NEWSLETTER NO. 1/7 APRIL 2021
The main changes introduced by Law no. 58/2021 on Kurzarbeit (reduced working time)
On 8 April 2021, Law no. 58/2021 (hereinafter referred to as ”the Law”), which amends the current regime of the so-called ”Kurzarbeit” (reduced working time) regulated by Emergency Ordinance no. 132/2020 approved with amendments and additions by Law no. 282/2020.
The measure of reduced working time may be taken by employers in the event of a temporary reduction of activity due to the establishment of a state of emergency/alert/curfew and is an exception to the rule that normal working hours for full-time employees are 8 hours per day and 40 hours per week.
The measure of reduced working time may be ordered for the duration of the state of emergency/alert/curfew and for a period of up to 3 months after the end of the last period in which the state of emergency/alert/curfew was established.
With this newsletter, we present the most important changes made by the Law, relevant for employers.
New conditions for the application of the reduced working time measure
- The employer has the possibility to reduce the working time of the employees by a maximum of 80% of the daily, weekly or monthly working time stipulated in the individual employment contract¹.
- The measure is taken by the employer after reaching an agreement with the trade union organization entitled to negotiate the collective agreement or, if there is no such organization, with the employees' representatives².
Prohibitions during the reduced working time:
- The measure, together with the work schedule, its daily distribution and the related wage entitlements, shall be communicated to the employee at least 5 days before the actual implementation of the measure unless there is a change in the work schedule due to an increase in the employer's activity requiring additional staff or if it is necessary to replace an employee who is unable to work according to his or her work schedule. In the latter cases, notification shall be given at least 24 hours before the measure is actually implemented.
During the application of the reduced working time, the following are prohibited:
- the employment of staff to perform the same or similar activities as those performed by the employees whose working time has been reduced and the subcontracting of activities performed by the employees whose working time has been reduced.
The prohibition relates to the subsidiary, branch or another secondary establishment at which the measure applies.
By way of exception, it is permitted the employment of staff to replace the employees concerned by the measure, if their individual employment contract has been terminated de jure, by dismissal for reasons relating to the employee or by resignation;
Allowance granted during the reduced working time
- the granting of bonuses or other income in addition to the basic salary laid down in the contract, for persons providing management and/or administration of companies. These measures are taken after the reduced working time measure ends.
- Employees affected by the measure shall receive an allowance of 75% of the gross basic monthly wage for the reduced working hours. This allowance may be increased by the employer by a difference up to the level of the basic wage for the job held. However, this difference is not deductible3.
- The employer may order the reduced working time and may deduct the allowance if the following conditions are met cumulatively: (i) the measure affects at least 10% of the number of employees of the establishment and (ii) the reduction in activity is justified by a reduction in turnover in the month prior to the application of the measure or, at the most, in the month preceding the month prior to that, by at least 10% compared to the same month or compared to the monthly average turnover in the year prior to the declaration of the state of emergency/alert/emergency, i.e. 2019.
Payment of the allowance from the unemployment insurance budget
- In the case of a newly established company during the period of 1st January to 15th March 2020, which has at least one employee, the reduction shall be related to the turnover achieved in the month preceding the application of the reduced working time measure.
- In order to deduce the allowance mentioned before, the employer must submit a request to the employment agency of the county where the employer's registered office is located, accompanied by the following documents:
- a copy of the decision on the reduced working time and proof of its notification to the employees, by any means normally used by the employer to communicate with the employees;
- a statement of the employer that he/she meets the conditions provided for by law;
- copy of the agreement concluded with the trade union organizations entitled to negotiate the collective agreement at unit level/with the employees' representatives, or, where there is no trade union organization entitled to negotiate the collective agreement at unit level or employees' representatives if the case, the proof of the information of the employees;
- the list of persons to receive the allowance.
¹ As opposed to the 50% rate under the old regulation.
² In contrast to the old regulation, where the measure was ordered after prior information and consultation of the trade union, the employees' representatives or the employees, as the case may be.
According to the old regulation, "employees affected by the measure shall receive an allowance of 75% of the difference between the gross monthly basic salary stipulated in the individual employment contract and the gross monthly basic salary for the hours worked as a result of the reduced working time, in addition to the wages due for the time effectively worked.”