Coronavirus and Labor Relations: The gradual reopening of the labor market
The process of returning to a functioning labor market continues with the issuance of the JMD no. 17788/346/8.5.20. The specific JMD is issued by virtue of 1.5.20 Legislative Decree (Government Gazette t. A ’90 / 01.05.2020), which touched, among other things, upon labor relations.
We have analyzed this specific Legislative Decree in our previous article (Covid-19 and Cooperation Program: The long way back to “normalcy”).
It’s time to look into, in addition to what we mentioned in this previous article, the details of its implementation.
The categories of companies under this particular CMO are two:
A. Those that will not reopen, by order of the Public Authority, during the month of May 2020 and
B. Those which have been classified as affected and have suspended the employment contracts of part or all of their staff. Also, those that reopen after the removal of their suspension by order of the Public Authority.
More details on the individual categories of businesses (and in addition to what we mentioned in our previous article):
A. Companies that will not reopen by order of a public authority during the month of May 2020.
Question 1: Are these businesses entitled to make redundancies?
There is an explicit prohibition to terminate the employment contracts of their staff for as long as the suspension of their activity is maintained by order of a Public Authority. This provision is rather unnecessary as the relevant prohibition had already been imposed by article 11 par. 1 of the of 20.3.2020 Legislative Decree.
Question 2: What is the amount of special purpose remuneration that employees who continue to be suspended (currently) during May are entitled to? By what procedure and in what time will they receive it?
The special purpose remuneration for the specific employees is of the amount of € 534 for the month of May 2020.
Their businesses-employers must submit relevant Official Declarations on the ERGANI platform from 18.5.20 till 31.5.20. They are obliged to notify their Employees of these Official Declarations.
No (re)submission of a Declaration is required from these employees. However, they will submit them when, as an exception, they choose to modify the details of their bank account or the details of the renting of their home. In this case, they will have to submit the relevant Declaration from 19.5 to 1.6.20.
The payment of the special purpose remuneration for May will take place from 5.6 to 10.6.20
B. Businesses that are affected and have suspended the employment contracts of part or all of their staff as well as businesses that reopen after the suspension of their operation by order of the Public Authority
Question 3: How many employees’ suspension can be extended for the month of May?
The rule: 60% of those already in suspension- maximum.
The exception: A number of businesses, depending on the NACE Revision 2 classification of their business activity, (as those are set out in an Annex to the above CMO) are excluded, which may extend the suspension of employment contracts for a larger percentage of employees.
Note (1): If the business has only one employee whose contract has been suspended, then it is permissible to extend their suspension.
Note (2): If the calculation of the above percentage of 60% results in a decimal number equal to or greater than 0.5, the number is rounded up.
Question 4: Can the employer suspend an employee in May who has not yet been suspended?
The rule: Employers cannot suspend work contracts that have not been suspended until 10/5.
The exception: Businesses that have with a no. 86.10 NACE Revision 2 classification (: Hospital Activities)
Question 5: Is the employer obliged to extend at the same time the suspension of all the employment contracts of their staff?
Extension of the suspension can be applied gradually. Also for a different number of employees each time.
Note: The time of extension of the suspension depends on the time that each suspension expires.
Question 6: What (important) obligation is borne by businesses that extend the suspension of their employment contracts?
The obligation to maintain jobs and employment contracts: Businesses that extend the suspension of employment contracts to 31.5.20 have the obligation to maintain for 45 more days (after the end of the suspension) the same number of jobs. At the same time, they are required to maintain the same type of employment contract (full-time, part-time or rotational work).
Important: The “same number of jobs” do not include resignations, retirees and employees with fixed-term employment contracts which expire within the above 45 days.
The new provisions introduced: The above obligation results in a differentiation in relation to what the previous CMO [12998/232 / 23-3-2020 CMO (Government Gazette B ‘1078 / 28-3-2020)] determined, for the same issue, with regard to businesses suspending employment contracts. The specific CMO stipulated that the obligation to maintain the same number of jobs means (article 1 par. 5): “the same employees and with the same working conditions…”). Therefore, a comparison of the two provisions (of the above, of 23.3.20 CMO and of the recent, of 8.5.20, CMO) shows that the businesses that will choose to extend the suspension of the employment contracts of their employees for the month of May (unlike businesses that do not choose to extend the suspension):
(a) will not be obliged to retain the same employees but only the same number of employees and
(b) they will not be required to maintain in general the same terms of employment contracts but only the same type of employment contracts (full-time, part-time or rotational).
In other words, the following paradox arises: businesses that do not choose to extend their employees’ employment contracts for the month of May are in a more unfavorable legal position than those who choose such an extension (!).
Question 7: Is the possibility of extending the suspension also valid for fixed-term employment contracts?
It is possible to extend the suspension of fixed-term employment contracts.
Note: After the expiration of the extension period, the contract continues for the agreed time remaining.
Question 8: Is it possible to permanently revoke the suspension of employment contracts? And under what conditions?
Content of the possibility: The specific businesses are entitled to proceed with a final revocation of the suspension of at least 40% of the contracts of the employees who have been suspended.
Businesses offered the oprion: Those reopening in May by public order. Also, those affected, depending on the NACE Revision 2 classification of their business activity, that had suspended part or all of the contracts of their employees (but not those for which the suspension of operation continues by order of public authority).
Businesses exempted: Those that, depending on the NACE Revision 2 classification of their business activity, are mentioned in the Annex of the above CMO. These businesses are entitled to revoke the suspension at a rate of less than 40%.
IMPORTANT: For those employees whose suspension of employment contracts is revoked, the measures of the Safe Operation Personnel and the Transfer of Personnel to Companies of the same Group can be applied (articles 9 and 10 of 20.3.2020 Legislative Decree)
It is noted that, as far as the measure of the Safe Operation Personnel is concerned, for the calculation of the required 50% of the personnel of the business, the number of employees whose suspension of their employment contracts has been revoked is taken into account.
Question 9: How is the amount of special purpose remuneration paid to employees whose suspension is extended for the month of May 2020 calculated?
These employees are entitled to special purpose remuneration in proportion to the days of extension of the suspension of their contracts (€ 534 for 30 days).
Question 10: Until when should the Businesses submit the Official Declarations for the receipt of the special purpose remuneration from their employees?
The above businesses are obliged to submit their Official Declarations from 1.6.20 to 7.6.20 to the ERGANI platform with the necessary data for the receipt of the special purpose remuneration by their employees, whose suspension is extended. The businesses are obliged to notify their employees for the submission of said Official Declarations.
No (re) submission of any Official Declaration is required from these employees. However, they will submit one when, as an exception, they choose to modify the details of their bank account or the details of the rental of their home.
The payment of the special purpose remuneration will take place from 10.6 to 12.6.20.
In the article mentioned in the introduction of the present, we pointed out that the 1.5.20 Legislative Decree announced (inaccurately) the return to “social and economic normalcy”. The Common Ministrerial Order, delegated by the CMO, approaches the whole issue with more realism. It aims, as stated, to “gradually reopen the labor market.”
And it is true, indeed, that it is moving in the right direction.
Unemployment, however, is unlikely to be stopped by such measures. New, more drastic ones need to be taken. Assisting flexible forms of employment and arranging working hours seem like a one-way street.
Let’s follow the developments.
But it is important that we do not miss the opportunity that is now being given to us.
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.