by Dumitru Loredana-Marlen, Junior Lawyer and Ana Maria Calancea, Fully Qualified Lawyers at CA Luca Mihai-Cătălin
Considering that, in the context of the prevention of Covid-19 cases, starting with 18.03.2020, the economic operators that operate traditional gambling and slot-machines suspend their activity throughout the period of emergency state, and having regard to the difficulties that both operators and their employees face during this period, on this occasion, we intend to inform you about the main legal instruments that the Labor Code regulations make available to all employers affected by this period.
In support of the gambling operators affected, in the following we will review the main solutions regulated by labor law, focusing on the procedure of the so-called technical unemployment and the main difficulties that it raises economically.
Thus, for the hypothesis in which the economic operator could prove that following the declaration of emergency and the suspension of his activity, he is in a situation of force majeure, The Labor Code provides solutions that take into account the specificity of the work performed by the employee, without departing, on the other hand, from the characteristics of the force majeure.
A first alternative available to the gambling operators obliged to suspend their activity in the next period is regulated in the art. 48 of the Labor Code. Thus, the provisions of art. 48 stipulate that the employer may temporarily change the place and manner of work, without the employee’s consent:
- in case of force majeure situation;
- as a measure of employee protection.
In this hypothesis, by “force majeure” we mean that absolutely unpredictable event that makes impossible to carry out work relations in the established workplace, but the employee can continue his work in another location, such as at home (this is the assumption of the administrative staff, for example, that he could continue to work from home).
We mention that in the context of the COVID-19 epidemic, employers are encouraged by the Ministry of Labor to ask their employees to carry out their activity by teleworking, in the case of employees who use the information and communication technology to fulfill their tasks, respectively by working at home for employees who hold a job compatible with such work.
It is important to mention that for the entire duration of the unilateral change of the location and way of working, the wage rights of the employees remain unchanged.
For the hypothesis that the work performed by the employee is not compatible with such a change in the conditions of working relationships, the other solution can be found in the content of art. 50 let. f), which regulates the legal suspension of the individual employment contract in case of force majeure.
In our opinion, the delimitation between the unilateral change of the location and way of working and the legal suspension of the individual employment contract, as a result of the force majeure, should be done as follows: If the force majeure determines the impossibility of the employee performing the service tasks, then the employer may establish the legal suspension of the individual employment contract. If the work specificity allows to perform the job duties from another location/or in another way, then the employer can unilaterally decide to change the workplace and/or the way of working, by his decision to ask the employee to work from home, for example.
Even if it is clear from the regulation that the suspension of the individual employment contract occurs automatically, by the mere appearance of the reason of suspension, we considered that, in practice, several conditions must be met.
Specifically, an employer that claims force majeure must firstly assess is he can prove force majeure. With this purpose, the employer must verify whether the event was declared as such by a document issued by the public authorities, if it is possible to prove the unpredictability of the event, if the state of emergency invoked represents a specific danger to the life/health of the employees.
We also appreciate that, for practical reasons, in this case, the employer must issue, at internal level, a declaration of the situation, a decision that must be communicated to the employees concerned.
In accordance with the provisions of art. 49 paragraph (2) of the Labor Code, the suspension of the individual labor contract has the effect of suspending the provision of work by the employee and the payment of salary rights by the employer.
Considering that, on the one hand, it is difficult to prove the events of force majeure in practice, and on the other hand, employees efforts to overcome such a difficult period in the event of the employer suspending payment of salary rights, we consider that this approach should be avoided, where possible.
An alternative for the suspension of individual labor contracts in case of force majeure, which drew our attention during this period and which seems to take into account both the interests of the employer and those of the employees, is represented by the so-called Technical Unemployment.
Thus, according to the provisions of art. 52 paragraph (1) let. c) from the Labor Code the individual labor contract may be suspended at the initiative of the employer in case of temporary interruption or reduction of activity, without ceasing employment relationship, for economic, technological, structural or similar reasons.
We believe that the suspension of the activity of several economic operators during this period, as a result of the issuance of the Military Ordinance no. 1/18.03.2020, is in accordance with the hypothesis of the indicated text of law, the interruption of activity operating in this case under the law, as a natural consequence of the measures taken.
We mention that in the situation of the administrative personnel of the companies that carry out gambling activities, in respect of which the employer has decided that it can perform activity during the state of emergency, it is possible to reduce the work program.
We remind that, in accordance with the provisions of art. 52 paragraph (3) of the labor law, during the temporary reduction of activity, for economic, technological and structural or similar reasons, for periods exceeding 30 days, the employer can reduce the working week from 5 days to 4 days, with the corresponding reduction of the salary until the situation that caused the program reduction has been remedied.
The provisions cited concern only the hypothesis of the reduction of activity (not its interruption), specifying unequivocally the reasons that determine these reductions (economic, technological, structural or similar), reasons that produce their effects for a period of at least 30 days.
The legislature did not leave to the employer the power to decide how to reduce the activity, which means that there is no alternative to reducing the work schedule, for example 5 days a week, at 7 hours a day.
With regard to the salary rights of the employees whose work hours have been reduced, we mention that they do not cumulate with the allowance provided in art. 53 paragraph (1) of the Labor Code, they still benefit from salary rights, reduced accordingly to the new work program.
In contrast, in the case of staff whose work tasks are performed at work points, whose activity will be discontinued during the emergency period, the employer may opt for the suspension of employment contracts.
In case the employer decides to suspend the individual employment contracts in accordance with art. 53 paragraph (1) let. c) it is useful for the employer to issue a decision (provision, order, etc.) by which:
- to order the suspension of individual employment contracts;
- to specify the legal basis;
- to mention the duration (period) of the suspension (the deadline by which it shall take effects).
- the deadline within which the employee can appeal the decision.
The decision regarding the suspension of the individual employment contracts of the employees must be communicated to the employees concerned, and finally, the mention regarding the suspension of the individual employment contracts should be registered also in Revisal, specifying the period, the causes of suspension and the date of ceasing the suspension of the individual employment contract.
These data will be transmitted to the Territorial Labor Inspectorate at the latest on the day before the date of suspension.
Thus, it will be completed in Revisal:
- The starting date of the suspension (is the date from which the individual labor contract was suspended according to the decision of suspension);
- The end date of the suspension (it is the date until the employee was suspended the individual labor contract according to the deadline established by the suspension decision).
During the temporary interruption of the activity, the employees involved in the reduced or interrupted activity, who do not work anymore, receive an allowance, paid from the salary fund, which can not be less than 75% of the corresponding basic salary.
The difficulties involved in this case, the technical unemployment, given the current economic context generated by the suspension of traditional gambling throughout Romania as a result of the establishment of the state of emergency, are represented by the fact that in the absence of incomes during this period, the compensation of 75% of the basic salary due to the employees, from the salary fund, will become a burden on the employers.
In support of the economic operators affected by the effects of the state of emergency and of the measures ordered accordingly, the Government approved the Emergency Ordinance for the modification and completion of some normative acts, as well as for establishing measures in the field of social protection in the context of the epidemiological situation determined by the spread of the SARS-CoV-2 coronavirus (hereinafter referred to as the Ordinance).
The ordinance was published in the Official Monitor on 21.03.2020 and, regarding the technical unemployment, in the content of art. XI of the Ordinance, the Government has established that during the state of emergency, for the period of suspension of the individual employment contract at the initiative of the employer, in case of temporary interruption of the activity, the allowance that the employees benefit will be borne from the unemployment insurance budget.
The level of the allowance will be at least 75% of the basic salary corresponding to the occupied job paid from the salary fund, but not more than 75% of the gross average wage provided by Law no. 6/2020 regarding the state social insurance budget for 2020, respectively 5,429 lei.
Of these facilities will benefit employers who meet one of the following CONDITIONS:
- Interrupt the activity in whole or in part based on the decisions issued by the competent public authorities according to the law, during the period of emergency state decreed and hold the Certificate of emergency situations issued by the Ministry of Economy, Energy and Business Environment.
- They reduce the activity due to the effects of the COVID-19 epidemic and they do not have the financial capacity to pay all the salaries of their employees.
Employers who reduce their activity as a result of the effects of the COVID-19 epidemic can benefit from the payment of compensation for up to 75% of the employees who have individual active employment contracts at the date of entry into force of the ordinance, respectively 21 March 2020.
For these employers the payment of allowances will be made on the basis of a declaration on their own responsibility stating that they register a decrease of the receipts from the month before the filing of the declaration by at least 25% compared to the average of the incomes from January-February 2020, and that they do not have the financial capacity to pay all the employees.
Since traditional gambling is suspended for the entire period of the emergency, we believe that gambling organizers fall under the first hypothesis of the law, they belong to the category of employers directly affected as a result of the decree of the state of emergency, being, consequently, forced to interrupt their activity throughout this period.
However, in both cases, the unemployment benefit is subject to taxation and payment of compulsory social contributions.
The calculation, withholding and payment of the income tax, the state social insurance contribution and the health insurance contribution are made by the employer from the benefits received from the unemployment insurance budget.
The DEADLINE for payment and declaration of the tax obligations mentioned above is the date of 25, inclusive, of the month following the month in which the payment is made from the unemployment insurance budget.
Thus, interpreting the new legal provisions, it results, at least from our point of view, that these contributions will not be borne by the employer from his own funds, following that they will be calculated, withheld and paid by him after obtaining from the budget of unemployment insurance benefits.
Also, the allowances do not require insurance contribution for the work.
Regarding the PROCEDURE for obtaining the allowances, according to the provisions of art. XII of the Ordinance, the employers submit, by e-mail, at the agencies for employment of the county, as well as of the municipality of Bucharest, depending on the location of their headquarters, a request signed and dated by the legal representative, accompanied by the list of persons who will benefit from this allowance, assumed by the legal representative of the employer in accordance with the model provided by the annex no.3 to the Ordinance.
In order to grant the allowances, the Applications will be prepared for the economic operators who interrupt their activity during the state of emergency according to the model provided in annex no.1 to the Ordinance, and for the economic operators that reduce their activity, according to the model provided by the annex no.2 to the Ordinance.
The legal provisions establish that the payment of these amounts is made on the basis of the application signed and dated by the legal representative, submitted by electronic mail, to the agencies for employment of the county, as well as of the municipality of Bucharest, depending on the location of their registered office.
The documents mentioned above are submitted to the employment agencies in the current month for payment of the previous month’s allowance.
According to the new legal provisions, the payment of the allowance is made within a maximum of 30 days from the documents submission.
Regarding obtaining the Certificate of emergency situations issued by the Ministry of Economy, Energy and Business Environment, according to art. 12 of the Decree 195/2020 establishing the state of emergency, it is issued to the employers based on the supporting documents.
In conclusion, we are confident and convinced that both as a result of the efforts of the gambling organizers, which are more than obvious at the moment, and as a result of the support given by the state authorities in these difficult times to the affected economic operators, we will identify optimal solutions, which will allow that after the cessation of the state of emergency, the organization and operation of gambling to be carried out under the same conditions as those before the suspension of activity.