Possibilities of holding general meetings and members’ meetings during the state of emergency II.

As from April 11, 2020, a lately issued Hungarian government decree regulates how members’ meetings and general meetings should be held during the state of emergency. The new government decree also overrides the relevant provisions of the Civil Code and the articles of association of companies and other legal entities.

What additional rights does the government decree give to the management?

In the first part of our summary of this newest government decree, we have already explained the increased „freedom” of the management regarding corporate decisions.

In many company’s case, the adoption of the annual financial report under the Hungarian Accounting Act is due in the near future. Pursuant to the interim regulation introduced by the government decree, the management is entitled to decide on the approval of the company’s financial report and the use of the after-tax profit. Moreover, the management can take emergency measures during the state of emergency, which would normally fall within the competence of the decision-making body.

These are very far-reaching decisions. Aren’t the hands of the management tied?

Yes: the decisions mentioned before can only be taken if a meeting of the decision-making body cannot be held, either by the participation of the members by electronic means or by voting in writing.

In addition, the legislature intends to set limits on the “emergency measures” of the management as a guarantee: accordingly, the management (i) may not, as a general rule, amend the articles of association, (ii) decide on the dissolution of the legal entity without a successor, (iii) nor may it decide on the transformation, merger or division of the company.

An additional restriction is that (iv) additional payments or other capital injections may be ordered by the operational management of the legal entity only with the prior written consent of the members/founders. In the case of company forms where company law imposes a minimum capital requirement (i.e. in the case of limited liability companies and public limited companies), (v) the management may not decide to reduce the subscribed capital.

Can members hinder management decisions?

Yes, this is possible before the measure in question is taken; the management may not take a decision if in their written opinion, the majority (at least 51%) of members holding more than 25% of the votes object to the proposed decision of the management. (If the legal person has a member having majority influence or a qualified majority, such member can block the measures of the management on its own.)

What happens if the tasks of the management are not performed by one person but by a body?

Like in the case of decision-making bodies, the government decree intends to enable the widest possible use of electronic means in decision-making processes in the case of management acting as a body. If there is no agreed procedure for the use of modern means of communication (or deviates from the government decree), the chairman of the board (deputy in case of impediment) and ultimately the member requested by the management are entitled to determine the rules of meeting and decision-making. It is important that written consultation and decision-making can also take place by electronic message exchange (i.e. by e-mail).

These facilitations should apply not only to the decision-making of the board of executive officers, but also to the decision-making of the supervisory board (or, if one exists, the audit committee).

What happens to mandates that expire during the state of emergency?

If the mandate of the executive officer of the company expires during the time of the state of emergency, his/her position shall last until the 90th day after the end of the state of emergency. The executive officer shall perform duties during this period. The cited rule applies ex lege, i.e. without a decision of the decision-making body.

If the executive officer resigns, he/she shall still perform his/her duties during the emergency or for 90 days after its termination. The same is true if the mandate is for a fixed term and the fixed term would expire during the state of emergency.

On the other hand, the mandate of the executive officer shall terminate if he/she is removed from office by the supreme body or if a reason for exclusion or conflict of interest arises. It goes without saying that in the event of the death of executive officer, the mandate cannot be maintained either, the just implemented interim rules do not bring change in this, of course.

It is important to emphasize that in the above time interval – similarly to the rules described for the executive officer – the mandate of the permanent auditor does not expire, and the permanent auditor is also obliged to perform duties during this time.

Beware of Significant Provision in the Agreement on Providing Contribution from the Antivirus Programme

We would like to draw your attention to the relatively significant, albeit hidden, provision contained in the agreement (“the Agreement“) concluded between the Labor Office of the Czech Republic and an employer that applies for provision of a state contribution as compensation of wages paid to its employees under the Antivirus Programme (see our newsletter “Compensation Package for Employers Adopted by the Government of the Czech Republic”).

In Article IX. of the Agreement entitled “Settlement”, it is set out that by concluding the Agreement, all claims of the employer against the state for damages caused by the relevant emergency measures of the government are settled when it comes to damages arising from the employer’s statutory obligation to pay wage compensation to employees due to obstacles to work incurred during the period for which the employer is entitled to the contribution.

For employers, this is to exclude the possibility of simultaneously drawing money for wage compensation from the Antivirus Programme and to claim damages from the state in the future caused by adopted emergency measures regarding wage compensation paid by the employer using its own money.

If employers receive a state contribution of 80% of wage compensation paid to employees under regime A, then by entering into the Agreement, they undertake to waive the claim towards the state for reimbursement of the remaining 20% of the wage compensation. This applies equally to regime B employees, i.e. their employers receive a contribution of 60% of the wage compensation paid out and for the remaining 40%, the state requests a waiver of the right to reimbursement to which the employer might otherwise be entitled from the state.

The aforementioned approach by the state and the ‘settlement’ appear logical in relation to the amount of the state contribution granted. On the other hand, we consider the waiver of any compensation from the state in relation to the part of the compensation paid by the employer using its own money to be really pushed here by the state.

In addition, the application for the contribution itself is silent as to any exclusion of future claims for damages in connection with the Agreement entered into and the payment of the contribution to wage compensation. Employers fill out this application through a web application that automatically generates the application after filling in, together with the Agreement to be concluded with the Labor Office of the Czech Republic. Thus, in an automatically generated Agreement, employers may not even notice a provision limiting their right to compensation from the state. Also, employers do not have a real opportunity to change the wording of the Agreement in any way and must accept the agreement if they wish to draw money from the Anvitirus Programme.

It is also important to note that the state has not yet informed employers of this restrictive provision. This requirement is also neither reflected in any way in the conditions for receiving contributions in the announced Antivirus Programme, nor in the Employer Manual that was published afterwards.

The Agreement concluded by the employer with the Labor Office of the Czech Republic is a so-called adhesion contract as the draft Agreement is unchangeable and the employer has no possibility to change its content in any way if they want to receive the state contribution. In addition, employers can be considered to be the weaker party in relation to the state, among other things because the employer usually applies for a state contribution in an acutely critical economic situation.

The Civil Code stipulates that a provision of an adhesion contract which is particularly disadvantageous for the weaker party (without a reasonable reason) is invalid. We believe that the conclusion regarding invalidity should also apply to the aforementioned ‘settlement’ clause in the Agreements. In this respect, however, the courts will have the final say in the event of a dispute with the state.

Perhaps a positive factor is that the state acknowledges its liability for the damage caused by the measures adopted, otherwise the authorities would not insert the provision on ‘settlement’ and ‘waiver’ into the draft Agreements.

Please do not hesitate to contact us if you have any questions regarding the right to compensation from the state arising from the adopted measures in crisis or otherwise.

How to Employ Foreigners During the State of Emergency?

In connection with the COVID-19 pandemic, the government adopted a series of crisis measures which have an immediate impact on the employment of foreigners and their work in the Czech Republic.

These include:
(i) a ban on entry for foreigners to the Czech Republic and a ban on leaving the Czech Republic; and
(ii) suspension of the reception of new visa applications and applications for temporary and permanent stays in the Czech Republic, as well as the suspension or discontinuation of proceedings regarding previously submitted visa applications or applications for stays in the country.

The above crisis measures have a major impact on employers who employ foreigners from third countries (i.e. countries outside the EU/EEA and Switzerland). However, the projects and supplies of entrepreneurs who do not directly employ any foreigners but who use the services or supplies from foreign subcontractors can be also significantly influenced by these measures. In order to minimize the negative consequences of the above-mentioned prohibitions, we have prepared a brief overview for you of selected specifics related to the employment of foreigners at the time of the state of emergency.

Specifics of Entry of Foreign Workers into the Czech Republic During the State of Emergency

There are several exceptions to the general ban on entering the Czech Republic and the ban on traveling out of the country during the state of emergency which can be applied in the case of arrival of foreign workers. One of them is an exception for workers who regularly cross the borders of the Czech Republic for the purpose of work (so-called cross-border workers). This exception is most often mentioned in relation to Czech employees commuting to work to Germany and Austria, but it can also be used the other way round (i.e. in relation to foreign workers coming from neighboring countries to work in the Czech Republic).

Although this exception applies in particular to workers who normally commute to work in a neighboring state daily or at regular intervals, it can also be used for the arrival of employees of foreign suppliers or subcontractors for the implementation of an international project (e.g. in the construction industry). However, it should be mentioned that these workers must be workers from neighboring countries of the Czech Republic. Moreover, these cross-border workers (commuters) must meet several prerequisites which differ according to the state from which they enter the Czech Republic. Therefore, it is always necessary to consider carefully whether this exemption is applicable in a particular case, all the more so since the rules for applying this exemption have changed several times in the state of emergency.

Another exception to the ban on entry for foreigners in the Czech Republic is the exception for employees of critical infrastructure services. This is an exception for foreigners who are to carry out urgent or emergency servicing of critical Czech infrastructure – i.e. infrastructure that is so important that any disruption of its functioning would have a serious impact on the security of the state, security of basic living needs of the population, human health or state economy. It follows from the above that only a limited group of entities will be able to benefit from this exemption (in addition to critical infrastructure operators, also certain major suppliers to such operators). The advantage of this exemption is that, unlike some of the exceptions for cross-border workers, it neither provides for a minimum period of stay nor for a maximum distance of the place of work from the borders.

In this context, it should be emphasized that the possibility of using any exemption from the ban of entry at the time of the state of emergency must always be assessed individually. For the application of individual exceptions, it may be decisive e.g. the worker’s domicile, the content of the employment contract or the activity to be performed by the worker in the Czech Republic.

Specifics of Employment of Foreigners from Third Countries During the State of Emergency

Currently, receipt of applications for residence permits is suspended at embassies of the Czech Republic. As a result of this measure, foreigners from third countries wishing to work in the Czech Republic can obtain a work permit, but they cannot receive a residence permit that is absolutely necessary for employment in the Czech Republic.

If foreigners are already working in the Czech Republic, then they can continue to work here during the state of emergency. This applies even if their work permit expires before the state of emergency ends. The validity of a work permit is automatically extended after certain conditions have been met, up to a period of 60 days from the date of expiry of the state of emergency. Also, foreigners whose residence permit expires during the state of emergency are entitled to remain in the Czech Republic for the duration of the state of emergency.

Foreigners working in the Czech Republic can change their employer during the state of emergency at any time. However, the change can only be made if (i) the new job is registered in one of the relevant central records of vacancies for foreigners maintained by the Labor Office of the Czech Republic or (ii) a new work permit is obtained. In view of the above, it is recommended to employers who are currently interested in employing foreigners to focus primarily on recruiting foreigners already residing in the Czech Republic.

If an employer is forced to terminate or not prolong their employment relationship with a foreigner due to the economic impact of the pandemic, they are asked by the Ministry of Labor and Social Affairs to assist such employees with registration of the status of a job seeker on the website of the Ministry of Labor and Social Affairs, or to provide them with assistance in dealing with the situation (e.g. assistance to return to their country of origin). If the employer fails to comply with this obligation, the employer is at risk of limiting participation in or exclusion from government migration programs.

We have extensive experience with the issue of employment of foreigners (including the application of individual exceptions to the ban on foreigners entering the Czech Republic during the state of emergency). We regularly monitor all restrictions and obligations arising from the crisis measures issued in connection with the state of emergency. We will be happy to provide you with legal assistance in this matter.

If you have any questions regarding the employment of foreigners, not necessarily only during the state of emergency, please contact Lenka Droscová lenka.droscova@randalegal.com or Jakub Adámek jakub.adamek@randalegal.com.

Temporary Emergency Bridging Measure to Preserve Employment: the conditions

The coronavirus has the Netherlands and the rest of the world in its grip and is seriously impacting the economy, among other things. Bars and restaurants have closed, shopping streets are empty and businesses are seeing an enormous drop in their sales. The Dutch government has announced several measures to alleviate these economic consequences. One of those measures is the Tijdelijke Noodmaatregel Overbrugging(NOW)(Temporary Emergency Bridging Measure to Preserve Employment). This scheme had been announced earlier, but the conditions for reliance on the scheme were made public on Tuesday, 31 March. We will address the main aspects of the scheme in this blog.

1. What are the conditions and how high is the contribution?
Employers may rely on the NOW in the event of a drop in turnover of at least 20% in a consecutive period of three calendar months between 1 March and 31 May 2020. The other condition is that an employer may not file a redundancy application on economic grounds with the UWV (Employee Insurance Agency) between 18 March and 31 May 2020. The contribution amounts to 90% of the payroll total in the event of a 100% drop in turnover. The actual contribution depends on the exact scope of the drop in turnover.

The application for the contribution first consists of an application for an advance of 80% of the expected contribution. That amount is then paid in three instalments. It is not yet necessary to submit an accountant’s statement when applying for the advance. When the final contribution is applied for, which must be done within 24 weeks after the compensation period, that accountant’s statement must be enclosed, however. An exception applies if the contribution does not exceed a threshold yet to be determined.

2. How is the loss of turnover calculated?
The turnover is determined on the basis of a three-month period. The employer may at its option have the reference period for the turnover comparison commence on 1 March, 1 April or 1 May 2020. The turnover generated in the selected three-month period must then be compared with the average turnover in 2019 (divided by four). An employer must apply for the contribution per withholding tax number.

The turnover is determined at group level. A group of companies may therefore not state the expected drop in turnover per entity. The turnover of the group or of the affiliated legal entities is therefore decisive in determining whether the NOW may be relied on.

3. Is the entire salary taken into account in calculating the compensation?
The contribution amounts to a maximum of 90% of the payroll total for the three-month period from March to May 2020. The payroll total is based on the wage for social insurance purposes from current employment. Additional charges and costs, such as employer’s social security contributions and employee contributions to pension and the accrual of holiday allowance are compensated. To accelerate the application procedure, a 30% surcharge for employer’s social security contributions has been opted for in all cases. No more than twice the maximum daily wage per month per individual employee is classified as wages. Wages in excess of €9538 per month are therefore not eligible for compensation.

4. What are the consequences if I nevertheless dismiss employees on economic grounds?
As described above, one of the conditions for relying on the NOW is that an employer may not file a redundancy application with the UWV between 18 March and 31 May 2020 on economic grounds. If an employer does so nevertheless, the UWV will handle that application in the regular manner. Depending on the outcome of the application, that will, however, have consequences for the amount of the contribution. The salaries of the employees for whom the redundancy application is filed are increased by 50% and are deducted from the payroll total on the basis of which the amount of the contribution is determined.

5. Will the scheme be extended and what conditions will then apply?
The possibility of extending the bridging measure has been kept open. That question will be decided on before 1 June 2020; the extension period will therefore immediately follow the first application period, which ends on 31 May 2020.

6. As from what date may NOW applications be filed?
The government aims to open the service desk for the applications on Monday, 6 April 2020. It will be determined on Friday, 3 April, whether that is feasible. The service desk will in any event be open by Tuesday, 14 April 2020 at the latest. Once the service desk has been opened, applications may be filed via the UWV’s website. That may be done without the use of eHerkenning or any other form of authentication or authorisation. The application must have been filed by 31 May 2020 at the latest. The UWV has announced that it aims to pay the first advances within three or four weeks after an application is filed.

7. Are variations possible for specific sectors or companies?
No. The scheme does not allow for sectoral or company-specific variations. Seasonal influences on the turnover are also not taken into account. The scheme is therefore not a solution for all companies.

If you have any further questions about the Temporary Emergency Bridging Measure to Preserve Employment, please contact one of our employment lawyers at tel. no. 020-664 5111. We will be pleased to help you.

Compensation Package for Employers adopted by the Government of the Czech Republic

Government of the Czech Republic yesterday (i.e. on 31 March 2020) adopted the new modified Compensation package for employers (“Antivirus Programme”) which we have previously reported. For the sake of clarity, the Government has combined the previously published compensatory measures into two (2) compensatory measures, i.e. regimes A and B listed below.


Under the A regime the state will provide employers with a contribution in the amount of 80% of the wage compensation provided to an employee, including social and health insurance contributions, if the reason for the obstacle to work is

• on the employee’s side “Quarantine ordered to an employee” (an obstacle under Section 191 of the Labour Code), whereas the amount of wage compensation provided by the employer is 60% of the employee’s average assessment base; or
• on the employer’s side “Inability to assign work due to enterprise closure as a result of adopted emergency measures” (an obstacle under Section 208 of the Labour Code), whereas the amount of wage compensation provided by the employer to is 100% of the employee’s average earnings.

The maximum amount of the contribution is derived from the current average supergross wage including social and health insurance contributions, and in this case amounts to approximately CZK 39,000.

Under the B regime the state will provide employers with a contribution in the amount of 60% of the wage compensation provided to an employee, including social and health insurance contributions, if the reason for the obstacle to work is on the employer’s side

“Childcare or Quarantine Ordered to a significant part of employees, i.e. at least to 30% of employees” (an obstacle under Section 208 of the Labour Code), whereas the amount of wage compensation provided by the employer is 100% of the employee’s average earnings; or
“Limitation of the availability of inputs, i.e. material, products and services which are necessary for its activities” (an obstacle under Section 207 of the Labour Code), whereof the amount of wage compensation provided by the employer is 80% of the employee’s average earnings; or
“Reduced demand for services, articles and other products of the company” (an obstacle under Section 209 of the Labour Code), whereas the amount of wage compensation provided by the employer is at least 60% of the employee’s average earnings.

The maximum amount of the contribution in this case is approximately CZK 29,000.


The conditions for obtaining the above contributions are as follows:

• the employer operates in the business sphere;
• the employer strictly complies with the Labour Code;
• the employees are in an employment relationship and participate in sickness and pension insurance;
• the employees have not been served with a termination notice and are not in the notice period as of the accounting date (with the exception of termination pursuant to Section 52 (g) and (h) of the Labour Code); and
• the employer pays the wages and social and health insurance contributions.

For the sake of completeness, we add that the contributions will also apply to agency workers, provided that the employment relationship with the employment agency was entered into before the day of the declaration of a state of emergency (i.e. 12 March 2020) and lasts for the entire duration of the Antivirus Programme.

The above contributions shall be provided to employers on the basis of an agreement concluded with the respective Labour Office of the Czech Republic retroactively. Employers shall be entitled to submit their applications for the contributions for March from 6 April 2020 (the expected launch date of the web application). All necessary operations between the employer and the labour office will be carried out remotely in electronic form.

If you have any questions regarding the state compensation in the area of employment or regarding other measures that an employer can use in the current difficult situation, please do not hesitate to contact us. More specifically, please contact our attorney-at-law, Lenka Droscová, who specialises in labour law.

Amendments to GEO no. 30/2020 on technical unemployment measures during the state of emergency

On 30th March the Romanian Government published in the Romanian Official Gazette GEO no. 32/2020 that amends, among others, the initial regulation on technical unemployment measures adopted in the context of COVID-19 epidemic by GEO no. 30/2020.

The amendments brought by GEO no. 32/2020 have the declared purpose of simplifying the conditions and formalities that need to be fulfilled in order for the employers to get the technical unemployment indemnity granted by the Romanian state.

1. Changes to the conditions that must be fulfilled by the employers in order to benefit from the indemnity granted by the state

Who shall benefit from the technical unemployment indemnity granted by the Romanian state? The employees of the employers that temporarily reduce or discontinue their activity, partially or totally, due to the effects of the COVID-19 epidemic, during the state of emergency, subject to an affidavit given by the employer in this respect.

The following documents are no longer required:

  1. the certificate of emergency situations is no longer required for the employers deciding the total or partial discontinuity of their activities based on decisions issued by the competent public authorities as per the applicable legislation;
  2. the affidavit from which to result the decrease of incomes of minimum 25% in comparison to the average incomes afferent to the period January – February 2020 and the lack of financial capacity to pay all employees, for the employers that are reducing their activities due to the effects of COVID-19 epidemic and that are not having the financial capacity to pay all the salaries to their employees.

In addition, all the employees of the employers mentioned at point 2 above shall benefit from the indemnity granted by the state (contrary to the previous regulation that capped the granting of indemnity only to maximum 75% of the employees having individual employment agreements active at the date of entering into force of the initial GEO no. 30/2020).

2. Clarifications on the amount of the indemnity granted to the employees for technical unemployment

In case the employer’s budget for personnel expenses allows it, the indemnity for technical unemployment granted by the Romanian state may be supplemented by the employer with amounts representing the difference up to minimum of 75% of the base salary corresponding to the occupied job, as per the general rule provided under art. 53 para. (1) of the Romanian Labour Code.

3. Additional provisions regarding the employees having concluded multiple individual employment agreements

In case an employee has multiple individual employment agreements concluded and at least one full-time agreement is active during the state of emergency, the employee shall not benefit from the indemnity granted by the Romanian state.

In case an employee has multiple individual employment agreements concluded and all of them are suspended due to the state of emergency, the employee shall benefit from the indemnity afferent to the individual employment agreement providing the most advantageous salary rights.

4. Changes in the procedural aspects for benefiting from the indemnity

The employers shall electronically submit with the competent employment agencies (i) a request signed and dated by the legal representative of the employer  together with an affidavit and (ii) the list of persons who shall benefit from the indemnity assumed by the legal representative of the employer, as per a template that will further be adopted by order of the ministry of labour and social protection and published in the Official Gazette.

The employers shall be held responsible for the correctness and the truthfulness of the data contained by such documents.

Please note that the templates provided under the initial GEO no. 30/2020 are no longer valid.

5. New terms for payment of indemnity by the state / employer

The term for payment of the indemnity by the Romanian state to the employer was modified to 15 days as of submission of documents by the employer (the initial term provided under the previous regulation was of 30 days as of such submission of documents).

The employer shall pay the indemnity to the employees within 3 days as of receiving the amounts from the state.

6. Provisions related to other beneficiaries of the indemnity granted by the state

Other professionals (such as individual companies or self-employed persons) and the persons having concluded individual labour agreements (Romanian: conventii individuale de munca) under Law no. 1/2005 on the management and functioning of cooperatives, that are discontinuing the activity due to the effects of the COVID-19 epidemic, during the state of emergency, shall benefit from a monthly indemnity amounting of 75% of the medium gross salary provided by Law no. 6/2020 on the state social security budget for 2020, based on an affidavit.

The natural persons obtaining incomes exclusively from copyrights and neighboring right, as regulated under Law 8/1996 on copyright and neighboring rights, that are discontinuing the activity due to the effects of the COVID-19 epidemic, during the state of emergency, shall benefit from a monthly indemnity amounting of 75% of the medium gross salary provided by Law no. 6/2020 on the state social security budget for 2020, on the basis of the documents requested by the National Agency for Payments and Social Inspection.

Also, GEO no. 32/2020 provides certain rules regarding sportsmen.

Flexibilization of temporary adjustment mechanisms to prevent dismissals

Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures to face the economic and social impact of COVID-19 (“RDL 8/2020”).

Exceptional procedural measures related to the termination of contracts and reduction of working hours in the event of force majeure

Force majeure events: Contract suspensions and working hour reductions directly deriving from the loss of business activity as a result of COVID-19 (including the declaration of the state of alarm). Said losses shall imply the suspension or cancellation of activities, the temporary closure of establishments open to the public, restrictions on public transport and the free movement of people and goods, a lack of supplies that puts great strain on ordinary activities, or extraordinary and urgent situations caused by the infection of staff members or the adoption of measures calling for pre-emptive isolation (issued by the relevant health authorities).

Procedure

  • The company shall file a request and attach a report detailing the loss of business activity caused by COVID-19, as well as any supporting documentation (where available). The company must notify workers of its request and submit the report and any supporting documentation to their representatives (if any).
  • Labor authorities, regardless of the number of workers affected, must corroborate a force majeure event.
  • The decision taken by the labor authority shall be issued within five days from the date of the request, following a report (where applicable) of the Labor and Social Security Inspection Body.
  • The Inspection Body decides on the application of measures related to contract termination or the reduction of working hours, effective from the moment the force majeure event takes place.
  • The report drafted by the Labor and Social Security Inspection Body, as requested by the relevant labor authorities, will be looked at within a non-extendable period of five days.

Exceptional procedural measures related to the termination of contracts and reduction of working hours for financial, technical, organizational, and production-related causes

  • In the event no legal representation exists, the main trade unions in the company’s sector will make up the commission in charge of representing the workers. They shall lawfully negotiate the applicable collective agreement. The commission shall be made up of a member of each trade union that meets the abovementioned requirements. Decisions will be taken on the basis of the representative majorities established. In the event the commission cannot be constituted this way, it shall be made up of three workers from the company, elected in accordance with the provisions set forth in article 41.4 of the Workers’ Statute. The representative commission must be constituted within a non-extendable period of five days.
  • The consultation period between the company and the abovementioned workers’ representatives shall not exceed seven days.
  • The report drafted by the Labor and Social Security Inspection Body, as requested by the relevant labor authorities, will be looked at within a non-extendable period of seven days.

Extraordinary contribution-related measures related to the termination of contracts and reduction of working hours in the event of force majeure due to COVID-19.

  • In temporary lay-offs caused by a force majeure event, the company shall not have to pay corporate contributions for as long as contracts are suspended or working hours reduced for said cause, provided that, on 29 February 2020, the company was making social security contributions for less than 50 workers. If, however, the company had 50 or more employees for whom social security contributions were being paid, this exemption will cover 75 %of the contributions made by the company.
  • This waiver will have no effects for the worker, since contributions will be deemed to have been regularly paid during this period.
  • The Social Security Treasury will apply these contribution exemptions upon the request of the employer. Said person must have previously identified the workers affected and notified the duration of the suspension or reduction of working hours.

Extraordinary measures in terms of unemployment benefits, based on the application of the procedures mentioned in articles 22 and 23

  • The recognition of the right of workers affected by this situation to receive unemployment benefits, regardless of whether they have met the minimum contribution requirements or not.
  • The period of time a person spends on unemployment benefits as an immediate result of these extraordinary circumstances will not be taking into account when calculating the total benefits the worker is entitled to based on his/her contributions. The goal is for workers to be covered by unemployment benefits for as long as possible.

Temporary limitation of the effects caused by submitting extemporaneous unemployment benefit requests.

  • During the period extraordinary measures are in force, the submittal of first-time unemployment benefit requests (or those of a continuous nature) outside the deadlines legally established will not reduce the duration of the benefits period.

Sixth additional provision. Employment safekeeping. The extraordinary employment measures set in the present royal decree-law shall be subject to the company’s commitment to guarantee employment during the six months that follow the resumption of business activities.

Tenth final provision. Term of validity. The measures foreseen shall remain effective for one month from their entry into force (18 March 2020). However, after a careful assessment of the situation, the Government can extend their duration by means of a royal decree-law. Notwithstanding the foregoing, the measures foreseen that do have a specific period assigned will be valid for the term detailed.

How COVID-19 outbreak is disrupting sports events, measures adopted by the Italian Government.

The Prime Minister’s Decree dated 9 March 2020 has suspended all sports’ events and competitions.

The sports facilities can be used only behind closed doors to allow the training sessions of professional and non-professional athletes (i.e. athletes recognized as being of national interest by CONI and the respective federations).

Sports associations and clubs, through their medical staff, must implement appropriate controls to contain the risk of propagation of the COVID-19 among athletes, technicians, managers and all other persons involved.

On 17 March 2020, the Italian Government issued the Law Decree no. 18 containing measures to support the National Health Service and economic support for families, workers and business related to the epidemiological COVID-19 emergency, adopting some specific economic measures also for the sport field.

In particular:

  • Article 61 provides that payments of withholding tax, social security contributions, and the mandatory insurance premiums to be made by national sports federations, sports promotion bodies, sport associations, amateur sports clubs and for those who manage stadiums, sports facilities, gyms, clubs, dance and fitness center and swimming pools, are suspended until 31 May 2020. Such payments mentioned above shall be made either in a lump sum by 30 June 2020 without the application of penalties or interests, or in a maximum of 5 monthly installments, starting from June 2020.
  • Article 95 provides the suspension from 17 March to 31 May 2020 of the rent payment for public sports facilities owned by the Italian State (and by local authorities) remained unused during this period. In any case, the rent for the mentioned months shall be paid out either in a lump sum by 30 June 2020 without the application of penalties or interests, or in a maximum of 5 monthly installments, starting from June 2020. Moreover, the provision doesn’t apply to lease agreements for private facilities.
  • Article 96 provides the payment by Sport e Salute S.p.A. (former Coni Servizi S.p.A. owned by the Ministry of Economy) of an indemnity of 600 euros for the month of March 2020 in favor sport collaborators with VAT number and to holders of a non-fixed term employment contract registered to the so called “gestione separata” Inps as of 23 February 2020, provided that they are not retired and not registered with other forms of mandatory social security, they didn’t get any other wage and/or indemnity.

Remainder understood that the all other provisions of the Law Decree no. 18/2020 apply also to the operators in the world of sports, where applicable (i.e. Ordinary Wage Guarantee Fund, etc.).  

For the time being, Sport e Salute S.p.A. set aside a fund of 50 million euros but needless to say that this provision is not sufficient to cover the payment in full of the mentioned indemnities due to the considerable number of workers employed in the associations and sports clubs registered with the CONI.

Furthermore, it is necessary that the Italian Ministry of Economy and Finance provides for the procedures for filing the relevant applications and it determines the rules for the management and control of the fund (expected within 1 April 2020).

Concerning European competitions, UEFA (Union of European Football Associations) decided to postpone the final match of UEFA Europa League, UEFA Champions League and UEFA Women’s Champions League, all originally scheduled for May 2020.

UEFA, also, announced the postponement of its flagship national teams’ tournament, UEFA EURO 2020 until next year. UEFA stated that the reasons of postponement are: i) the protection of the health of all those involved in the game; ii) the avoidance of placing any unnecessary pressure on national public services involved in staging matches; and iii) the postponement should help all domestic competitions, currently put on hold due to the COVID-19 emergency, to be completed.

In a note dated 17 March 2020, the representatives of the 55 national member federations, as well as representatives of the European Association of Clubs, European Leagues and FIFPro Europe, reiterated that given the health emergency, the plan adopted is the best solution.

Announcing the above decisions, the Chairman of UEFA Aleksander Čeferin said: “We are at the helm of a sport that vast numbers of people live and breathe that has been laid low by this invisible and fast-moving opponent. It is at times like these that the football community needs to show responsibility, unity, solidarity and altruism”.

In the same view, FIFA decided to postpone the FIFA Club World Cup, which should have had taken place in June/July 2020, to a date to be set in the international match calendar which has to include also the new dates for CONMEBOL Copa América and UEFA EURO tournaments.

Finally, the IOC Chairman and the Prime Minister of Japan have concluded that XXXII Olympic Games in Tokyo must be rescheduled to a date beyond 2020 but not later than summer 2021, to safeguard the health of the athletes, everybody involved in the Olympic Games and the international community.

Measures to mitigate the negative economic impact in the tourist sector

Advancement and extension (February to June 2020) of the rebates available for the tourist sector. Royal Decree-Law 7/2020, of 12 March, adopting urgent measures to mitigate the economic impact of COVID-19 (RDL 7/2020)

Beneficiaries: companies whose corporate activities fall within the framework of the tourist sector, as well as the retail and catering industry (provided they are linked to tourism and excluding those belonging to the public sector): as long as they generate productive activity during February, March, April, May and June, and that they keep workers with permanent seasonal contracts employed throughout these months.

Benefit: a rebate, during those months, amounting to 50 % of the company’s contributions for common contingencies, as well as for the joint collection of these workers.

Period: from 1-1-2020 to 31-12-2020.

Scope of application: across Spain, except for the Balearic and Canary Islands, during February and March 2020. In the aforementioned months, the rebate that appears under art. 2 of Royal Decree-Law 12/2019 (urgent measures to mitigate the effects of Thomas Cook’s insolvency) shall be applicable.

NEW LABOR LAW REGULATIONS ACCORDING TO THE COVID-19

It is important to see that the Government has declared a state of emergency throughout the territory of Hungary due to the COVID-19 epidemic causing mass disease, and therefore provides for related measures in government decrees. Thus, under the special legal order, the Government may introduce new rules on the matters covered by this Article, which may even override the following.

There are several decrees concerning the immediate measures adopted to alleviate the economic impacts of the coronavirus epidemic have been published in Magyar Közlöny [Hungarian Gazette].

One, of the most significant decree is adopted new labor law regulations, decree No. 47/2020. (III. 18.) contains very important measures not only for certain sectors but for the whole economy.

Due to the economic downturn resulting from the epidemic, employers need to make quick, accurate, responsible, and last but not least, legitimate decisions for their employees.

According to the government decree, the Labor Code must be applied for the duration of the emergency period and for thirty days after its termination, that the employer may unilaterally assign the employee to work from home or telework. This means, this time there is no statutory limit to the duration of work at home. Before the decree, the total duration of such work might not exceed forty-four working days or three hundred and fifty-two hours per calendar year. Teleworking, which had to be agreed in the employment contract, was made unilaterally ordered by the employer.

A further relief is that the employer may adjust the working time schedule within ninety-six hours before the beginning of the daily work, if there are any unforeseen circumstances in the management or operation of the company.

The decree also contains a rule that the employer may take any necessary and justified measures to control the employee’s state of health.

The decree also contains regulation, that the employer has the right to decide about the ordination of home office alone, without the objection of the employee.

The decree eases the burden on companies operating in certain sectors, such as hospitality, tourism, entertainment, gambling, film, performing arts, event organizer and sports services, by not having to pay the public wage for their employees until June, 2020.

The prime minister stressed the necessity of measures to protect workplaces and warned of a serious wave of unemployment approaching. He asked employers and employees to make personal efforts to preserve jobs.

According to the decree, further regulations will be determined by further regulations.