” severance immediately upon dismissal. Delaying payment can expose your company to legal claims, default interest, and enforcement measures. In practice, many employers align severance payment with the final payroll cycle but still ensure it does not go beyond the legal termination date.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Greece, you risk both administrative and civil consequences. Employees can challenge the termination, claim unpaid amounts, and seek court intervention, which can quickly become costly. Authorities may also impose fines for non-compliance with labour law and payroll obligations.

• Courts can order payment of outstanding severance plus legal interest.
• Employees may seek additional damages or claim that the dismissal is invalid.
• Labour inspectors can impose administrative fines for breaches of employment law.
• Non-compliance can trigger audits of your wider payroll and HR practices.
• Reputational damage may affect future hiring and relations with unions or works councils.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (EOR) such as the service described at https://www.playroll.com/employer-of-record does not remove the need to follow Greek severance rules. In a compliant EOR setup, the EOR is the legal employer in Greece and is responsible for calculating and paying statutory severance. However, your company typically bears the economic cost through your service agreement with the EOR, including any enhanced severance you choose to offer. You should still understand Greek rules so you can budget correctly, approve lawful termination strategies, and avoid instructing the EOR to act in a way that breaches local law.

Be 100 Percent Compliant in Offering Severance with Playroll

Managing Greek severance rules on your own means tracking service thresholds, salary caps, and the different formulas that apply when you give notice versus paying in lieu. Your team must also align severance with collective agreements, ensure proper documentation of the termination reason, and keep evidence that payments were made on time. Any misstep can lead to disputes, inspections, or reputational damage.

With Playroll, you can offload this complexity to a team that lives and breathes local compliance. We help you structure terminations, model severance costs in advance, and coordinate with in-country experts so payments, notices, and filings are all aligned with Greek law. That way, your managers can focus on performance and workforce planning, while Playroll keeps your severance practices defensible and audit-ready.