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crowe coronavirus summary

The influence of coronavirus on business in Slovakia

3/20/2020
crowe coronavirus summary
The worldwide coronavirus pandemic causing COVID – 19 disease currently affects practically all of Europe and Slovak Republic is no exception

The measures, which have been taken by the state to limit the spread of the coronavirus, already have but also will have an impact on the business activities of all entrepreneurs and we would like to sent you a brief overview of the options how to deal with some situations, which may arise.

  • Restriction of the operation from the perspective of labour law
  • Quarantine of the employees from the perspective of labour law
  • Employment solutions
  • Social security of employees
  • Obstacles to fulfilment of obligations
  • State support

Restriction of the operation from the perspective of labour law

According to the Act on Protection, Assistance and Development of Public Health, Public Health Authority of the Slovak Republic and Regional Public Health Authorities are authorized to take measures to prevent the creation and spread of movable diseases.

Based on the instructions from Central Crisis Staff of the Slovak Republic, the Public Health Authority of the Slovak Republic has adopted several abovementioned measures, while some of them directly restrict the business of some entities. These include especially restrictions on the operation of retail stores, restaurants, patisseries and sports facilities.

The measures taken by the Public Health Authority of the Slovak Republic are continuously announced in the media and are also continuously published on the website od the Public Health Authority of the Slovak Republic: http://www.uvzsr.sk/.

If you are subject to any of the measures, which have been taken and as a result of them you are obliged to close your operation and therefore you are not able to assign any work to your employees, then we would like to inform you, that from the perspective of the Labour Code this situation fulfil the conditions for being considered as so-called „obstacle on the side of the employer“.

When an obstacle on the side of the employer arises, the employees are entitled to the wage compensation up to the amount of their avarage monthly earnings.

Quarantine of the employees from the perspective of labour law

The current situation, in which the state imposes restrictions as prevention from the spread of the coronavirus might result in situation when employees are able to get into the quarantine and for that reason they will not be able to work.

An employee can get himself into the quarantine by applying to the doctor due to the suspicion on COVID – 19 disease, or he may be subject to the compulsory isolation due to his return from abroad.

However, the employers do not have to wait for the activity from their employees and they can proceed in compliance with the Act on Safety and Health at Work, which obliges the employers to apply general principles of prevention during the implementation of the measures necessary to ensure safety and health at work and to take appropriate measures to ensure the safety of employees´ health.

Within this competency employer can, depending of particular case, order the employee to take various measures to ensure the safety and health of the other employee.

It is appropriate from the employers to ask their employees, who returned from the areas affected by the coronavirus or who are showing symptoms of COVID 19 disease or who are living in the same household with persons infected with the coronavirus, to undergo a medical examination and the following quarantine.

The employee should according to the Labour Code obey such order from his employer, otherwise he could act in violation of the Labour Code and optionally also in violations of Act on Safety and Health at Work.

From the perspective of labour law it is important to point out, that whereas the closure of operation based on the measures taken by the public authority is situation considered as obstacle on the side of the employer for which the employee is entitled to wage compensation, employee quarantine means an obstacle so called important personal obstacle in employees´ work, during which the employee is not entitled to the wage compensation (the employee can be entitled to the income compensation according to the Act on Compensation of Income for Temporary Incapacity for Work.

Employment solutions

The employer can deal with the limitation of his operation or the lack of work and the related obligation to pay wage compensation to his employees in several ways.

The Labour Code offers the following options:

  1. Work from home - If it is according to the type of work possible the employer can order the employee work from home. The condition for ordering work from home is that such type of work has to be agreed as an option of work in the work contract. If the employer and employee have not agreed in the work contract on such type of work, it is necessary to agree with the employee on the work from home in writing, at least via e mail communication, but ideally through an amendment to the work contract In these cases there is no outage of work and the employer continues to pay the employee the wage for work from home.
  2. Change of the work schedule - The employer can unilaterally change the work schedule of his employees, so their potential work shifts do not fall on time, when it is possible that limitation of business operation can occur. However, the employer is obliged to notify his employees about such change of work schedule a week in advance In these situations it does not come to the outage of work and the employer continues to pay his employees the wage corresponding to the shift s which have the employees worked off in compliance with the changed work schedule.
  3. Taking holiday - The employer can unilaterally order the employee to take holiday, if he notifies him at least 14 days in advance. The Labour Code also allows so called collective holidays, which can the employer order up to 2 weeks (extremely up to 3 week). It is not possible to order the holiday sooner than 14 days in advance and on its potential taking it is necessary to agree with the employee. In these cases it comes to work outages and the employee is entitled to the wage compensation, however it is solved through the exchange for employee holidays.
  4. Important personal obstacles on the side of the employee. In case of the occurrence of important personal obstacle on the side of the employee he she is not able to start his work shift. Besides the quarantine and potential disease of the employee as important personal obstacle on the side of the employee can also be considered the care for child under 10 years of age or the care for sick member of the family In these cases the employee is not able to work and he she is entitled to the wage compensation just in some cases Important personal obstacle on the side of the employee can have priority over the obstacle in work on the side of the employer.

Social security of employees

In case the employee gets based on the ground of disease or suspicion on COVID 29 disease in to the quarantine, he she may be entitled to the sickness insurance benefits. Regarding the sickness absence of such employees there has been adopted special procedure for accepting this claim, which allows the employee and employer to fulfil the administrative requirement s connected with the confirmation of temporary incapacity for work in distanced way.

If the employee does not come to work for the reason of taking care of a child under 10 years of age he she can apply for the so called nursing benefit, which is one type of the sickness insurance benefits. Regarding the measures taken to prevent the spread of the coronavirus, there has been adopted special procedure of applying for the nursing benefit, which allows to process the application and getting the nursing benefit through phone.

More information about the abovementioned procedure of applying and processing the sickness insurance benefits are available on the website of Ministry of Labour, Social Affairs and Family of the Slovak Republic: https://www.employment.gov.sk/sk/informacie-media/aktuality/koronavirus-pracovne-pravo-pn-osetrovne.html

Obstacles to fulfilment of obligations

The restrictions imposed by the measures which have been taken to prevent the public health, prevent from disease of the employees and their quarantine can result into situation when your company will not be able to keep up with its contractual obligations with the business partners, such as the obligation to deliver goods and services within the agreed delivery period.

The disability to fulfil the contractual obligations may also lead to many legal consequences, such as the obligation to compensate the incurred damage or to pay the default interests.

Coronavirus as force majeure or vis maior

Force majeure is an occasion, which is unpredictable even while taking all care and which is unavoidable in all effort. Force majeure event could be natural disasters such as lighting, flood or natural patterns such as landslides. Regarding the abovementioned the coronavirus pandemic can be also considered as force majeure.

The coronavirus pandemic could be considered as force majeure for example in situation, when it will not be possible to fulfil the obligation because of the lack of employees who are able to work as the consequence of their quarantine.

Please note, that in case of acceptance of new obligation during the current situation, i.e. conclusion of new piece of work contract, the coronavirus pandemic would not be probably considered as force majeure due to the predictability of the incapacity for work of the employees.

In terms of the Commercial Code and the Civil Code force majeure may release from the obligation to compensate the damage occurred by this violation. However, to get rid of this obligation it is necessary to prove, that the obligation truly has not been fulfilled as a result of force majeure.

Also please note, that the Commercial Code contrary to the Civil Code, does not allow the company to relieve itself from its responsibility for the delay caused by force majeure, unless the parties have agreed on such possibility.

To avoid the potential responsibility for the delay of the fulfilment of the commercial obligation due to the coronavirus pandemic it is therefore appropriate to conclude with the business partner individual agreement or amendment to their contracts.

Coronavirus as a reason for additional impossibility of fulfilment o f the obligation

If the obligation become s impossible to fulfil, within the meaning of the Commercial Code and the Civil Code such obligation ceases to exist.

However, in terms of the Civil Code performance is not impossible, especially if it can be done even under difficult conditions, with higher costs or after the agreed period of time and the Commercial Code adds to the abovementioned also the possibility to fulfil the obligation through another person.

Regarding the abovementioned the current coronavirus pandemic could be considered as reason for additional impossibility of fulfilment just very rarely.

Coronavirus as a substantial change of circumstances

If the current coronavirus pandemic regarding the circumstances of the particular case causes a substantial change of circumstances, under certain circumstances it could affect some contracts on future contracts.

Within the meaning of the Civil Code the obligation to conclude future contract expires, if the circumstances on which the parties counted while concluding the contract about the future contract have changed to such extent, that it cannot be fairly required to conclude the future contract.

The right to not enter into the future contract is similarly regulated in the Commercial Code, which however requires from the obligated party a notification about the changes of circumstances addressed to the counterparty without undue delay.

However, both Codes consistently require, that the change of circumstances need s to be truly substantial and it needs to occur after the conclusion of the contract about the future contract Taking into account the diversity of circumstances, under which is each contract concluded, it is necessary to consider each case separately and take into account its specific circumstances.

State support

The state declared, that it is planned to adopt some measures to mitigate the economic impacts of current coronavirus pandemic However, the details about the nature of these measures are currently unknown.