Coronavirus and Businesses: 10 + 20 Critical Responses relating to Employment Relations in Businesses Affected or Suspended
The coronavirus continues to leave indelible marks on our everyday lives. It continues to have a major effect on the operation of businesses and their employment relationships. The legislator is making a strong effort to protect both. It provides special care to secure jobs (as we analysed in our previous article).
Also in our recent article (Coronavirus and Businesses: One-and-One Decalogues on The Latter’s Operation and their Employment Relations) we attempted to summarize the key elements of the recent legislation. But the relevant (critical) laws are issued, one after the other, at dizzying speeds. A very recent example is that of the no. 12998/232 JMD (Government Gazette B / 28.3.2020). It seeks to take appropriate measures to support employment relationships of the businesses that have been suspended and of those that have been designated (depending on the NACE Revision 2 classifications) as affected.
We will attempt, in the present article, to decode the parts of this JMD, as far as employment relations are concerned.
In the first part (consisting of ten points), we refer to employments relations of businesses whose activity has been suspended by order of a public authority.
In the second part (consisting of twenty points), we refer to employments relations of those businesses who have been characterized by the government (depending on their NACE Revision 2 classification) as affected.
A. Employees in companies whose activity has been suspended by order of a public authority
Question 1: Employees working in which businesses are affected by these measures?
Those who work in businesses that are suspended by order of a public authority.
Question 2: (a) Should the employees of the businesses concerned continue to provide their work? (b) What about their employment contracts?
(a) NO. Employees are not (and cannot) keep providing their work. The prohibition of the operation of the businesses concerned constitutes a force majeure event.
(b) The employment contracts of the employees concerned shall be suspended for as long as the public authority’s mandate to prohibit the operation of the business is in force.
Question 3: What about fixed-term contracts?
Fixed-term employment contracts which expire after the prohibition of the operation of the businesses are suspended. At the end of the suspension, the employment contract shall continue for the remaining time.
Question 4: What about unpaid leave?
Unpaid leave agreements agreed between employees and the undertakings concerned shall be automatically revoked by 28.3.20. These employees’ employment contracts are suspended and they are entitled to special purpose remuneration (€ 800).
Question 5: Can these businesses reduce their staff?
YES – Only in case of resignation, expiration of fix-term contracts, retirement, etc.
NO – in the case of dismissals (if, despite the prohibition, employees are dismissed, those dismissals are null and void, and so are the dismissals that occurred from 18.3.2020 onwards).
Question 6: What about the “special purpose remuneration”?
The special purpose remuneration amounts to € 800. When an employee has more than one employer, they must choose one of them, in order to qualify for the remuneration. The remuneration covers a period of 45 calendar days. It cannot be seized, it is tax-free and it cannot be offset against any debt.
In order for the remuneration to be paid, employees and employers are required to electronically submit (to the Ministry of Labor), official declarations with specific content and information. In case of omission of the relevant obligation by the liable employers, sanctions are provided. Specifically, their right to enjoy the suspension of instalment or of adjustments or of partial payment and all kinds of confirmed debts to the State is revoked.
Question 7: Do employees whose contracts are suspended have insurance?
YES – Employees of the aforementioned businesses are provided with full insurance coverage calculated on their nominal wages for a period of 45 days. It is covered by the state budget.
Question 9: (a) What is the process of obtaining special purpose remuneration? (b) What are the penalties for businesses that do not follow the procedure for obtaining special purpose remuneration?
(a) Both the employees and the undertakings concerned are required to electronically submit to ERGANI official declarations with specific content and details (Chapter A ‘Article 4 of No.12998 / 232 Government Gazette B’ 28.3.2020 JMD). Employees from 1.4.20 to 10.4.20. Businesses from 24.3.20 to 31.3.20.
(b) In the event of failure by the businesses concerned to do so, they shall be deemed to be excluded from the measures for the suspension of instalments or of adjustments or partial payments of any kind of confirmed debt to the State.
Question 9: Is There An Extension Of Deadlines For The Payment Of Insurance Contributions?
YES– The payment of current insurance contributions for February and March 2020 are extended to 30.9.2020 and 31.10.2020-respectively. The deadline for payment of instalments (initially due on 31.3.2020) owed by employers-businesses who have working financial arrangements is extended. And so is the deadline of the instalments to follow.
Question 10: Is The Deadline To Pay The Easter Bonus Extended?
YES– It is extended until 30.6.20. If the employment relation is suspended, the portion of the bonus corresponding to the time of the suspension shall be borne by the state budget.
B. Employees in companies whose activity is significantly affected (on a NACE Revision 2 classification basis) by the emergency measures
Question 1: Employees working in which businesses are affected by these measures?
Those who work in businesses that are severely affected by the adverse consequences of the pandemic, depending on the NACE Revision 2 classification of their main or, under conditions, secondary activity, as per the designation of the Ministry of Finance.
Question 2: Can those businesses suspend their staff’s employment contracts?
YES – These businesses may suspend, in whole or in part, their employment contracts with their, as of 21.3.2020, employees for a continuous period of forty-five (45) calendar days.
Question 3: What about fixed-term contracts?
Fixed-term contracts that have not expired until 21.3.2020 may be suspended (but it is not obligatory). At the end of their suspension, they shall continue for a time equal to that which elapsed between the commencement of the suspension and their expiry.
Question 4: Can there be a combination of suspending contracts, assigning safe operation personnel and / or transferring personnel to companies within the same Group?
These undertakings are entitled (cumulatively) to: (a) suspend the contracts of some employees, (b) designate some of their employees as safe operation personnel (but at least 50% of their staff), and (c) transfer some of their employees to companies within the same Group.
Question 5: Can these businesses make redundancies?
NO – When the above companies avail themselves of the opportunity to suspend the employment contracts of their staff:
It is expressly forbidden to terminate all employment contracts with their staff and, in the event of termination, such is void.
Question 6: Are these businesses required to maintain the same number of staff?
YES – When the above undertakings avail themselves of the opportunity to suspend the employment contracts of their staff. After the expiry of the suspension of the employment contracts of their staff, they shall maintain for a period equal to that of the suspension (ie 45 days), the same, as of 21.3.2020 employees (!) and the same working conditions (!). It is noted that the when calculating the “same number of jobs” one should not count in those employees who resigned or retired and employees whose fixed-term employment contract expires after the suspension has ended.
Question 7: Is the full and complete suspension mandatory?
NO – These companies can gradually apply (but until 20.4.20) the measure of suspension of employment contracts. Also, to apply it for a different number of employees each time.
Question 8: What Is Special Purpose Remuneration?
Employees whose employment contract is suspended due to the utilization of a relevant facility by the affected (depending on the class of NACE Revision 2 of their activity) businesses, receive as special financial assistance, a special purpose remuneration amounting to €800. Employees are the ones who choose, exclusively, one of their employers (if they have more than one), in order to become beneficiaries of the special purpose remuneration.
The special purpose remuneration covers a period of 45 calendar days.
The special purpose remuneration cannot be seized, it is tax-free and it cannot be offset against any debt.
Question 9: What Is The Procedure For Receiving The Special Purpose Remuneration?
Employees and businesses liable are required to submit, electronically (to the Ministry of Labor), official declarations with specific content and information. Employees from 1.4.20 to 30.4.20. Businesses from 24.3.20 to 20.4.20.
Question 10: Are There Any Penalties For Businesses That Do Not Follow The Default Procedure For The Granting Of The Special Purpose Compensation?
YES– The above businesses are obliged, according to the above (9th Question), to submit the official declarations mentioned thereof. Failure to submit them will result in serious sanctions. Specifically, their right to enjoy the suspension of instalment or of adjustments or of partial payment and all kinds of confirmed debts to the State is revoked from non-compliant businesses.
Question 11: Do employees whose contracts are suspended have insurance?
YES- Employees of the aforementioned businesses are provided with full insurance coverage calculated on their nominal wages for a period of 45 days. It is covered by the state budget.
Question 12: Is There An Extension Of Deadlines For The Payment Of Insurance Contributions?
YES – Provided that these businesses will choose to suspend some of their employment contracts:
(a) The deadline for payment of current insurance contributions for the months of February and March 2020 is extended to 30.9.2020 and 31.10.2020-respectively and
(b) For a period of three months, the deadline for payment of instalments (initially due on 31.3.2020) owed by employers-businesses who have working financial arrangements is extended. And so is the deadline of the instalments to follow.
Question 13: Is The Deadline To Pay The Easter Bonus Extended?
YES– It is extended until 30.6.20. If the employment relation is suspended, the portion of the bonus corresponding to the time of the suspension shall be borne by the state budget.
Question 14: Are these businesses entitled to the facilities provided, even when they do not exercise the right to suspend their employees’ employment contracts?
YES – These businesses-employers are entitled to (or not to) implement the suspension of their employment contracts. However, even if they choose not to adopt this measure, they are entitled to enjoy the suspension of instalments or of adjustments or partial payments of any kind of confirmed debt to the State.
Question 15: Are there any facilities available to these employees for their debts to insurance funds?
YES – Payments of instalments or of adjustments or partial payments facilities to insurance funds which expire on 31.3.2020 are extended up to 30.6.20 with no interest and surcharges.
Question 16: Are teleworkers entitled to special purpose remuneration?
NO – Teleworkers (a valuable, especially now, form of employment, which we have discussed in our previous article) in the above companies are not entitled to special purpose remuneration.
Question 17: Can these companies pay extra money to the beneficiaries of the special purpose remuneration?
YES – The businesses affected can pay an additional amount to their employees who are to receive the special purpose remuneration. This amount is a voluntary benefit (subject to the business’s own initiative). It may amount to a maximum of their gross earnings. Insurance contributions corresponding to this additional amount are covered by the employer.
Question 18: Are these companies entitled to employ their employees for whom they have chosen to suspend their employment contracts?
YES – The aforementioned -affected- businesses are entitled to avail of the services of their employees whose employment contracts are suspended (and who are entitled to special purpose remuneration). The work is offered – with the agreement of the employee – exclusively by teleworking. It, also exclusively, has to do with the temporary needs of the business. It is declared to ERGANI before commencing its implementation.
Important: In order not to abuse the measure, it is provided that: (a) the specific measure “may be applied only at 10%, at the maximum, on the employees of the company whose contracts are suspended” and (b) before the start of this specific telework, the employer is obliged to make the relevant statement to ERGANI.
The teleworker is paid proportionally based on their gross earnings. The amount of remuneration payable shall be up to the maximum amount of the salary they would receive for work lawfully provided, after the deduction of the amount of the special purpose remuneration.
Insurance contributions corresponding to this additional amount are covered by the employer.
Question 19: What are the measures to support employees of sole proprietorships, scientists-freelancers and traders-freelancers?
(a) Employees concerned
The employees who work for sole proprietorships, freelance scientists (doctors, lawyers, engineers, economists / accountants, researchers, educators) and freelance traders (such as plumbers, electricians).
(b) Special purpose remuneration
These employees are entitled to special purpose remuneration (€ 800) if their employment contracts are suspended by their employers. This special purpose remuneration can (also) not be seized, it is tax-free and is not offset against any debt.
(c) Procedure
The procedure for obtaining the special purpose remuneration (€ 800) and the relevant provisions are as set out above (Question 12).
Question 20: Are there any other beneficiaries of the special purpose remuneration?
(a) Employees concerned
The (former) employees of a business:
(i) whose activity has been suspended by a public authority decision, or, alternatively,
(ii) which has been designated as affected (according to their NACE Revision 2 classification). However, in order for the aforementioned (former) employees to qualify, their employment contract must additionally have been terminated from 1.3.2020 to 20.3.2020, either by resignation or dismissal, but as long as they have no other employment contract with another employer.
(b) Special purpose remuneration
These employees are entitled to special purpose remuneration (€ 800). This special purpose remuneration can (also) not be seized, it is tax-free and is not offset against any debt.
(c) Procedure
The procedure for obtaining the special purpose remuneration (€ 800) and the relevant provisions are as set out above (Questions A.9 and B.12).
The delegated JMD in question is issued under a very recent legislation. Its main focus is to help businesses survive. To halt redundancies and save valuable jobs.
The (legislative) gaps are not covered in their entirety.
Neither are the ambiguities.
Nor are the concerns of those called upon to interpret and apply critical legislative texts.
This JMD, however, is still an important tool in the struggle for the survival of employees and businesses.
An important tool that will help us move faster to a, hopefully bright, tomorrow…
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.