On 12 March 2020, the National Security Council announced further measures to prevent the spread of the coronavirus. These measures will have a far-reaching impact on businesses and employment. The government has already confirmed a number of initiatives that are being taken.
In the first place, companies that cannot continue to employ their workforce because of the coronavirus can invoke the temporary unemployment due to force majeure system. This system has since been extended until 30 June 2020. The amount of the benefit paid out under it been increased to 70% of a capped salary. More information about this can be found here.
Companies faced with a substantial drop in production, turnover or orders because of the Covid-19 coronavirus can invoke the system of economic unemployment. If the company has to apply to the Ministry of Labour for recognition as a company in difficulties, in the meantime it can also apply for the system of temporary unemployment on grounds of force majeure.
Finally, remote working is further encouraged and travelling is discouraged.
These measures will be further evaluated in the coming days and strengthened where necessary..
Meanwhile, the Covid-19 coronavirus is officially considered a pandemic and more and more companies are beginning to feel the economic impact of the virus. When a company is faced with a lack of work, employment contracts can be suspended by introducing temporary unemployment for economic reasons. For blue-collar workers, it is sufficient to demonstrate that normal working arrangements cannot be maintained for economic reasons. For white-collar workers, on the other hand, the company must, in principle, meet strict preliminary conditions, specifically a 10% drop in turnover, production or orders or a 10% degree of temporary unemployment for blue-collar workers. However, the problem is that, in order to assess the decrease, the figures of the most recent quarter submitted (in this case, the fourth quarter of 2019) are taken into account and there was no decrease in the last quarter (as the coronavirus had not yet made an impact).
If a company does not meet these preliminary conditions, it can apply to the Minister of Labour to be recognised as a company in difficulties on the basis of unforeseen circumstances resulting in a substantial short-term reduction in turnover, production or orders.
Before submitting this application, the company must first try to conclude a company collective bargaining agreement with its trade union delegation. This presupposes negotiations, among other things, on the amount of the supplement that the employer will pay, the measures for maximum retention of employment and the maximum duration of the suspension. If negotiations with the trade union delegation do not lead to an agreement within two weeks, or if there is no trade union delegation within the company, the company may draw up a business plan instead of a collective bargaining agreement.
The company can then submit its application for recognition as a company in difficulties to the Federal Public Service Employment Labour and Social Dialogue (FPS ELSD), together with the collective bargaining agreement or business plan. The application is then submitted to the ‘Business Plans’ Commission, which gives its opinion to the Minister within two weeks. On the basis of this advice, the Minister adopts a decision on the application.
As the full recognition procedure may take some time, the National Employment Office (NEO) also allows companies, in specific cases, to invoke the system of temporary unemployment due to force majeure described above while waiting for the recognition procedure as a company in difficulties to be completed. In order to invoke force majeure, the employer must make an electronic declaration to the regional NEO office as soon as possible. The NEO then recognises the force majeure event within three to four days on average.
If necessary, apply for recognition of your company as a company in difficulties in order to benefit from economic unemployment for white-collar workers. In the meantime, you can also submit an application for temporary unemployment resulting from force majeure to the NEO.