Coronavirus & Businesses: Basic (legislative) survival measures
The pandemic, unfortunately, keeps spreading swiftly. The coronavirus is strong. Its consequences are unprecedented. Few are the businesses whose activity has not been affected. For the rest, unprecedented legislative measures have already been introduced. For some, their operation has been banned (or suspended). Others (most of them) have been characterized as affected. The legislator seeks to help them survive. And, of course, to help protect the job each of them offers.
In the present article, we will attempt a (necessarily) concise, comparative overview of the measures taken for each category.
We have already analyzed in more detail specific issues in our previous articles – written under the legislation in force at the time of writing. Indicative (most recent):
- Coronavirus and Businesses: 10 + 20 Critical Responses relating to Employment Relations in Businesses Affected or Suspended
- Coronavirus: the invisible (?) enemy of jobs (: dismissal prevention measures)
- Coronavirus and businesses: one + one Decalogues about their operation and their employment relationships (: “pitfalls” and “business opportunities”)
- Coronavirus And Businesses: The Second Decalogue For Businesses And Employment Relations (:Tough Times And Business Opportunities)
- Pandemic COVID-19: One, First, Decalogue for a Business’s Operation and Its Employment Relations
1. Regarding the legal requirements for the protection offered by the State
1.1. Businesses affected
This category includes those businesses whose activity is under specific NACE Revision 2 classes, as those are designated by a decision of the competent Ministry. The list is constantly expanding to cover all those who are actually affected.
1.2. Businesses which are suspended-banned
By Joint Ministerial Decision, the operation of specific categories of businesses has been temporarily banned (until 11.04.20200- at least at first). The ban applies countrywide. Its purpose is to reduce the risk of spread of the virus.
1.3. Conclusion
The inclusion in one or the other category depends on the NACE Revision 2 classification of their business activity. The distinction is made depending on the necessity (or danger) of continuing the business activity.
2. Regarding employment relations
2.1. Businesses in the affected sectors
The status of employment relationships in these businesses is at the discretion of the employer. The legislator provided specific tools. Specifically: (a) the possibility of suspending employment contracts, (b) the appointment of safe operation personnel of the company, (c) the transfer of their personnel to companies of the same group.
Particularly:
(a) Suspension of employment contracts
The employer/business (operating in an affected sector) may, by a unilateral decision, suspend the employment contracts (article 11.2.A.a. Legislative Decree/20.03.20). This decision may be taken for part or all of their, as of 21.03.2020, staff. Regardless of whether they are have fixed-term or indefinite-term employment contracts. Fixed-term employment contracts (which had not been terminated by 21.03.20) may be suspended. In this case, after the end of the suspension, fixed-term employment contracts shall continue for a period equal to that between the beginning of their suspension and their expiration (No. 12998/232/2020 JMD, Chapter A.2. article 1 par. 2).
The period of suspension must extend to 45 days. It is provided as continuous and uninvited. The employer has the opportunity to decide and impose the measure of suspension until 10.04.2020. Their decision is not required to be taken once for all or part of their staff. The employer is entitled to gradually suspend the employment contracts of their staff (No. 12998/232/2020 JMD, Chapter A.2, art. 1 par. 1, 7, 8).
This measure has three important implications for labor relations. If the employer implements it, then:
(i) The employer is expressly prohibited from terminating employment contracts. The ban applies to all their staff. And this, regardless of whether the measure of suspension was imposed only on a part of their staff. Any violation of this restriction results in the dismissal being void (art. 11.2.A.b. Legislative Decree / 20.03.20 and JMD no. 12998/232/2020, Chapter A.2. Art. 1 par. 4).
(ii) The employer is obliged to maintain the same number of jobs for a period of time equal to that of the suspension – after the suspension ends. This obligation was specified by the JMD No. 12998/232/2020 (art. 1 par. 5. Chapter A.2.). In other words, the employer is obliged to keep the same employees for 45 days after the expiration of the suspension measure. Most importantly: with the same working conditions under which those employees were employed on 21.03.2020.
The concept of the same number of jobs, however, does not include those which vacated because employees resigned. Also, because employees retired or because fix-time employment contracts expired after the suspension.
(iii) Employees whose contract is suspended, by virtue of a unilateral decision of the employer, become beneficiaries of the special purpose remuneration (€ 800) (11.2.Α.α Legislative Decree of 20/3).
The employer, however, may pay to its employees-beneficiaries of the above remuneration, an additional amount as a voluntary payment. This amount can be equal to the amount of their gross paid salaries at the most (No. 12998/232/2020 JMD, Chapter A.2, art. 4 par. 3).
Beneficiaries of the above special remuneration are also those who resigned or were fired, from 01.03.2020 to 20.03.2020, from a businesses operating in the affected sectors.
Regarding, in particular, the suspension of employment contracts and teleworking (a form of employment, which we analyzed in a previous article), the following are noted:
The above businesses/employers can agree with their employees, whose employment contracts are suspended, that work will be provided by telework. Teleworking, however, should only be offered to cover temporary needs of the business. Also, it should only concern a maximum of 10% of those employees whose contracts are suspended.
The employer reimburses the teleworkers, proportionally to their gross salary. The amount of remuneration paid for this work can at most reach the amount of the legal remuneration of each teleworker, after the deduction of the amount of the special purpose remuneration the employee is entitled to (No. 12998/232/2020 JMD, Chapter A. 2. art. 4 par. 3).
(b) Right to appoint safe operation personnel
The employer of the above businesses may, by their decision, appoint safe operation personnel (art. 9 Legislative Decree / 20.03.20). This is a measure that resembles the (unilaterally imposed) rotational work. The employer will decide which employees will (and will not) be working under this scheme.
However, the application of the measure presupposes that:
(i) Each employee shall be employed for a minimum of two (2) weeks each month (continuously or intermittently).
(ii) At least 50% of the company’s staff will be subject to this (measure). The work will be organized weekly.
(iii) The same number of employees, as that number was at the time of the start of the application of the measure, must be retained.
Details are expected with a ministerial decision to be issued.
(c) Transfer of personnel to companies within the same group
The employer has the right to decide to transfer the staff of their business to a business of the same group. The agreement between the two companies involved is a prerequisite. However, the busineses involved are required to retain the same number of employees as before the transfer (art. 10 Legislative Decree / 20.03.20).
2.2. Businesses that were suspended-banned
In these businesses, the employer has lost any freedom of regulating the employment relationships of their staff. And even further: the activity of their business as a whole, since it has been suspended by order of a public authority.
Prohibiting the operation of these businesses also means the suspension of their employment contracts. In other words: the suspension of the employment relations is not at the discretion of the employer.
The employer of the specific businesses cannot, of course, utilize the measure of safe operation personnel. The only possibility provided to them is that of transferring staff to a company within the same group.
The provided by law suspension of employment relations lasts in this case for as long as the the public authority prohibits the specific business activity.
All employment contracts (indefinite and fixed-term) are suspended. Regarding fixed-term contracts, those are suspended when they expire after the ban on the operation of the business. Those specific fixed-term contracts, after the end of the suspension period, continue for the agreed time remaining (no. 12998/232/2020 JMD, Chapter A.1. article 1 par. 3).
The employer’s obligation not to terminate employment contracts
During the period of suspension, the employer is explicitly obliged not to reduce their staff by terminating the employment contracts. Any violation of this prohibition is invalid (Article 11.1. Legislative Decree 20.03.20).
Special purpose remuneration
The suspension of the above employment contracts also results in the suspension of the basic obligations of those involved. More specifically, the provision of work by employees and the payment of wages by the employer. As a result, the employees in the specific businesses become beneficiaries of the special purpose remuneration of 800 € (art. 11.2.A.a Legislative Decree 20/3). Beneficiaries are also those who resigned or were fired (from these businesses) from 01.03.2020 to 20.03.2020.
Beneficiaries of the special purpose remuneration are also those who are on unpaid leave. The agreed unpaid leave is automatically cancelled from the publication of the JMD (ie from 28.03.20-no. 12998/232/2020 JMD, article 1 §4 Chapter A.1.). As a result, the employment contracts of employees who were previously on unpaid leave are suspended and the latter are entitled to receive the special purpose remuneration.
2.3. Conclusion
The fate of labor relations in businesses whose activity was prohibited or suspended by order of the public authority is prescribed. The employer has no room to make decisions. On the contrary, in the businesses which, depending on the NACE Revision 2 classification of their business activity, are operating in the affected sectors, the employer has a significant freedom to make choices. They are the one who will choose the measure or the measures to which their business will be subject. So the right choice and insightfully strategize their moves becomes vital.
3. Regarding insurance contributions
3.1. Businesses of the affected sectors
For these specific businesses the following are provided (no. 13226/325/2020 MD):
(a) Extension of the deadline for payment of current insurance contributions for employment in February and March 2020 and for the period until the suspension of employment contracts. That is, the use of the measure of suspension of employment contracts is presumed. These contributions can be paid until 30.9.2020 and until 31.10.2020 respectively.
In case the specific businesses decide to pay an additional amount to employees whose contracts have been suspended, they owe the corresponding insurance contributions (see above, under II.2.1.a.a.iii).
Similarly, corresponding insurance contributions are paid in case of telework. Specifically, when employees whose contracts are suspended are employed to cover temporary needs of the business (see above, under II.2.1a).
(b) A three-month extension of the deadline for payment of installments due on 31.3.2020, as well as all subsequent monthly installments of each arrangement, owed by employers-businesses who have working financial arrangements.
3.2. Businesses which were suspended-banned from operating
Regarding businesses that are suspended or banned from operating, following a decision of a public authority, the following are provided:
(a) Extension of the deadline for the payment of current insurance contributions for the months of February and March 2020. It is possible to pay them until 30.9.2020 and until 31.10.2020 respectively.
(b) A three-month extension of the deadline for payment of installments due on 31.3.2020, as well as all subsequent monthly installments of each arrangement, owed by employers-businesses who have working financial arrangements.
3.3. Conclusion
The provisions are basically common for both categories of businesses in terms of the possibility of suspending the payment of current insurance contributions and installments to insurance funds. They are, without a doubt, an important facility.
4. Regarding the Easter Bonus
Facilitation is provided (to both categories of businesses) for the payment of the Easter Bonus owed (article 19 Legislative Decree / 30.03.20). The obligation to pay it: until 30.6.20-at the latest. In case of suspension of the employment relationship, the sum corresponding to the time of suspension shall be borne by the state budget.
5. Regarding the payment of rents
5.1. Businesses of the affected sectors
No favorable arrangements are made for these businesses in terms of rent payments. In case of renting real estate, they still pay the agreed rent as usual.
5.2. Businesses which were suspended-banned from operating
Significant facility is provided for the above businesses when renting facilities. Specifically, these businesses are exempted from the obligation to pay 40% of the total rent for the months of March and April 2020 (article. 2 par. 1 Legislative Decree / 20.03.20). The non-payment of partial rent does not, of course, give rise to the right to terminate the contract to the detriment of the lessee or any other civil claim.
The above exemption for these businesses also applies in leases. In the cases of concession, for rent, of the use of a property (movable and / or immovable) in the context of a lease (article 2 par. 2 Legislative Decree / 20.03.20).
5.3. Conclusion
The provision for partial payment of leases for professional reasons is a significant relief for businesses whose activity has been temporarily banned or suspended, following an order of a public authority.
6. With regard to VAT. and confirmed debts
6.1. Businesses of the affected sectors
For the above businesses, an extension is provided, until 31.8.20, of the deadline for the payment of VAT-certified debts to the Tax Authorities / Audit Centers. It is also provided that the collection of the already overdue debts will be postponed (No. 1053 and 1054 / 21.3.20 MD).
The extension or, as the case may be, the suspension automatically ceases when the company violates certain obligations. That is, when it has suspended employment contracts and, despite the ban, either terminates contracts or does not retain the same number of jobs. Debts, in this case, are charged with interest and surcharges based on the initial date of the establishment of the debt.
6.2. Businesses which were suspended-banned from operating
Similarly, for these businesses, an extension of up to 31.8.20 of the deadline for the payment of VAT-certified debts to VAT / Audit Centers is provided. There is also a corresponding postponement for the collection of the already overdue ones.
6.3. Conclusion
This is another important relief for both categories of businesses.
7. Suspension of deadlines for the maturity, appearance and payment of securities
7.1. For both of the above categories of businesses, it is provided that from March 30, 2020 until May 31, 2020, the deadlines for maturity, appearance and payment of securities due by them are suspended by seventy five (75) days from the indicated date on each security (article. 2 par. 1.α. Legislative Decree of 30.03.20).
Of course, this provision does not prevent the debtor and the beneficiary from agreeing to pay the securities directly from the debtor to the beneficiary on the originally stated expiration date.
7.2. This is another important provision. Unfortunately, there are no provisions for checks with dated of issuance on the second and third ten days of March.
8. Temporary state aid in the form of a refundable deposit
8.1. In businesses that have been hit financially due to the pandemic, it is possible to grant a refundable aid, in whole or in part, in the form of a “refundable deposit” (article. 1. par. 1 Legislative Decree / 30.03.20).
8.2. This is another important provision, the details of which are to be specified by a JMD.
There is no doubt that the future of the above businesses is not promising. It is inevitable to make comparisons with the economic crisis of 10 years ago (2009) as well as with the economic crisis of 90 years ago (1930).
A series of legislative interventions aims at the temporary(?) “healing” of the damages businesses suffered, by providing “stimulating injections” that will help them survive and, why not, “regenerate from their ashes” The end goal: saving valuable jobs – and of course the national economy.
The cause can, unquestionably, be described as sacred. Also, without a doubt, national.
The cross, however, should not only be carried by the legislation. And it cannot be carried by good intentions.
Contributing to the common goal is the responsibility of each of us.
Stavros Koumentakis
Senior 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.