COVID-19 and Employment contracts

Human resources in times of crisis

In many countries, labour laws usually protect employees. In this period of crisis, different kinds of problems arise: some companies face an obligation to stop or reduce their activity, while others need to carry on (or even produce more) in a complex sanitary framework.

How should an employer react when employees cannot go to the office (for sanitary or childcare reason)? Can an employer stop paying an employee if there is a diminution of work? Are there restrictions to redundancy plans during the crisis ?

Our experts give an overview of the financial support measures provided by the governments during the pandemic and of those restricting the possibility to terminate employment contracts.

They also present the leverages offered to employers to adapt working conditions during the emergency period.

Check out the FAQs of the country of your interest and get in touch with our experts for more information.

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Australia

How to deal with a reduction of business during COVID-19 pandemic? Can I impose a reduction of working time to my employees?

Businesses in Australia may be able to stand employees down during the coronavirus pandemic and government restrictions being in place. It may be necessary to do so where:

  • Government restrictions require the closure of the business;
  • a large proportion of the workforce is in self-quarantine;
  • work cannot be performed due to lack of suppliers; or
  • where permitted under temporary amendments to employment legislation.

Businesses may also consult with their workforce to implement more flexible work arrangements during the crisis, including reducing hours or increasing hours.

The Australian Federal Government has introduced a number of measures to support business and keep people employed. Two key measures introduced by the Government are the JobKeeper Subsidy and the Cash Flow Boost for Employers.

JobKeeper Subsidy

The Australian Federal Government has committed $130 billion in ongoing support to business through the JobKeeper subsidy. The payment is available to businesses that are suffering a reduction in turnover to keep Australians employed during the outbreak. The JobKeeper subsidy is a gross fortnightly payment of $1,500 for each eligible employee for a 6-month period from 30 March 2020. The full $1,500 payment is to be paid to each eligible employee, either as a partial subsidy if their wage is greater than $1,500, or as a full subsidy if their wage was previously less than $1,500. The gross payment will be taxed at normal rates, although employers are not obliged to make additional superannuation contributions.

The scheme includes sole traders as well as businesses and not-for-profits (NFP).

Boosting Cash Flow for Employers

Small and medium businesses, as well as NFP are eligible for cashflow boosts to further assist in retaining employees. Tax-free cash flow boosts of $20,000 to $100,000 will be delivered to eligible businesses and organisations with aggregated annual turnover under $50 million. In a series of two payments, each payment will be equivalent to the business’ withheld salary and wages, with a minimum of $10,000 and maximum of $50,000. The first cashflow boost is set to be available between March and July 2020; the second boost will be made to businesses who received the first and will be of an equal sum, to be paid between June to September 2020. By splitting the support into two equal payments, the intention is to provide continued cash flow support over a longer period – increasing confidence and assisting businesses to maintain their operations.

What if I had just hired someone? Can I take my employment offer back?

If a business has offered employment but that offer has not been accepted by the applicant, then the offer can be rescinded at any time before the offer is accepted.

Once the offer has been accepted then the business will need to follow the terms of the employment contract and/or award (as the case may be) if they wish to terminate the employment relationship.

Can I impose my employees to take their remaining days of paid leave?

A business that has given an employee notice of termination of employment cannot force the employee to take paid leave in lieu of their notice period. Employees will be entitled to redundancy entitlements in accordance with their contract or award, as the case may be, which will include notice, redundancy entitlements, and accrued entitlements.

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children?

Employers and employees are being encouraged to work together to agree flexible work arrangements. If an employee asks for flexible working arrangements the employer can only refuse if they have reasonable grounds for doing so.

Full-time and part-time Employees are entitled to paid (e.g. full-time employees are entitled to 10 days paid sick and carers leave per annum and as accrued) and unpaid carers leave. Employees can access their paid sick and carers leave to care for an immediate family member, which includes a child. Once an employee has exhausted their accrued paid carer’s leave entitlements the employee and employer could agree for the employee to use other accrued entitlements (e.g. annual leave or long service leave). Temporary measures have been introduced in a number of awards to enable employees to access up to two (2) weeks unpaid carers leave.

Australian employment law would protect an employee whose employment is terminated because they are unable to attend work due to the need to care for children during the covid-19 pandemic.

What should I do if there is still some business to do? How can I anticipate the end of the lock-down?

Businesses are required to have employees work from home where possible. If working from home is not possible, then businesses must ensure that their workplaces and employees comply with social distancing and hygiene measures required by the government.

The Australian Government will give notice when certain restrictions have been lifted or eased. For example non-essential retail stores were permitted to resume trade from 2 May 2020.

Do I have the right to terminate contracts in this period?

A business can terminate an employee’s employment during the pandemic so long as they follow the proper contractual and legislative process for doing so, including but not limited to giving proper notice, payment of redundancy entitlements (if applicable), and payment of other accrued entitlements.

Protections against unfair dismissal and discrimination continue to apply during the covid-19 pandemic.

Brazil

How to deal with a reduction of business during the COVID-19 pandemic?

On an introductory note, Brazilian Congress approved a legislative decree that recognizes the state of public calamity in the country until Dec. 31, 2020. As a consequence, protection measures of formal jobs were announced, including, among others, remote work; anticipation of individual paid vacations; mandatory vacation leave; intensification of the compensatory time off; proportional reduction of wages and working hours; and anticipation of non-religious holidays. The government also authorized the reduction of working hours and wages, in return for the maintenance of jobs, and will pay aid to offset the cut while keeping the workload reduced.

In accordance with Provisional Measure 936, employees and employers can agree on (i) proportional reduction of wages and working hours, and (ii) temporary suspension of the employment contract. Both measures must be agreed upon and may be imposed, although there are critics of the employee’s ability to refuse. Unions do not need to participate in these agreements if the employee receives a monthly salary of up to R$3,135.00 or above R$12,202.12 and holds a higher education diploma.

The proportional reduction of wages and working hours may be agreed for up to 90 days, provided that the percentages of 25%, 50% or 75% are used both for wages and for working hours. Other percentages can only be adjusted through collective bargaining.

The temporary contract suspension, on the other hand, must have a maximum term of 60 days, which may be divided into two periods of 30 days. Companies that had an annual turnover over R$4,8 million in 2019 must pay a monthly compensatory allowance of 30% of the employee’s salary.

In both cases, in order to offset part of the wage loss, the employee may be entitled to the emergency employment and income benefit paid by the government, in case the respective requirements are met.

What if I had just hired someone? Can I take my employment offer back?

If a company has offered employment but that offer has not been accepted by the applicant, then the offer can be rescinded at any time. On the other hand, if the offer has been accepted, then the employer would need to follow usual termination procedures. There is no specific rule for COVID-19 pandemic.

Can I impose my employees to take their remaining vacation days?

According to Provisional Measure 927, during the state of public calamity companies can anticipate the employee’s vacation period, upon granting a 48-hour prior notice. The vacation period cannot be shorter than 5 calendar days and may be granted even though the acquisition period has not yet elapsed (in Brazil, employees are usually intitled to 30 vacation days acquired after a 12-month work period).

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children?

There are no specific benefits for employees that cannot go to work/provide work from home because of their children. For these situations both proportional reduction of wages and working hours or contract temporary suspension may be used.

What should I do if there is still some business to do? How can I anticipate the end of the lockdown?

Companies can operate if they carry out activities included among those defined as essentials. Each municipality and state have their own roll of essential activities, which differ from the federal enumeration. Therefore, companies that operate nationwide must comply with all these regulations.

The Social Service of Industry (“SESI”) launched a guide for the prevention of COVID-19 in companies. The manual, produced by occupational physicians and infectious disease specialists at SESI, aims to help companies combat the spread of the disease in the workplace. This guidance is available in Portuguese, English and Spanish and can be found here.

Do I have the right to terminate contracts in this period?

There is job security for the employee during the proportional reduction of wages/working hours and the temporary contract suspension, for the same time period after reestablishment of the previous work conditions. Violation of this guarantee subjects the employer to indemnify the employee in addition to severance payment.

In other cases, termination of employment contracts is allowed and all regular severance payments and procedures must be followed.

Canada

How should companies deal with a reduction in business during the COVID-19 pandemic?

Given the current COVID-19 pandemic, many employers have been forced to make difficult decisions regarding their businesses in order to cut costs and maintain viability, including laying off employees or reducing hours/salary.

Each Canadian jurisdiction has its own specific rules regarding temporarily laying off employees, as employment standards are generally provincially regulated (with the exception of federal undertakings).

Generally speaking, in Canada, under common law, there is no inherent right to temporarily layoff an employee absent a contractual term, agreement, industry standard, or past practice. Businesses that unilaterally lay off employees, or impose a significant reduction in compensation or hours on employees, may risk facing “constructive dismissal” claims.

However, it appears that not many such claims are currently being advanced – likely due to the courts mostly being closed except for urgent matters, and because many employees are taking a “wait and see” approach and may prefer to return to their positions rather than receive a package during these uncertain times.

The manner in which businesses deal with a reduction in business will depend on the circumstances in each case and specific business needs. However, all businesses should consider whether they, or their employees, are eligible for the various government assistance programs that have been announced (e.g., Canada Emergency Wage Subsidy, Canada Emergency Business Account, Canada Emergency Commercial Rent Assistance, Canada Emergency Response Benefit, etc), and whether utilizing the programs may reduce potential legal liability and/or assist them through this difficult period.

For detailed information on the various government programs available to individuals and businesses, please click here.

What if I had just hired an employee? Is it possible to rescind the offer of employment or dismiss the employee?

Potential liability relating to rescinding an offer (prior to the employee commencing work) or terminating an employee within a few weeks of starting will depend on the specific circumstances in each case. Generally speaking, an offer of employment can be rescinded before it is accepted but, once an offer is accepted, the employee may be entitled to certain termination entitlements.

It is crucial that employers have enforceable written employment contracts for all employees that outline the terms and conditions of employment. Of particular importance to employers is that the termination clause be valid and enforceable. There have been many changes in this area of law in the past couple years and it is strongly recommended that employers seek legal advice on this topic.

Employers should generally ensure that probationary clauses are included in their written employment contract, and that termination provisions limit employee entitlements to the minimum required by the applicable employment standards legislation.

Recent case law has found that employers cannot rely on probationary clauses if employment is terminated prior to the employment relationship commencing. In such cases, the other termination provisions will apply. If termination provisions are invalid/illegal (or there are no termination provisions), employees will generally be entitled to common law reasonable notice, which is based on years of service, age, position, and the availability of similar employment. It is important to note that, unlike common law provinces, in Quebec, employers cannot contract out of reasonable notice even with an employment agreement.

Importantly, any termination of employment or rescinded offer cannot be due to the fact that an employee may have COVID-19, be in self-isolation, or have to care for elderly parents or young children, etc. This could engage a violation of the applicable human rights legislation, as well as be contrary to certain recently enacted COVID-19 job-protected leaves of absence.

Can I require that employees take their remaining vacation days?

Given that each jurisdiction has its own employment standards legislation, the answer to this question will vary. In most jurisdictions, employers have discretion regarding the timing of employees’ vacations. For example, in Ontario, Canada’s most populous province, among the only restrictions for employers are that vacation time be taken within 10 months of being earned in the vacation entitlement year, and that vacation be taken in blocks of weeks (unless the employee requests vacation in short periods).

How should companies deal with employees that cannot attend at work/work from home because they have childcare obligations?

Each jurisdiction will be opening its childcare centres and schools at different times (if at all this academic year). Employers should check to see whether childcare centres and schools are open in the particular jurisdiction in which they operate.

Each of Canada’s jurisdictions have their own rules regarding human rights, family responsibility leave, etc. Generally speaking, employees cannot be discriminated against due to their family status and employees who are unable to attend work/work from home must be accommodated up to the point of “undue hardship” (business inconvenience does not meet this threshold). The manner of accommodating an employee will depend on the specific facts and circumstances.

Employers are generally not obligated to provide paid leave unless the specific jurisdiction has paid leave provisions for family responsibility leave or paid leave is provided in the employment contract, etc.

Both employers and employees may wish to consider how employees can continue to receive money while on leave due to childcare obligations or due to medical issues concerning COVID-19 etc (see the details regarding the CERB, CEWS, EI, etc outlined in question 1). Employees who are off work due to caring for a child due to school closures etc related to COVID-19 should be able to qualify for the $2,000 CERB payment from the government.

What should I do if there is still some business to be done? How can I anticipate the end of the lockdown?

Each jurisdiction has been providing near daily briefings regarding the status of COVID-19. Many jurisdictions have now announced plans to gradually re-open the economy. Employers are encouraged to closely follow the updates in their specific jurisdiction.

Work from home continues to be permitted and it is expected that businesses will open gradually and in segments, with remote work continuing to be prevalent for the foreseeable future. As such, employers should look into work from home arrangements, if they haven’t already, and put in place policies regarding working remotely.

If businesses only require certain employees to work during the lockdown, assuming they are permitted to remain open by law, they may reach agreements with the needed employees to work reduced hours and/or receive reduced compensation etc. In this regard, the CEWS program outlined in question 1 may be particularly beneficial. Alternatively, if employees earn less than $1,000 per month to do minimal work, they may also still be entitled to receive the CERB (see question 1).

If and when employees are permitted to return to the workplace, and in fact do so, it is important for employers to ensure they are following the strict guidelines regarding social distancing and other health measures, and that they follow all recommendations and orders from the different levels of government and public health officials. Cleaning and sanitation practices should also be increased to reduce the spread of COVID-19 as much as possible.

Do I have the right to terminate employment relationships during this period?

Yes. Employers continue to be able to terminate employment contracts for any legal reason. In other words, employees’ employment cannot be terminated due to discriminatory reasons (or reasons related to job-protected COVID-19 leave in certain jurisdictions), including the fact that an employee must stay at home to take care of children or is ill with COVID-19 etc. Such illegal terminations may result in additional liability above and beyond the potential liability relating to the termination of employment.

As previously mentioned, in the absence of an enforceable termination clause in a written employment agreement, employees are entitled to common law reasonable notice – which is generally far greater than the entitlements provided for under applicable employment standards legislation. Employers are often surprised to learn that there is also no inherent probationary period – such a period must generally be specifically provided for in the employment agreement.

It is important to note that it is not possible to contract out of common law reasonable notice in Quebec (even with an employment agreement). In certain circumstances, employees also have recourse to non-civil remedies (e.g., In Quebec, after two years of employment, certain employees cannot be let go without “good and sufficient reason” – this is decided by a tribunal and the employee receives legal representation).

For the time being, employers may wish to utilize the various programs outlined in question 1 until they have a better sense of business needs going forward. If an employer determines they will be proceeding with a termination of employment, it is strongly encouraged to seek legal advice so that they are fully apprised of potential liability and manners in which risk may be minimized.

Czech Republic

How to deal with a reduction of business during COVID-19 pandemic? How can I save on wage expenses? Is there any help from the state?

The employers can consider one of the following options:

a) To analyse the legality of the employment “contract”

Not all people “working” for employers have an employment contract for an indefinite period of time. Some of them might be business entrepreneurs (freelancers), some might have employment contracts for specific period of time, some might be in a trial period, and some might have agreements for works performed outside of an employment relationship. With all these aforementioned groups, it is easier to terminate the relationship.

b) Support employees to use the opportunity to stay at home with children

The state has closed schools since 11th March 2020, and shall pay employees who stay at home with their children (nursing) until the end of June. In light of this, it highly recommended for employers to support their employees in utilizing this opportunity and stay at home with their children. In such a case, employees are paid by the state and not by the employer.

c) Direct employees to take their remaining days of paid leave

The employer is the one who decides when employees take their paid leave. Nevertheless, it has some conditions- the leave must be assigned 14 days in advance, and the employer must take into account the employer’s operational conditions and individual employees’ justified interests. It is obviously possible to assign part of the paid leave, but it might be disputable to assign the entire paid leave in this way.

d) Change the work schedule

The employer can implement changes in work schedule to put lesser number of shifts during critical months (May, June), and on the other hand impose more shifts during later months like August etc.

e) Use temporary layoffs and apply for the state contribution

If the employer does not have any work for the employees, or has only limited work, they can ask employee to stay at home and pay them between 60 % to 100 % of the wage compensation based on the reason. In such cases it is possible to apply for state contribution from the Antivirus program; according to which the state pays 80% of wage expenses to employers who were forced to temporarily close down due to the state measures, and 60% of the wage expenses to employers who had partial unemployment due to the economic reasons, typically lessening of the demand.

What if I had just hired someone? Can I take my employment offer back?

If only an offer was made, but employment contract was not signed, the employment contract is not valid and the employer can take it back. The employer can be found responsible to pay remedies to the employee in such a case, but the provisions about the pre-contractual responsibility under Czech law very new and we consider it very likely that the remedy in such cases will be low.

On the other hand, if an employment contract was signed, then the employer is bound to it. Nevertheless, most employment contracts contain a clause for a 3 month trial period, during which the employment contract may be terminated by any contractual party without reason. The employer can use this option to terminate the employment contract in trial period without stating a reason.

How to deal with employees that cannot go to work/ work from home because they have to take care of their children? Are they allowed to stay at home? Is the employer obliged to continue payment of wages?

During the period from 11th March until the end of June, employees that are required to take care of their children are allowed to stay at home and care for their children. In such cases, employees are paid from the social security system and not by the employer (nursing). But during this time, the employees are not supposed to work from home for the employer.

If the employer needs the employee to work from home during this period, they can agree with the employee on working from home (home office). In such a situation the wage is paid by the employer.

Unfortunately, the combination of state contribution and home office is not possible. The employee can be either in the first or in the second regime. If the employer needs only a small part of the work to be performed by the employee, they can leave the employee in the social security system (nursing) and, either rely on the goodwill of the employee or try to motivate the employee somehow financially, e.g. bonuses. This approach may be controversial from the Labour Law perspective, but it is widely used in the practice.

What should I do if there is still some business to do? How can I anticipate the end of the lockdown?

During the lockdown, and most likely also afterwards, working from home will be prioritized.

Companies have been strongly encouraged to implement work from home as much as possible.

When work from home is not possible, the employer has a duty to organize the workplace in a way to minimize the risk of employees from getting sick at work.

This means that the organization of production and work shall be adapted to these new requirements. We can give you following tips- organization of the office/production line respecting social distancing, provision of soap and/or hydro-alcoholic solution to employees, regularly disinfecting the workplace, avoid crowded offices through various means (modification of the working hours, part employees to work from home etc.), splitting the workforce into two groups, so that if there is an employee infected with COVID-19 and their coworkers are quarantined, only one group (half of the team) will be in quarantine, implement the use of veils, reduce the personal meetings and prefer the online communication, set rules for personal meetings, reduce business trips, set conditions for third parties to visit the workplace (in case it is needed), random temperature measurements of the people coming into the workplace, provide protective equipment (respirators, gloves) to the employees in high risk jobs etc.

These new means and organizational rules should be registered. Where there are staff representatives, they shall be required to follow these rules, as well as the occupational doctor in charge of the company.

Do I have the right to terminate contracts in this period?

Yes, it is the same as in any other time. But we have to point out that the Czech law allows to terminate the employment contract only from the reasons given by the Labour Code.

France

How to deal with a reduction of business during COVID-19 pandemic ? Can I impose a reduction of working time to my employees ?

Downtiming can be used by companies who face a drecrease of activity or if they cannot organize the activity in a way to prevent contacts (either by working from home or by organizing social distancing in the workplace).

An authorization shall be requested online : https://activitepartielle.emploi.gouv.fr/aparts/

Foreign companies without a permanent establishment in France can now benefit from this system, provided that their employees work under a contract subject to French law and they pay social contributions in France.

The deadline to file a request to cover the period since mid-March is the 30th of April. Otherwise, it shall be filed within the month of starting downtiming. Without any refusal from the State within 48 hours, the authorization is granted.

It allows the employer to pay 70% of the average gross remuneration for each hour which has not been performed due to the reduction of activity, and to be reimbursed of this amount by the State.

Reduced contributions apply to this sum, which means that employees receive around 84% of their average net remuneration.

If the company has staff representatives, the latter shall be consulted on the implementation of downtiming and their opinion shall be sent to the Administration within 2 months following the request.

One important condition is that all employees working in the same working unit are treated the same way : downtiming cannot be applied to only one person, or with a variable way from one person to another, unless we can explain that they do not work in the same working unit, or that the difference is justified by a specific experience. In the latter case, then those explanation shall be represented to the staff representatives, who shall agree with it. Another option is to conclude a company collective agreement.

If those conditions are not met, the company may be requested to pay the money back to the State in case of a control, which could happen in the next years.

 

What if I had just hired someone ? Can I take my employment offer back?

If a firm offer (mentioning missions, remuneration and date of start) was made and already accepted, then there is already a biding contract, whether a formal one has been signed or not.

This means that an employer who would withdraw their offer without consent of the employee could be sued for damages for irrespect of a hiring promise. If we take into account previous case-law in France on diverse pandemics, there are high chances that COVID-19 would not be seen as force majeure allowing for not respecting the employment contract.

Nevertherless, hiring can be deferred (with the consent of the employee), and recent rules allow employees concerned to benefit from unemployment allowances during this period, even if they had resignated from their previous job and would therefore usually not be eligible to those allowances.

Termination of notice period could not either be considered as a valid option, at least not until a sufficient number of days has been performed to be able to acknowledge the professionnal competencies of the newly recruited employee.

However, downtiming is possible with new employees without restrictions, and if it leads to the suspension of the contract, then the trial period is suspended too and will start again when the employee is able to come back to work.

Can I impose my employees to take their remaining days of paid leave?

A recent order has been passed to allow employers to impose employees to take compensatory resting days (with a limit of 10).

As regards paid leave, this is possible, within a limit of 6 days, only if the company negotiates a company collective agreement on this topic, or if it is covered by a sector collective bargaining agreement. So far, metal industry and engineering consulting firms sector have negotiated such possibilities.

Another option can be to close down the company, which then allows to impose the paid leave dates, subject to a consultation of staff representatives and information of employees in due time (this deadline varying from one sector to another).

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children?

During the period from mid March until the end of April, employees who had to take care of their children were covered by a specific « sick leave » allowing them to receive 50% of their salary from the social security system, and, most of the times (depending on seniority and applicable CBA) the remaining part of salary paid by the employer.

From the 1st of May, they will be covered by the downtiming system presented in question 1 (70% of their salary, fully reimbursed to the employer by the state).

From the 1st of June, this coverage will be maintained only if they can provide a certificate from the school confirming that the children could not go back to school.

What should I do if there is still some business to do? How can I anticipate the end of the lock-down?

During the lock-down, and highly probably also afterwards, a priority is given to homeworking.

Companies have been strongly encouraged to organize homeworking as much as they could.

When it is not possible, then the employer has a duty to organize the workplace in a way that respects social distancing. Indeed, as a general rule, employers shall prevent employees from getting sick at work. This obligation is even stronger nowadays. Their liability could be seeked otherwise.

This means that organization of production and work shall be adapted to these new requirements: organization of the office/production line respecting social distancing, provision of soap and/or hydro-alcoholic solution to employees, modification of working hours to avoid crowdy offices or to reduce the use of collective transports,…

Those new means and organizational rules shall be registered, especially in the mandatory risk assessment document. Where there are staff representatives, they shall be associated to this thinking, as well as the occupational doctor in charge of the company.

Do I have the right to terminate contracts in this period?

Yes.

Termination of contracts (conventional termination agreements as well as dismissals or redundancy plans) can validly be decided.

The only difficulties which might arise are related to the formal procedures which shall still apply. For example, a mandatory preliminary meeting is required by law and can hardly be organized in this period. As a solution, a video conference can be organized, but subject to the consent of the person concerned.

In the same way, some procedures require the authorization or verification of the administration : then, the company should anticipate that the timing will be longer than usual, due to deadline suspensions.

Germany

How to deal with a reduction of business during the COVID-19 pandemic?

Short time work and thus salary reductions are a way of facing the decrease of activity or the complete closedown of business. However, employers cannot implement short-time work unilaterally. Either employees give their consent to short-time work or a collective agreement (collective bargaining agreement with the trade unions or a works agreement with the works council) exists, that allows the implementation of short-time work. If a works council exists, its involvement is mandatory.

If no such collective agreement exists and the employee refuses to give his/her consent to short-time work, a dismissal with the option of altered conditions of employment (i.e. with short-time work) based on operational reasons could be possible under specific circumstances. This is the only, but difficult way to implement short-time work without consent or agreement. However, it seems to be easier to appeal to the employees’ understanding and responsibility.

In case of short-time work, employers can apply for a short-time work allowance with the unemployment agency. The allowance has recently been adapted due to Corona-crisis. Normally, it compensates for 67% (with child) or 60% (without child) of the net pay lost as a result of the short-time work and can be paid for up to twelve months. By the end of 2020 the allowance increases to 77% (with child) and 70% (without child) as of the fourth month of short-time work and 87% (with child) and 80% (without child) as of the seventh month of short-time work.

The duration of the allowance can be extended up to 21 months for employees who have already worked short-time in 2019.

The prerequisites for a short-time work allowance are:

Significant work absences

  • Based on economic reasons or an unavoidable event
  • Temporary and unavoidable
  • At least 10 % of the staff is affected by short-time work and each of them loses at least 10% of their income (the thresholds have been lowered for the Corona crisis)

Operational requirements

  • at least one employee is employed
  • it is possible to implement short-time work only in specific departments of the company

Personal requirements

  • Employment is fully subject to social security

No allowance for

  • so-called “Mini-Jobber” with a monthly gross salary of EUR 450 or lower
  • employees on sick leave for longer than 6 weeks receiving sick payment from the health insurance
  • employees whose employment is terminated

Further improvements of the short-time work allowance during Corona crisis are:

  • social security contributions are reimbursed completely by the unemployment agency
  • short-time work allowance can also be granted to temporary workers
  • in case a company provides flexible working hours and provides a working time account, employees are not obliged to take “minus hours” on the account to avoid short-time work

Employers can apply online via https://www.arbeitsagentur.de/eservices-unternehmen.

Foreign companies can apply for short-time work allowance as long as the employees in Germany are subject to German social security and if the activity in Germany can be deemed as an “operation” within the meaning of the provision on short-time work.

Companies can fill the gap between the full time salary and the short-time work allowance voluntarily without any effect on the short-time allowance.

By the end of 2020, the rules on the deduction of short-time allowance due to an extra income have been liberated. It is now possible for employees receiving short-time allowance, to work in a second employment and achieve additional income without deductions of the short-time allowance, as long as the additional income plus short-time allowance do not exceed 100% of the normal full time income.

What if I had just hired someone? Can I take my employment offer back?

If a firm offer (either by sending a draft contract or by mentioning essential contract elements like missions, remuneration and date of start) was made and already accepted, then this means that there can already be a binding contract, whether a formal one has been signed or not.

In this case or if an agreement has actually been signed, a termination notice or a bilateral termination agreement is necessary to step back from the planned employment.

If not excluded explicitly in the employment contract even a termination before the start of employment is possible. In general the termination notice period, that needs to be observed, starts with the receipt of the termination notice and not with the planned start of employment.

As the strict Protection Against Unfair Dismissal Act does not apply to employments during the first 6 months, a termination is valid in case there is any plausible reason. A termination within the first 6 months of an employment is only invalid in case the termination is fraudulent or given in bad faith. However, if the reason for the termination is the Corona crisis, it can hardly be deemed as fraudulent.

Another option is to postpone the start of the employment amicably. Though there are no specific rules on such cases, unemployment agencies have signaled that employees concerned by such a postponement could benefit from unemployment allowances during this period, even if they had resigned from their previous job and would therefore usually not be eligible for those allowances.

Furthermore, short-time work can be implemented for new employees as well under the requirements mentioned in No. 1.

Can I impose my employees to take their remaining vacation days?

No, unfortunately not. The use of vacation can only be granted upon request of the employee or agreed upon amicably.

Although there is the instrument of a companywide vacation closedown which forces the employees to use vacation days during this vacation closedown, this instrument is not a suitable one during Corona crises. A companywide vacation closedown has to be announced with several months’ notice and the employer is bound to the announced vacation closedown. Thus, with this instrument the employer could not react flexible on imposed restrictions or their withdrawal.

What the employer can do is to assign the use of any overtime entitlements.

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children? Are they allowed to stay at home? Is the employer obliged to continued payment?

First of all, employees with children, whose child care institutions are closed down, have to take every possible step to organize alternative care for their children during working hours. However, in the current situation it is often impossible to find alternative caring options. If the children are too young to be left home alone, an employee is in general allowed to stay home in order to take care of the children. He/She is not obliged to use vacation entitlements.

However, the right to stay home does not automatically go together with continued payment. In such cases of temporary personal reasons to stay away from work, the employee is entitled to continued payment temporarily, i.e. for about one week. Therefore, a lot of parents would face loss of income when taking care of their children in times of a shutdown lasting several weeks.

Employers and employees are encouraged to find practical solutions e.g. shift working, working on weekends, working from home etc.

In order to minimize the loss of income for working parents the current legal situation has been adapted. According to a new provision in the Infection Protection Act, working parents are entitled to a compensation for the loss of income in case the child care institution is closed due to infection protection and they have to take care of their children aged under 12. The compensation is 67% of the income, but 2.016 EUR max. and is paid for up to 10 weeks per parent or up to 20 weeks for single parent. The compensation will be paid by the employer, who can apply for reimbursement with the competent authority.

What should I do if there is still some business to do? How can I anticipate the end of the lockdown?

The Federal Ministry of Labour and Social Affairs has issued a paper on occupational safety and health standards during Corona crisis. An English version of the paper can be found here: https://www.bmas.de/SharedDocs/Downloads/DE/PDF-Schwerpunkte/sars-cov-2-arbeitsschutzstandard-en.pdf?__blob=publicationFile&v=2

For example, employers are obliged to provide a safe work environment (e.g. keeping safe distance and where not possible providing alternative protective measures; sufficient cleaning and hygiene facilities). Office work should be performed at home if possible. Business trips and face-to-face interactions should be reduced to the absolute minimum. Finally, the employer should always take into consideration that the Corona-crisis does also mean psychological stress for the employees.

Do I have the right to terminate contracts in this period?

Yes, in general, a termination of contract is possible. Unlike in other countries there is no rule prohibiting dismissals during Corona-crisis.

However, the strict requirements of the Protection Against Unfair Dismissal Act for a valid termination have to be fulfilled. A termination based on operational reasons has to be planned carefully. Alleging “economic difficulties” alone will not justify a termination.

Furthermore, participation rights of the works council (if existing) have to be observed.

In particular, if mass dismissals are necessary, the employer can be obliged to conclude a reconciliation of interests and a social compensation plan with the works council.

Hungary

How can I deal with a reduction of business during the COVID-19 pandemic

In Hungary, the Government has introduced multiple measures – besides the ongoing curfew restrictions – aimed at helping companies navigate through these hard times.

General employment law related measures

  • The employer has more flexibility in modifying the work schedule even after it has been communicated to the employees;
  • The employer can unilaterally order the employee to work from home;
  • The maximum length of the working time frame has been extended to 24 months for all employers, which allows the employer to schedule less (or no) work for the employees during the state of emergency, and more work than usual during the remainder of the working time frame. Although this means that the employer must pay the whole base salaries of the employees even during the times when the employees work less, it also means that the employer will not have to pay overtime wages for the remainder of the working time frame; and
  • The employer may carry out reasonable and necessary measures in order to safeguard the health of employees.

Even if collective bargaining agreements regulated the above issues differently, such collective bargaining agreement provisions shall not be applied during the term of the government regulation.

In addition to the above, during the term of the government regulation employers and employees can agree to deviate from the rules of the Labour Code in a separate agreement.

Short-time work (Kurzarbeit) subsidy

  • The wage subsidy is to be provided by the state for the employee upon a joint request made by the employer and the employee;
  • The subsidy is payable for a duration of three months;
  • The rate of the subsidy is 70% of the wage for periods of absence proportionate to the lost working time. The working time may be reduced by at least 15% and 75% at the most. This means that when the employee only works 4 hours instead of the original 8 hours, 70% of his wages applicable to the lost 4 hours will be paid by the state. However, the wage to be considered is maximized at double the minimum wage in effect at the time of the application (i.e. the maximum amount of the subsidy that a worker could receive is around EUR 320 per month in case of the decrease of the working time by 75%); and
  • If the working time is reduced by less than 50%, the employer is also required to allocate 30% of the lost working time to the ‘personal development’ of the employee, during which period the employer is required to pay the basic salary of the employee.

During the subsidized period and for another month, the employer must maintain the employment relationship of the subsidized employee. When this obligation is not met, the subsidy must be repaid.

Research and Development (R+D) subsidy

  • Employers can receive government support after researcher-developers (engineers, researchers, IT specialists) for a maximum of 3 months.
  • The support covers all non-state-budgetary employers where research and development is carried out.
  • The employee must qualify as a researcher-developer as per Act LXXVI. of 2014 on Innovation: a natural person who is engaged in the creation or development of new knowledge, intellectual property, a product, service, procedure, method or system, or who is engaged in the management of the implementation of projects aimed at those things.
  • The support is for a period of three months and its amount may not exceed approx. EUR 900 per month per person. Below a certain amount of gross salary, the support decreases proportionally. The amount is paid to the employer, who must guarantee – in return for the aid – that the subsidised employee will remain employed for at least 3 additional months on a salary not lower than that which they received on the day the emergency situation was declared (March 11, 2020).

According to the general rules, if the employer is not able to give the employee work due to the epidemic, the so-called “Downtime” rules come into force. During downtime, the employee is entitled to a basic salary, and downtime counts as work done.

If, however, the employer is unable to give work to the employee for some “unavoidable external reason”, the employer does not have to pay wages. The law does not specify what is meant by an “unavoidable external reason,” and in the current coronavirus situation, it is still questionable what constitutes such a cause. In our view, the coronavirus situation alone does not create an unavoidable external cause, but the consequences of the certain government measures, on the other hand, can in certain circumstances fall into the category of unavoidable external cause.

What if I had just hired someone? Can I take my employment offer back?

During the period between the day on which the employment contract is concluded and the date of commencement of the employment relationship the parties may not engage in any conduct that may harm the employment relationship.

 

However, during the period referred to above, either party shall be entitled to withdraw from the employment contract in the event of material changes to their circumstances following the date of conclusion of the employment contract whereby carrying out the employment relationship is no longer possible or it would result in unreasonable hardship.

 

The employment offer may therefore be taken back even after the employment contract has been signed, but before the date of the employee actually beginning to work, by referring to the circumstances caused by COVID-19. This clause has rarely been used in the Hungarian court practice; therefore, we are unsure of the relevant practice of the courts. It should be noted that the unreasonable hardship caused by the pandemic may only be relied on if the parties concluded the employment agreement before the escalation of the virus.

Should the employer decide that the employee is redundant after the commencement of work, it may terminate the employment relationship unilaterally and without justification within the maximum 3-month long probation period, if such a period was agreed in the employment agreement.

Can I make my employees take their remaining days of paid leave?

According to the Hungarian labour code, vacation time is scheduled by the employer. Therefore, the employer may compel the employees to take their remaining paid leave days.

 

However – with the exception of the first three months of the employment relationship – employers shall allocate seven working days of the paid leave in a given year – in no more than two parts – at the time requested by the employee. During the scheduling of the paid leave, the employer shall also take into account that, unless otherwise agreed, vacation should be allocated to contain at least fourteen consecutive days once in a calendar year.

Employees must be notified of the scheduled date of their vacation time no later than fifteen days before the first day of the vacation.

How can I deal with employees that cannot go to work/provide work from home, because they have to take care of their children?

Although all nurseries, kindergartens and schools are closed indefinitely, these institutions are required (at least in theory…) to organize day care for children in small groups based on parental needs. Based on this, workers with small children are not exempted from working, as schools – in principle – take care of children.

The Hungarian Labour Code contains no specific obligations in this respect. Therefore, according to the letter of the law, the employer is not required to exempt parents from working solely on the basis that they have kids at home. A parent refusing to work due to this reason would breach the employment agreement. However, the employer may (and in certain cases may be required to) exercise its general duty of reasonableness and fairness in the employment relationship by making exceptions and allowing parents to work from home or to be exempt from work altogether.

The parties may conclude an agreement on voluntary unpaid leave, but during such period the insurance policies are suspended and the duration of the unpaid leave is not counted as a working period, therefore this period is not eligible for workdays required for pensions and severance pay.

In addition, there is a rule that an employee may stay away from work because of a personal, family, or unavoidable reason that deserves special consideration. It is the employer who shall consider whether the reason deserves special consideration. This rule was not invented with the coronavirus situation in sight. In any event, an employee is not entitled to wages when he or she does not perform work in such a case.

Best practise would be to consult and determine the reasonable options with employees. This means the duties are potentially different for single parents, parents whose partner works in a crucial job (health care), has many children, is vulnerable, etc.

If the employer agrees to home office, the employer shall be obliged to continue the payment of all applicable salaries.

What should I do if there is still some business to do? How can I anticipate the end of the lock-down?

Currently, home office is not a mandatory requirement for employers, merely a suggestion. Therefore, if there is something that may not be carried out from home, employees are free (and can be required by the employer) to go into the workplace. Going to the workplace is deemed to be a valid reason for disobeying the curfew restrictions.

We anticipate that the first 2-4 weeks of the restart should be a period when working at the workplace will remain an option for the employees, i.e. it will not be mandatory and home office will be allowed for those who still wish to work from home. Also, the number of employees working in the workplace should be limited to a certain percentage (50% may sound reasonable) of the employees, in order to ensure the effective implementation of social distancing.

Also, the employer may wish to consider which scope(s) of work may actually warrant physical office work, whereas those employees who can easily do their work from home could keep working from home for an indefinite period of time.

Following the 2-4 weeks’ period, the best practise would be to split the employees into e.g. two groups where the employees in the first group would be working during week 1, whereas those belonging to the second group would be working in the office during week 2. Employees who are taking care of children below a certain age (children who have no physical school education) and those who are in a special situation (e.g. are pregnant or have had Covid-19 symptoms or has had contact with a person who has been or may have been infected with coronavirus) will need to be offered the option to keep working from home for an indefinite period. The situation of those working from home could and should be evaluated every two weeks.

Do I have the right to terminate contracts in this period?

Yes. A company has the same possibilities for termination as before and the economic downturn caused by the pandemic situation may be relied upon as a justification for termination as well.

We note, however, that the state subsidy programs mentioned above are breached if the employer terminates the employment relationship of a subsidized employee during the term of the subsidy.

Italy

How to deal with a reduction of business during the COVID-19 pandemic? Can I impose a reduction of working time on my employees? Is there any help from the State to cope with short-time work?

In general terms, an employer cannot force any employee to accept a reduction in his working hours and the corresponding salary; it could be done just by an individual or collective agreement.

By the way, the Italian Social Security System offers different tools to cope with temporary crisis situation. In particular, in Italy has long been possible to activate a short-time working system called ‘Cassa Integrazione’ (CIG, CIGO, CIGS CIGD, FIS).

Through that system, the employer may reduce its employees’ work for a certain period of time. When they are not working, employees receive 80% of their salary, with a maximum set for 2020 of  € 1,124.04 net per month, paid by social security agency (generally INPS).

According to the usual rules, access to the short-time working system could only be granted under the following conditions:

  • the employer have to work in specific business sectors (oil & gas, buildings and constructions etc);
  • the employer must have more than 5 employees;
  • each concerned worker must have been employed for at least 90 days;
  • the employer must not have hired fixed terms contract workers in recent times;
  • the employer must specify his reasons to access the system within a close number (e.g. natural events / shortage of raw materials / crisis or corporate reorganization ‘certified’)
  • the employer must sign an agreement with trade unions representatives;
  • the employer must pay an admission fee to the social security agency (INPS);
  • the employer has generally to pay the short-time allowance to his workers and can therefore compensate it with the payments due to the social security agency;
  • the employer can access to the system for different periods of time depending on the reasons of the application and the business sector.

For the Covid-19 emergency, access to the short-time working system has been significantly expanded and the necessary requirements have been deeply simplified (DL n.18/2020).

  • employers in all sectors can access;
  • employers can access even if they have less than 5 employees;
  • no seniority of workers’ service is required;
  • the employer can access regardless of whether he has employees with fixed term contracts;
  • a general reason, ‘Covid 19 emergency’, is accepted for all employers;
  • there is no need for a union agreement, a simple consultation is enough;
  • no admission fee is due;
  • the allowance can be paid by the social security agency directly to the workers;
  • the emergency intervention (following the DL 34/2020) can last for a maximum period of 18 weeks between March and October (but it can be added to ‘ordinary’ interventions ).

Foreign companies can apply for short-time work allowance as long as their employees in Italy are subject to Italian social security.

The Italian Government passed many other measures to assist companies facing the COVID-19 crisis such as tax delays and loans on favourable terms. Specific measures has been set for independent contractors, start-ups, agricultural sector and cultural sector companies.

What if I had just hired someone? Can I take my employment offer back?

No special rule has been adopted for this case, to which general rules must apply despite the Covid-19 emergency.

If the job offer is not classified as ‘firm’ and has not yet been accepted by the worker, the employer may withdraw it unless bad faith is proved; which seems difficult considering the emergency.

If the offer has been accepted, the contract is binding.

However, if a probation period has been provided in writing, the employer could terminate the contract by the end of that period and the termination would probably be considered legitimate (cf. Cass. 1762/2000).

In general terms, the employer could also terminate the contract on economic reasons, but the dismissal would be suspended at least until 17th of August (see infra, question n. 6)

Finally, it’s always possible to postpone amicably the start of the employment.

Furthermore, as mentioned above, short-time work can be implemented for new employees as well (see supra, question n. 1).

Can I impose my employees to take their remaining vacation days?

Yes, in general terms, in Italy, the exact determination of the holiday period for each worker is up to the employer, but he has to try to fulfill the worker’s requests and cannot refuse arbitrarily to grant holydays in the desired period.

On these basis, at the beginning of the Covid-19 emergency, lacking specific rules, many workers were ‘forced’ to take time off to face the employers’ business activities contraction. That choice has been considered legitimate.

After the approval of the first measures to help companies cope with the crisis (supra, question 1), the employer can force his employees to use vacation days only when every other ‘social security tool’ (“Cassa Integrazione” first) is exhausted.

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children?

In Italy all kind of schools will be probably closed until September. Exception will be granted for nurseries and kindergartens during the summer.

To help workers to take care of their children under the age of 12 (or even disabled people), the “Rilancio” decree has granted:

  1. the right, for one of the two parents, to an extraordinary leave of 30 days with 50% pay covered by the social security agency (INPS);
  2. as an alternative to the leave, a contribution of 1,200 euros, paid by INPS, to purchase babysitting services. The contribution rises to 2,000 euros for health workers.

The contribution can be requested by accessing the institution’s portal (https://www.inps.it/nuovoportaleinps/home.htm) and can also be requested by independent contractors registered and insured by INPS.

In addition to the extraordinary leave, workers can stay home to care for their children without any consequences for keeping their job, but also without any payment.

Anyway, the employer is not required to pay the worker who does not work in order to take care of her/his children.

What should I do if there is still some business to do? How can I anticipate the end of the lockdown?

Throughout the lockdown period, work from home has been always promoted (and allowed) in all business sectors.

Prior to the Covid-19 emergency, an individual written agreement with the employee was needed to switch to so-called smart-working.

In order to deal with the Covid emergency, since the beginning of March, the employer can force his employees to work from home, providing the necessary tools.

On the other hand, disabled or otherwise ‘fragile’ workers can force their employers to allow them to work from home if it is compatible with their job.

In Italy it is not permitted to re-open activities earlier than required by national and, in some cases, regional laws.

All companies that have remained active or have been allowed to re-start after lockdown, must today comply with the protocols for health and safety protection of workers signed by the Government, companies and trade unions.

A first protocol applicable to all business sectors, signed on 14th March, was integrated on 24th  April (http://www.trovanorme.salute.gov.it/norme/dettaglioAtto?id=73916&articolo=16)  and flanked by 2 specific protocols for safety in logistics and transport sector  (http://www.trovanorme.salute.gov.it/norme/dettaglioAtto?id=73916&articolo=18)  and for safety on construction sites (http://www.mit.gov.it/sites/default/files/media/notizia/2020-04/Protocollo%20cantieri%2024%20aprile%2020.40.pdf). These protocols indicate the safety measures to be implemented to ensure a safe working environment (e.g. keeping safe distance and, where not possible, providing alternative protective measures; minimum cleaning and hygiene facilities etc.).

Do I have the right to terminate contracts in this period?

Not in all cases.

The ‘Cura Italia’ Decree (art. 46) suspends any collective redundancy procedure underway until August 17th and prohibits to start any new one; it also prohibits, until the same date, the termination of individual contracts for economic reasons (so called “giustificato motivo oggettivo”).

The following dismissals are still allowed on general rules:

  1. dismissals for disciplinary reasons;
  2. termination of fixed-term contracts upon expiry;
  3. executives’ contracts termination;
  4. termination within the probation period (supra, question n. 2).

This provision, although balanced by those relating to the short-term work system (supra, question n. 1), is much discussed and criticized by companies and scholars. Nevertheless, it has been confirmed by the ‘Rilancio’ Decree and its effects have been extended until mid-August (the original provision were binding until mid-May).

Netherlands

How to deal with a reduction of business during COVID-19 pandemic ?

The Dutch government does not have a compensation for reduced working hours anymore. Instead, the government created a subsidy for companies experiencing a reduction of turnover of 20% or more due to the corona-crisis. This so-called NOW subsidy, at a maximum, will cover 90% of the wage costs for a duration of 3 months, during March, April and May 2020. The measure may be extended by the Dutch government for another 3 months.

For HR purposes, it is useful to realize that the NOW subsidy is not related to the actual working hours. Under the NOW, the intention is that the employer keeps its employees and remains to pay them in full. Mostly, employees are still working –depending on impact of health measures – either fulltime or part-time, remotely or on site, fully in their original job or having been assigned alternative tasks.

How the NOW works in 10 (oops 12) bullets:

  • You assess the reduction of the company turnover over a period of the months March/April/May 2020 compared to the total turnover of 2019 divided by 4 (the average 3 month period in 2019).
  • Alternatively: You may also compare an assessment of loss of turnover over April/May/June OR May/June/July in 2020 to the average 3 month period of 2019 as above.
  • For companies that are part of a group, turnover reduction must in principle be measured collectively for all group companies with Dutch social security wages.
  • Your subsidy will initially be based on the social security wage sum of January 2020 plus a markup of 30% for costs other than base salary for 3 months. Salaries taken into account are capped at EUR 9,538 gross per month per person.
  • For some companies the wage sum of March 2020 instead of January 2020 can be used, such may be advantageous for companies with seasonal fluctuations.

Your subsidy will be:

  • In case of a reduction of 100% turnover  90% of the wage sum (plus 30%) over the 3 months of March/April/May 2020
  • In case of a reduction of 50% turnover  45%
  • In case of a reduction of 25% turnover 5%
  • Your subsidy must be used in order to keep paying salaries
  • You must inform your Works Council (or staff representative body) of your NOW application
  • You apply for the NOW subsidy at the state authority UWV: https://www.uwv.nl/werkgevers/overige-onderwerpen/now/detail/now-aanvragen
  • You will receive a 80% advance of the estimated subsidy based on the assessed reduction of turnover and wage sum of January. The first of three payments will be made within 2-4 weeks of the application

There will be final assessment based on:

  • the actual reduction of turnover over the 3 month period in 2020 of your choice (see above) compared to the average 3 month turnover of 2019;
  • the actual wage sum over the period of the subsidy. A reduction in personnel will case a reduction of the final subsidy
  • If you not renew contracts or let people go compared to the wage sum of January this will have a negative effect on your subsidy. If you apply for a permit to give notice for economic reasons a further penalty (50%) will be due.

The above outlines the basics. Further conditions relate mainly to prevention of misuse and fraud. You will be required to hold up-to-date records of administration available, inform the UWV of any relevant developments and present an auditor’s report to demonstrate the actual loss of turnover for the final assessment to be made.

The NOW measure is meant for all employers, including foreign companies, with Dutch social security wages and covers potentially, all employees, including flex workers. A foreign employer does require a Dutch bank account.

The deadline to file a request is 5 June 2020.

Other Dutch measures to assist companies in times of the COVID-19 crisis include many types of tax postponements and loans against favourable terms. Specific measures are currently in place for independent contractors, start-ups and scale-ups, specific types of the agricultural sector, the cultural sector.

What if I had just hired someone? Can I take my employment offer back ?

There are possibilities during a legal probationary period. Such a probation period should be included in the written contract of employment. Even then, it is possible that the company is required to pay a compensation. Since at this time, the crisis was likely already a known fact at the time the contract was offered or concluded, chances to withdraw a definite offer that is accepted are currently slim.

Can I impose my employees to take their remaining days of paid leave ?

No. You may encourage employees to take time off also during these times. You may ask them also to contribute voluntarily and take up days. Depending on your contract (or collective agreement where applicable) you may have a right to determine some days collectively.

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children ?

In the Netherlands, the primary schools will be opened from 11 May. Likely part-time as groups will be smaller.

The duties for employers and employees in these extraordinary times are covered by the general duty of reasonableness and fairness in the employment relationship. The duty to act as a good employer and as a good employee.

Best practise would be to consult and determine the reasonable options with employees. This means the duties are potentially different for a single parents, parents whose partner works in a crucial job (health care), has many children, is vulnerable, etc. The simple question to openly discuss would be, what is possible, what is efficient and workable. Efforts from the side of the employee are also required, within reason. Parents are for instance working part-time and sharing tasks amongst partners or with neighbours including home-schooling and taking care of each-others children in small consistent groups so that 50% of the working time is at least saved.

What should I do if there is still some business to do ? How can I anticipate the end of the lock-down ?

During the partial lock-down, and highly probably also afterwards, a priority is given to working remotely from home.

Companies have been strongly encouraged to organize working from home as much as possible.

When it is not possible, then the employer has a duty to organize the workplace in a way that respects social distancing (1.5 m) and hygiene and other guidelines of the government. This includes measures to avoid crowds and gathering also in commuting by, for instance, working with flexible hours or shifts.

Specific industries may well be required to comply with industry specific standards as developed by social partners (unions and employers organisations), potentially set out by a collective agreement. It is advised to confirm company specific measures in a risk assessment document. Where there is a health risk officer in the company, naturally he/she must be involved. Depending on the seize of the company and the industry, the Works Council or staff representation as well as the Arbo-service and/or company doctor may be involved.

Do I have the right to terminate contracts in this period?

Yes. A company has the same technical possibilities for termination as before.

However, the NOW subsidy may well be reduced. See above under 1. The intention and therefore one of the conditions for the subsidy is that during the subsidy no requests for terminations for economic reasons are submitted. Also, in the event that a company does request a termination, it must show that even with the NOW subsidy, it would still be necessary to terminate.

Slovakia

How to deal with a reduction of business during COVID-19 pandemic? Can I impose a reduction of working time to my employees?

One possible way to deal with reduction of business is to adjust working time schedule of the employees. If there are employees’ representatives operating at the employer, the employer can agree with them in a collective agreement or another written agreement on an uneven working time scheduling in form of a “working time account”. This enables the employer to adapt the working time schedule to the current demand on work. In general, the agreed (standard) weekly working time could be balanced during 30 months. This option is, however not available to employers where there are no employees’ representatives (trade unions, work council, employees’ confidant).

In case of downtiming, in general, the employer must pay to the employees who are not working (and stay at home), due to the closure or limitation of the employer’s activities, 100% of the employee’s average earnings. If there are employees’ representatives (trade unions, work council, or employees’ confidant) operating at the employer, the employer can agree with them on 60% compensation. If there are no employees’ representatives at the employer, the employer generally cannot unilaterally decide on the reduced compensation to the employees.

However, special rules were implemented due to the COVID-19 pandemic, which state that during an emergency situation, state of emergency and state of distress (“Emergency Situations”), if the employee cannot perform work (at all, or partially) due to the closure or limitation of the employer’s activities due to a decision of the respective authority or due to the Emergency Situations, the employees who are not working are by virtue of law entitled only to 80% of the employee’s average earnings.

In any case, the employees must receive the compensation at least in the amount corresponding to the statutory minimum wage.

Further, employers affected by reduction of business during COVID-19 pandemic are entitled to ask for allowance to maintain job positions during the Emergency Situations.

Employers that closed or limited their operations during the Emergency Situations based on the respective decision of the Public Health Authority are entitled to an allowance in the amount of 80% of the employee’s average earnings for each employee, up to a maximum cap of EUR 1,100 per employee. In case the employer paid a wage compensation of 60% of the employee’s average earnings, the maximum amount of the allowance is EUR 880.

Employers whose operations were not affected by the decision of the Public Health Authority, but they maintain job positions despite the fact that their sales decreased during the Emergency Situations, are entitled to ask either for payment of a part of employee’s wage compensation up to the amount of 80% of the employee’s average earnings for each employee, up to a maximum cap of EUR 880, or for a flat contribution to compensate part of the labor cost for each employee, with the amount of the contribution based on loss of earnings.

The total allowance that an applicant may receive via this government program is EUR 800,000.

What if I had just hired someone? Can I take my employment offer back?

The Slovak law does not specifically regulate employment offers as a binding instrument, it is therefore critical whether such process of offer and its acceptance may constitute a concluded employment contract. If the offer was an informal one, in particular with a clear reservation of it being subject to execution of an employment contract, then it can generally be taken back. If the offer included type of work and its brief characteristics, place of performance of work, salary conditions and date of start, was made as a contract proposal and such contract was already accepted, then there might be already a binding contract between the employer and the employee.

This means that the employer is bound by concluded employment contract and cannot withdraw the offer, without an agreement with the employee. The employer can withdraw from the employment contract only if: the employee does not start work on the agreed day without being prevented from it by an obstacle at work; the employee does not notify the employer on obstacle at work, which prevents the employee to start work on the agreed day in period of three days; or the employee was validly sentenced for a crime after the conclusion of the employment agreement.

Hiring can be, however deferred with the consent of the employee.

If a probation period was agreed with the employee in the employment contract in writing, the employment may be terminated by the employer on any day within the probation period for any reason or without stating a reason, by a written notice. Probation period is extended by the period of obstacles in work on the side of the employee. Probation period is thus not extended during the time when operation of the employer is closed due to a decision of the respective authority or due to the economic situation of the employer. Trial period on the other hand would be extended for the time during which employee takes care of their children and does not work for that reason or is on vacation.

Can I impose my employees to take their remaining days of paid leave?

The employer can determine the dates of the vacation after a consultation with the respective employee (the consent of the employee is not needed but the employee must be consulted). The employer should do so based on a “vacation plan”. In practice, the employers (mainly small or middle-sized businesses) often do not have any “vacation plan”, which is not a big issue if vacations are agreed with the employees and there are no disputes. If there are no employees’ representatives (trade unions, work council or employees’ confidant) operating at the employer, the employer can issue the vacation plan without having consulted it with the employees; otherwise, the employer needs to agree on the vacation plan with the employees’ representatives.

When determining the particular dates of the vacation, the employer must take into consideration its own tasks, on one hand, and justified interests of the employee, on the other hand.

It may be disputable whether, if the employer decides that the employee must take vacation in these times where there apply several restrictions concerning relaxation areas and leisure activities, the justified interests of the employee are still taken into consideration. However, the Slovak Labor Code explicitly permits that the employer may order a mass vacation (in general, maximum of two weeks) if it is necessary due to operation reasons. In our opinion, a situation where the employer has no work to assign to the employees would justify the need for the mass vacation. If there are employees’ representatives operating at the employer, the mass vacation would have to be agreed with them.

During the Emergency Situations, the dates of ordered vacation must be announced by the employer at least 7 days in advance, as opposed to 14 days normally. If the employee agrees, this time period can be further shortened.

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children?

Employers must excuse the absence at work of an employee who personally and for the whole day nurses a sick family member (direct relative, sibling, spouse, or a parent), who personally and for the whole day takes care of a child up to up to 11 years of age, or an older child with long-term unfavorable health condition, if the child was ordered quarantine of isolation, if school or other facility providing care for the child is closed by a decision of respective authority, or if the person who normally provides care to the child cannot do so for objective reasons. Employers must also excuse the absence at work of an employee who takes care of a child up to ten years of age, if, the person who normally provides care to the child (e.g. the other spouse) is required to attend a medical check or medical care in a health care facility provided that it was not possible to attend to such medical check or medical care outside of the employee’s working hours.

Employers do not pay any compensation to the abovementioned employees while they do not work.

Employees who do not work, because they take care of their children, or nurse a sick family member for the whole day are entitled to care allowance, paid by social insurance. Employees who take care of a child up to up to 11 years of age, or of an older child, with long-term unfavorable health condition; if the child was ordered quarantine of isolation; whose child’s school, or other facility providing care is closed by a decision of respective authority; or whose entrusted person who normally provides care to their child cannot do so for objective reasons; fall into category of employees whose absence at work must be excused and are also entitled to care allowance. Employees which nurse a direct relative, sibling, spouse, or a parent of a spouse also fall into this category.

Generally, the care allowance is provided only for a period of up to ten days with respect to each case requiring the provision of care to the respective person. Pursuant to the new legal regulation, during the Emergency Situations in relation to the COVID-19 pandemic, the allowance shall be provided for the entire period during which there is the need to provide care, or nurse in person and for the whole day the respective person.

What should I do if there is still some business to do? How can I anticipate the end of the lock-down?

If the operation of the company was not closed by a decision of the Public Health Authority, the company may continue its operation, provided all health and safety measures are met.

Each employer must continuously ensure health and safety at work, and for that purpose the employer shall adopt necessary measures including ensuring caution, required means/tools, and a suitable system to manage the work protection. In order to comply with this basic obligation of the employer, the employer shall hence adapt its operation and the rules in the field of H&S to the COVID-19 pandemic. These would include measures such as regular disinfection, cleaning, washing of hands, wearing of protective masks and other gear, limitation of personal meetings, limitation of travelling.

During the Emergency Situations, employers are also entitled to order a home office to the employee if the work agreed under the respective employment contract allows to do so i.e. if the agreed work can also be performed from home in the “home office” mode. Similarly, the employee is entitled to demand to perform work from home (i.e. the employer must permit it), if the work agreed under the respective employment contract allows to do so, unless there are serious operational reasons (on the employer’s side) not enabling such work.

Do I have the right to terminate contracts in this period?

Yes.

Termination of contracts (termination agreements as well as termination by termination notice or immediate termination, if the required conditions are met) can validly take place. There are however no specific grounds added due to the current period.

The Slovak Labor Code protects certain group of employees – such as employees on a sick leave or employees on a maternity or parental leave – against the termination of employment by termination notice. This protection is extended during the Emergency Situations that the following employees are protected against the termination notice in the same way as the employees on a sick-leave: employees being in a quarantine or (ordered) “isolation”; employees nursing, in person and the whole day, a sick family member specified by law (the same category of nursing as specified in the question No. 4.); and employees taking care of, in person and the whole day, of children specified by law (the same category of taking care of children as specified in the question No. 4.).

Thus, as long as the employees are absent at work due to the abovementioned reasons, the employer cannot serve them a termination notice, save for exceptional cases. These exceptional cases include e.g. a serious breach of work discipline, or another (not serious) breach of work discipline.

Switzerland

I run a business and (a) had to shut it down or (b) have a significant reduction of business due to COVID-19. Is there an alternative to terminating the contracts with the employees?

Yes.

The employer can apply for short-time work for all employees (including cross-border commuters and for himself as self-employed independently of whether its company is organized as a corporation or not) at the Public Employment Agency. However, for persons in an employer-like position, assisting spouses or registered partners and apprentices, the extraordinary entitlement to short-time work ceases at the end of May 2020.

Conditions:

  • The employee has not already reached the retirement age
  • The employment contract has not already been terminated before COVID-19
  • The employee agrees to short-time work
  • The loss of working hours is identifiable
  • The working time is measurable
  • The working time is recorded
  • The loss of working hours is temporary
  • The loss of working hours accounts for at least 10% of the total hours normally worked by the employee
  • The economically induced loss of working hours is due to COVID-19

The short-work system works as follows:

  • The employer applies for short-work at the competent authority
  • The employer must claim for the compensation within 3 months following the end of the month for which its application has been approved
  • The maximum period to be granted short-work for is 12 months within a period of 2 years
  • The compensation is given even if the shortfall of work is > 85% during > 4 months
  • The employer pays the employee 80% of its shortfall of work (with a CAP of CHF 12’350/month) whereby the employer may deduct a 100% of the employee’s social security deductions
  • The employer receives the corresponding compensation from the Public Unemployment Insurance (i.e. 80% of the employee’s salary for the shortfall of work + 100% of the employer’s part of the social securities)
  • The employer may ask for the advance payment of the compensation in order to be able to pay the salary of the employee in time
  • The employer receives the compensation as of day 1 of the month the short-work has been applied for
  • The application is valid for a period of 6 months, ending 31 August 2020
  • The employer has to keep all relevant documentation during a period of 5 years
  • For new applications (i.e. for companies which have not yet applied for short-work during COVID-19) the ordinary pre-registration period of 10 days will apply again 

The forms for the registration of short-time work can be found at:

https://www.arbeit.swiss/secoalv/de/home/menue/unternehmen/versicherungsleistungen/kurzarbeit.html/#-335073858

I hired someone right before COVID-19 broke out, and the person has not yet started to work. Can I take my employment offer back?

Yes.

Swiss law knows the principle of freedom to dismiss. The principle applies anytime, i.e. also before the employee actually starts to work. Namely for economic reasons, the employer is, as a general rule, free to dismiss any employer without consequences. Special attention is to be given to the applicable termination period.

Can I impose my employees to take their remaining days of paid leave?

Yes.

Normally, the employee has to agree to such compensation.

However, based on the employee’s general duty of loyalty, she/he has to agree to compensation when employer’s preponderant interests so require (i.e. for urgent operational needs which were not foreseeable) and no major interests of the employee speak against it.

The employer must not force the employee to take compulsory holidays in excess of her/his holiday entitlement.

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children?

Are they allowed to stay at home?

The answer depends on the work to be provided by the employee.

The Government has obliged the Cantons to guarantee for the necessary infrastructure for those children < 12 years who cannot be taken care of on a private level. As a consequence, undergraduate schools have remained open and have provided a special care program for those children whose parents have to go to work (e.g. nurses, logisticians, workers in food shops).

Further and for the same reason, the Government has forbidden day-cares to close. Finally, the Government has forbidden that children be taken care of by persons at high risk (namely grand-parents).

Consequently, all those parents who can work from home, are allowed to stay at home, although the Government has only mandatorily imposed home-office for employees belonging to the category of persons at high risk.

Is the employer obliged to continued payment?

Yes.

In order to relieve the employer from the financial losses due to the reduced work capacity, the employer is allowed to apply short-work for the parent-employee.

Subsidiarily, the parent-employee qualifies for a COVID-19 daily allowance as of the forth day off work due to having to take care of her/his children < 12 years.

The employer has to come up for the first three days off work which corresponds to the ordinary period for which the employer is obliged to continued payment in case a parent-employee stays home to care for sick children.

What should I do if there is still some business to do?

Although the Government has been recommending home-office for all employees to the extent possible, home-office has not been mandatory

Consequently, as long as the employer ensures for the official protective measures with regard to hygiene and social distancing at the workplace (see sector-specific COVID-19 hygiene and social distancing concepts elaborated by the corresponding associations), employees have the duty to go to work. The employer shall, however, make the working hours of employees using public transportation as flexible as possible in order to avoid rush hours in public transport.

Do I have the right to terminate employment contracts during the state of emergency?

Yes.

However, special attention is to be given to employees belonging to the category of persons at high risk where neither work at the workplace nor from home is feasible. The court might (a) apply the protective blocking period (30 days in the first year of service, 60 days in the second until the fifth year and 180 days from thereon) applicable in case of illness and consider the termination expressed within this period to be void, or (b) consider the termination expressed after expiration of such period to be abusive (unlawful termination based on personal characteristic “age” and/or “disease”) with a compensation of up to 6 months salary. The abusiveness would probably be denied in case termination was unavoidable for economic reasons. An alternative could be to apply for short-time work.

United States of America

How to deal with a reduction of business during the COVID-19 pandemic?

In the United States, a company’s ability to reduce hours and/or compensation for their workforce will depend upon whether the workplace is union or non-union. In unionized environments, the respective collective bargaining agreement will determine the conditions in which compensation and hours can be reduced. In non-unionized workplaces, employers are given great latitude to reduce hours and compensation provided they comply with the Fair Labor Standards Act (“FLSA”) and/or state and local wage and hour laws regarding notice (provided a specific employment agreement does not provide otherwise).

The CARES Act created a federal initiative called the Paycheck Protection Program which provides forgivable loans to small businesses for payroll. The purpose of the program is to allow small businesses affected by COVID-19 to keep workers employed at or near their normal compensation for a period of eight (8) weeks.

If businesses are forced to lay off their workers or reduced hours, those employees are eligible for enhanced federal unemployment benefits through the CARES Act. Those enhanced unemployment benefits last through the end of July 2020. Finally, the FFCRA provides employers with tax credits to reimburse them for providing sick leave to workers who cannot get to work because of certain COVID-19 reasons.

What if I had just hired someone? Can I take my employment offer back?

Generally, if a business has offered employment but that offer has not been accepted by the applicant, then the offer can be rescinded at any time before the offer is accepted.

If the offer has been accepted, then the employer would need to follow usual termination procedures that would apply to any other employee. However, business downturn due to COVID-19 generally qualifies as a valid reason for termination absent a specific provision in an employment contract or collective bargaining agreement.

Can I impose my employees to take their remaining vacation days

Yes, businesses can generally require that employees use accrued benefits like vacation time or sick leave unless contractual provisions lay out the specific circumstances in which the business can require it. For example, in lieu of decreasing an employee’s hours, the business could require that the employee use vacation time to supplement their pay during that time.

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children?

The FFCRA deals with precisely this issue. If an employee cannot work or telework because that employee must take care of their child, then the employee is entitled to certain paid leave benefits. Generally, the employee may take up to 12 weeks of leave, receiving 2/3 of their regular rate of pay. The FFCRA encourages businesses to be flexible with employees during this challenging time as schools and childcare facilities remain closed while businesses reopen.

Not all businesses are subject to the FFCRA, and businesses can require supporting documentation to demonstrate that the employee cannot work due to a childcare situation. In addition, the FFCRA only applies if the employer otherwise has work for the employee to do. In other words, if the business has to shut down or lay off workers, the FFCRA does not help the employee. The employee would then have to rely on the unemployment benefits.

What should I do if there is still some business to do? How can I anticipate the end of the lockdown?

The U.S. Center for Disease Control (“CDC”) and Occupational Health and Safety Administration (“OSHA”) have issued guidance for businesses to operate during COVID-19. This CDC guidance can be found at this link – https://www.cdc.gov/coronavirus/2019-ncov/community/pdf/Reopening_America_Guidance.pdf.

Businesses are generally required to provide a safe working environment for all employees. This means following the CDC guidelines on cleaning/disinfecting, personal protective equipment, and dealing with confirmed cases of COVID-19. Businesses must create a written policy/procedure for the implementation of safety protocols at the workplace.

Employers should anticipate in increase in requests for leave because employees do not feel safe coming to work. Employers should carefully consider requests for leave and determine which laws are applicable to the employees’ specific leave requests. Generally, businesses can require that employees return to work except in limited circumstances where the employee is put at risk or in danger.

Do I have the right to terminate contracts in this period?

Yes, in general, terminations of employment are permissible. However, businesses are encouraged to carefully consider the reasons for dismissal and document the reasons. There may be an increase in employment litigation as a result of COVID-19 and employers should make sure the termination is legally permissible prior to proceeding. Anti-discrimination laws and other prohibitions on terminations in certain instances continue to apply during this time. Terminating someone’s contract because they have or are suspected to have COVID-19 could be considered illegal or retaliatory.