Reinforcing Collective Labour Bargaining in Greece | Law 5278/2026

Law 5278/2026 and the New Architecture of Sectoral Employment Regulation

The recent enactment of Law 5278/2026 marks a decisive shift in the structure and practical reach of collective labour regulation in Greece. Adopted in alignment with Directive (EU) 2022/2041 on adequate minimum wages and the promotion of collective bargaining, the reform forms part of a broader national action plan for the period 2026–2030 and signals a clear policy orientation toward strengthening institutional social dialogue and expanding sectoral coverage. For employers, investors, HR leaders, and trade unions, the new framework reshapes the legal landscape in which employment terms are negotiated, extended, and enforced. It also introduces compliance and strategic considerations that require careful legal navigation. This briefing outlines the core reforms and highlights their operational and advisory implications.

A New Institutional Role in Sectoral Bargaining

For the first time, the Hellenic General Confederation of Labour (G.S.E.E.) may participate as a co-signatory in sector-level collective labour agreements, provided it is invited by the competent employee organisation.

This development:

• strengthens the national coordination of sectoral bargaining,

• enhances the representativeness of agreements, and

• creates a mechanism that may accelerate their extension across entire economic sectors.

From a practical standpoint, the participation of a peak-level trade union body increases the legal and political weight of collective agreements and may influence negotiation dynamics, particularly in industries with fragmented representation.

Clearer Delimitation of Sectoral Scope

Collective agreements must now define their material scope with precision, including explicit reference to the relevant economic activity codes (KAD).

This requirement:

• reduces interpretative disputes,

• enhances legal certainty for employers operating in diversified business structures, and

• facilitates the administrative process for extending agreements.

For corporate groups and multinational employers, the classification of activities becomes a key compliance parameter.

Easier Extension to Entire Sectors

Lower representativeness threshold

The employee coverage requirement for extending a collective agreement to the entire sector has been reduced from 50% to 40%.

This change significantly increases the likelihood that sectoral agreements will acquire erga omnes effect, even where employer participation in the original negotiations was limited.

Extension without quantitative assessment

Where an agreement is signed by:

• G.S.E.E. and

• the most representative or national employers’ organisation,

the extension may occur without examining the numerical coverage threshold.

This creates a fast-track mechanism that can rapidly transform sectoral agreements into binding regulatory frameworks for all market participants.

Restoration of the Full Post-Expiry Effect

One of the most consequential reforms is the reinstatement of the full normative after-effect of collective agreements.

Under the new regime:

• All institutional and economic terms remain fully applicable for three months after expiry.

• Following that period, all normative provisions continue to bind the employer until replaced by a new collective or individual agreement.

This reverses the post-2012 model, under which only basic remuneration and limited allowances survived.

Coverage of newly hired employees

Employees recruited during the three-month statutory extension period are also covered by the expired agreement.

Advisory impact:
Employers must now treat expired agreements as continuing sources of binding employment terms, which affects:

• payroll planning,

• restructuring strategies,

• M&A due diligence,

• and workforce cost projections.

Trade Union and Employers’ Organisations Registries

The reform simplifies the registration data required in the respective national registries.

Importantly, failure to register no longer undermines the capacity to conclude collective agreements. The legal consequences are now limited to:

• the inability to request the extension of an agreement, and

• the inability to initiate mediation or arbitration.

This ensures continuity of collective bargaining while maintaining incentives for formal registration.

Mediation and Arbitration: Procedural Restructuring

The law introduces an admissibility review mechanism within O.ME.D. for unilateral recourse to mediation and arbitration, with a strict decision deadline.

At the same time:

• second-instance arbitration is abolished, and

• arbitral awards become directly subject to judicial review.

This reform is designed to:

• accelerate dispute resolution,

• enhance procedural predictability, and

• reinforce judicial oversight.

Strategic Implications for Businesses and Investors

The reform substantially increases the regulatory density of sectoral employment conditions and reduces the margin for unilateral deviation.

Key risk and planning areas include:

• labour cost forecasting,

• transaction structuring and due diligence,

• sector classification,

• collective bargaining strategy,

• HR compliance frameworks.

For international investors, the likelihood that sectoral agreements will be extended across the market makes early legal mapping of applicable employment regimes essential.

How Tsamichas Law Firm Supports Clients

As a firm with deep expertise in employment law, corporate structuring, M&A, energy and infrastructure projects, and cross-border investment, we advise:

• employers and employer associations,

• multinational groups entering the Greek market,

• private equity and venture capital funds,

• companies undergoing restructuring or transformation,

• trade unions and institutional stakeholders.

Our services include:

• collective bargaining strategy and negotiation support,

• extension risk assessment,

• employment cost modelling,

• due diligence in transactions,

• dispute resolution and O.ME.D. proceedings,

• regulatory compliance and restructuring planning.

A Structural Reform with Long-Term Market Impact

Law 5278/2026 is not a technical amendment but a structural recalibration of Greek collective labour law. It strengthens sectoral regulation, enhances legal continuity of employment terms, and increases the importance of coordinated bargaining at national level.

For businesses operating in Greece, proactive legal strategy is no longer optional, it is a core element of sustainable growth and regulatory certainty.