Coronavirus Update no. 5/2020 – Options for staff management

Below you will find the list of legal instruments that allow the management of work relations in case of decrease in activity of the company, due to an extraordinary situation, more specifically the current state of emergency.

 

Using the cumulated paid vacation days

The employees may choose to use their paid vacation days that were not yet used.

 

Paid days off

Art. 122 of the Labor Code provides that, during periods of activity decrease, the employer has the possibility to grant paid days off, which may be offset with the overtime from the next 12 months. When granting the days off, you must also consider the fact that the overtime may be done only with the agreement of the employee.

 

Unpaid days off - art. 54 of the Labor Code

The employee must make a request for unpaid days off and the employer will accept such request.

 

Granting parents days off to supervise the children, while schools are closed - Law no. 19/2020

The days off to which this piece of legislation refers may be granted to only one of the parents if all of the following conditions are met: the schools where the children are enrolled are temporary closed (the current situation in Romania), the children are up to 12 years old or up to 18 years old for children with disabilities, and finally, the job of neither parent allows work from home.

The allowance for each day off is of 75% of the base salary corresponding to one working day, but no more than the daily amount representing 75% of national average gross salary (which is RON 5,429 for 2020).

 

The technical unemployment - art. 53 of the Labor Code

After consulting with employees' representatives, the company sends the employees into technical unemployment, while it has to pay the employees whose employment contracts were suspended an allowance of 75% of the base salary.

For the allowance paid during the period when the employees have the individual employment contracts suspended for technical unemployment, all social security contributions and income taxes are computed, withheld and paid by the company.

 

Technical unemployment paid by the state budget

To help employers overcome this emergency period due to Coronavirus, the new GEO 30/2020 provides for certain companies the right to receive from the State Budget the amount of the allowance that has to be paid to the employees that were sent into technical unemployment. Specifically, the allowance that the employees should receive it is paid by the state unemployment fund, but the amount should not exceed 75% of the national average gross salary for 2020 (RON 5,429 Lei).

From this allowance may benefit two categories of employers:

The first category represents the companies that temporarily stop their activity wholly or partially, because of the decisions issued by the competent public authorities. They are mainly all those companies who are forced to close their business. They will have to request the certificate for emergencies issued by the Ministry of Economy, Energy and Business, in order to benefit from this legislation. Implementing rules regarding this certificate are not yet published.

The second category is represented by those companies that reduce their activity as a direct effect of Coronavirus pandemic and do not have the financial capabilities to pay all their employees.  These companies may receive the allowance for up to 75% of their employees with active employment contacts. 

You may find more information on this subject in our Coronavirus Update no. 4/2020.

 

Individual layoffs - art. 65 Labor Code

Dismissal of an employee for reasons not related to the respective individual means the termination of the individual employment contract because the job occupied by employee no longer exists, for reasons unrelated to the person. The economic blockage, the lack of orders, etc. may be reasons for the termination of the employment contract.

Please note that depending on the number of dismissed employees the company may apply collective layoffs, please refer to the next section.

In case there are more employees with the same job, there should be certain arguments for choosing the ones that will be laid off.

 

Collective layoffs - art. 68 Labor Code

In this case the procedure lasts at least 50 calendar days (from the first action and until each individual dismissal takes effect). It involves consulting with the union / employee representatives and notifying the Labor authorities and the Unemployment authorities.

It is considered that the company makes collective layoffs if:

1. it dismisses at least 10 employees, if the company has between 20 and 99 employees;
2. it lays off at least 10% of the employees, if it has between 100 and 299 employees;
3. it lays off at least 30 employees, if the company has at least 300 employees.

 

Suspending the employment contract in case of force majeure - art. 50 par. (1) lett. f) of the Labor Code

This suspension applies and produces its effects upon notification of the case of force majeure by the employer to each employee.

From the date of the notification the employer no longer has to pay a salary or any other allowance to the employee.

As there is no case law in this regard, it is very difficult to estimate the chances of success in case some employees will challenge this decision in Court.

 

In order to have an efficient communication, we established a direct link with the related department. For the subject of the current Update, the requests for tax consultancy may be sent to [email protected] with a brief description of the query. One of our consultants will answer or contact you shortly.

 

 

Disclaimer

The information in this newsletter is intended to give you an overview of legislative news; the newsletter does not contain a complete analysis of each topic. For more information about the subjects presented, please contact us. We do not accept any responsibility for decisions or omissions followed by the use of the content of this newsletter. All Boscolo&Partners newsletters are available at the following address: http://www.crowe.ro.

 

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