1. Introduction

On February 2026, Greece enacted Law 5278/2026 ambitiously proclaimed as the “National Social Agreement for the Strengthening of Collective Labour Agreements” (Government Gazette A’ 22/16.02.2026). The law appears to be the most extensive revision of the Greek collective bargaining procedure since the austerity measures adopted between 2010 and 2012.  From a legal standpoint, Law 5278/2026 represents a signal that Greek Labour Law is striving to return to a model of autonomous collective bargaining, consistent with ILO Conventions 87 and 98, the Revised European Social Charter and the EU Adequate Minimum Wages Directive (2022/2041), which itself requires Member States to promote collective bargaining coverage.

2. Background: From the 1990 framework to Memorandum-Era dismantling

2.1 The pre-crisis framework (Law 1876/1990)

For a series of years, Greek collective bargaining procedures in the private sector were governed by Law 1876/1990 providing for a hierarchical system, namely: (i) a national general collective agreement (EGSSE) setting minimum non-wage working conditions; (ii) national sectoral and occupational agreements; (iii) regional or local sectoral agreements; and (iv) company-level agreements. The favour principle was the structural assumption, hence lower-level agreements could only improve upon higher-level minimum provisions. Moreover, the Minister of Labour held the power to extend and declare as compulsory any sectoral collective agreement covering employers that employed at least 51% of the workforce in the relevant sector.

2.2 First Memorandum (Law 3845/2010)

Greece’s first bail-out program, implemented through Law 3845/2010, began a systematic deviation of the 1990 framework. The minimum wage was placed under State control, and wage increases were capped at euro-zone inflation levels. Furthermore, special enterprise-level agreements were introduced, allowing individual employers, even those bound by a sectoral agreement, to derogate downwards on wages as an exception, in case the company faced economic difficulties.

2.3 Second Memorandum II (Laws 4024/2011 and 4046/2012) and structural dismantling

Laws 4024/2011 and 4046/2012, implementing the second Memorandum, delivered the decisive breach to the pre-crisis status quo. In particular:

(a) Company-level agreements were granted primacy over sectoral and occupational agreements, reversing the favour principle.

(b) Law 4024/2011 suspended the extension mechanism indefinitely, effectively confining each sectoral agreement to employers who were formal members of the signatory employers’ organization.

(c) The period during which an expired collective agreement continued to apply as individual contractual terms (after-effects period) was limited to a strict three-month maximum. After the said period, only the basic wage and certain seniority supplements survived, and all other normative terms lapsed.

(d) The right of either contracting party to request binding arbitration was severely restricted, effectively removing the backstop mechanism that had encouraged parties to reach an agreement under the previous legislation.

(e) A nominal 22% reduction in the collectively agreed minimum wage (32% for workers under 25) was imposed by Act of the Ministerial Council in February 2012, overriding the EGSSE mechanism entirely.

The above measures were consistent with the doctrine of internal devaluation bound to make the Greek economy more competitive.

2.4 Post – Memorandum partial recovery (2017-2025)

The extension mechanism was partially re-instated by Articles 16 to 20 of Law 4472/2017. Afterwards, the favour principle at company level was restored by Article 55 of Law 4635/2019. Minimum wage-setting was returned to a joint determination process combining social partners’ input and government decision. However, the three-month cap on after-effects and the 51% threshold for extension remained in force, continuing to limit sectoral bargaining’s practical reach.

3. Provisions of significance introduced by Law 5278/2026

3.1 Restoration of full after-effects regime

Under the amended Article 403 of the unified Labour Code (PD 62/2025), upon expiry or lawful termination of a collective agreement, all normative terms continue to apply for a three-month transition period, including to workers hired during that period. Once the three-month period expires, all normative terms continue to bind the parties until expressly replaced by a new collective agreement or by individually negotiated terms with each affected employee.

This provision reverses the after-effects regime introduced by Memorandum II and removes the pressure on employees to eventually accept inferior individual terms upon expiry of a collective agreement, simply because no replacement agreement has been reached.

3.2 Reduction of the extension threshold to 40%

Law 5278/2026 lowers the sectoral coverage threshold required for ministerial extension from 51% to 40% of employees in the relevant sector.

3.3 Co-signature stakeholder role for GSEE in sectoral agreements

Under the amended Article 396 of the unified Labour Code (PD 62/2025), the General Confederation of Greek Workers (GSEE) is granted a subsidiary co-signature capacity for sectoral collective agreements, giving the country’s third-degree labour confederation a stake in sectoral bargaining, where sector-specific unions are weak or fragmented. For the avoidance of doubt, sectoral agreements must now contain, as a mandatory element, the relevant Statistical Business Activity Codes (ΚΑΔ) identifying the scope of the sector covered.

3.4 Streamlining of Trade Union and Employer Organization Registries

Law 5278/2026 simplifies registration requirements for both the General Registry of Trade Union Organizations (ΓΕ.ΜΗ.Σ.Ο.Ε.) and the General Registry of Employers’ Organizations (ΓΕ.ΜΗ.Ο.Ε.). The obligation to disclose financing details, which had raised concerns regarding both administrative burden and confidentiality, is abolished.

Non-registration or failure to maintain updated registry data no longer affects the general legal standing of a trade union or employers’ organization.

3.5 Reform of Mediation and Arbitration (OMED)

Law 5278/2026 introduces an institutional admissibility filter for unilateral requests to refer disputes to mediation or arbitration before the Organization for Mediation and Arbitration (OMED). A formal review of the procedural prerequisites for such unilateral referral is now obligatory before the process may proceed. Second-instance arbitration before OMED is abolished.