The pandemic that broke out in our country since March had dramatic consequences in the field of economy (among others). The vast majority of businesses have been hit hard. And so have the jobs they offer.
Significant legislative measures have been introduced in order to strengthen both. Their (expected) gradual revocation began with the LD of 1.5.2020. But the economic downturn persists. The road to recovery seems long. Most businesses are at risk. And so are the jobs they offer.
The first, very fast, response of the European Union to ensure both is the SURE Program. Its implementation in our country is the COOPERATION program that has just taken shape with the provision of article 31, Part C’ Law 4690/2020. How effective will it prove to be?
Question 1: What is the aid mechanism (: program) COOPERATION?
It is a type of employment support in the form of financial support for part-time employees. (And this despite the fact that both the explanatory memorandum and §1 of article 31 refer to “a form of financial support for short-term work”).
Its purpose is to strengthen employees and businesses. Its ultimate goal is to maintain full-time jobs in the private sector
This program is the implementation in our country of the European SURE Program. We have analysed SURE in the context of our article on Flexible Forms of Employment. That is, the provision of temporary support to mitigate the risks of unemployment in an emergency (SURE – Support to mitigate Unemployment Risks in an Emergency). SURE aims to protect jobs and employees affected by the coronavirus pandemic. The (total) financial assistance of this instrument is expected to amount to (up to) 100 billion euros in total.
Question 2: What is the duration of the COOPERATION program?
The duration of this program extends from 15.6.20 to 15.10.20. The businesses that will be included in the program can make use of the facilities of the COOPERATION program for one or more months within the specific period of time, either for all or for a part of their staff.
Question 3: Which businesses and under what conditions are they eligible to join the COOPERATION program?
All businesses in the private sector of Greece (of continuous or seasonal operation) have the right to participate in the program, provided that their turnover is reduced by at least 20%, subject to the distinctions detailed in paragraph 4 of article 31 of Law 4690/2020. The fulfillment of this condition is checked according to the time of each business joins in the program.
Basically, if a business participates in the COOPERATION program…
(a)… in June 2020: The sum of the turnover of March-April 2020 in relation to the corresponding period of 2019 is taken into account.
(b)…in July 2020: The sum of turnover from March to May 2020 in relation to the corresponding period of 2019 is taken into account.
(c)…in August or September 2020: The sum of the turnover from March to June 2020 is taken into account in relation to the corresponding period of 2019.
Question 4: Which employees does it concern?
It concerns those employees who were full time employees on 30 May 2020 (: date of publication of Law 4690/2020)
Question 5: What are the benefits of the businesses that will join the COOPERATION program:
The specific businesses/employers are entitled to reduce the weekly working time by up to 50%. Their benefit consists in the payment of a, respectively, reduced salary to the employees who will be included in the program.
Question 6: What are the obligations of the businesses that will join the COOPERATION program:
The specific businesses/employers are obliged to:
(a) not terminate the employment contracts of the employees who are part of it and, in case they do terminate them, such terminations are invalid
(b) to maintain the nominal salaries of the employees who are part of the COOPERATION program and for as long as each of them is part of the specific program.
(c) to pay the total sum of the insurance contributions corresponding to the (initial) nominal salary, the leave allowance and the Christmas gift of their employees who will join the COOPERATION program.
Question 7: What is the financial support provided under the program?
Employees of businesses/employers who will join the COOPERATION program are paid financial assistance corresponding to 60% of their net salary, which corresponds to the time during which they do not work. In the event that the employee’s net salary, after the above adjustment, falls short of the net statutory minimum daily or monthly wage, the difference is covered by the State Budget.
In the context of the COOPERATION program, a proportion of the leave allowance and the Christmas allowance due for the year 2020 is paid to the employees who will be included in the program, calculated on the financial support of short-term work, which amounts to 60% of the reduced salaries of the employees.
Question 8: Are some businesses more favored? In which areas?
Some businesses are treated more favorably in the context of the COOPERATION program.
These are (article 31, par. 5, law 4690/2020) businesses:
(a) providing passenger and freight air transport services (and businesses related to them)
(b) providing consulting and management services exclusively to the aforementioned (a) undertakings and, last,
(c) operating within airports and, exclusively, for their employees working there.
The sectors these businesses are favored (compared to the others) are two:
(a) They are obliged to pay the insurance contributions of the employees who will be included in the the COOPERATION program for the corresponding part of their salary payable (and not for the total nominal salary of their specific employees-like other companies are) and
(b) The COOPERATION program extends from 15.6.20 to 31.12.20 and, in addition, the eligible businesses are entitled to join at any time until 31.12.20
Question 9: Should we expect clarifications?
This legislation sets out the basic principles of this measure. We will be expecting clarifications to be introduced with decisions of the co-responsible ministries.
Question 10: The abolition of the Safe Operation Personnel provision.
We have approached in detail th measure of the Safe Operation Personnel in a series of our articles [indicatively: Flexible Forms of Employment (: The Past, The Present And The Future…)]. It was one of the most important tools provided to businesses for their survival and job rescue. As we move away from the (often) suffocating measures introduced to deal with the pandemic, these tools are gradually being withdrawn. This measure is abolished on 15.6.2020. It is replaced by the COOPERATION program.
How effective will this replacement prove to be?
Both the European Union and our country have already accepted flexible forms of employment and part-time work as a means of crisis management. They take precedence over dismissals. The COOPERATION program comes to replace the (introduced during the pandemic and) successful, measure of Safe Operation Personnel.
Will the benefit to the business/employer prove to be attractive enough for the success of the CO the COOPERATION program in the fight to save jobs?
We are to see.
But one will reasonably ask:
Why, in the present circumstances, should not an affected business choose to apply the measure of Part-time employment or, even unilaterally impose, the measure of Rotational Work – as they were and continue to be provided for by law today? In these flexible forms of employment: (a) the business employs part-time employees and (b) pays a reduced salary and insurance contributions respectively.
On the other hand, the same business, by including some of its employees in the COOPERATION program: (a) employs its employees it will include in the program for less hours and (b) pays a correspondingly reduced salary and, on top, the total sum of the insurance contributions corresponding to the nominal their salary.
The plate does not tilt in favor of the COOPERATION program …
Stavros Koumentakis
Managing Partner
Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.