Given the latest development, our ŠunjkaLaw Employment team compiled a shortlist of practical questions and guidelines for your businesses in situation of extraordinary state of emergency declared by government and will be periodically updating the list of questions and answers.
1 – My business has to close down because of the decision of the government. What about my employees?
a) Full cessation of business activities
In case of a complete cessation of business activities, you have several options at your disposal.
First one being sending your employees to paid leave, during which they are entitled to a remuneration of their salary in the amount of 60% of the average salary each employee made during past 12 months. This of course is not popular for many business owners having in mind that with cessation of business activities, all incomes have also been stopped.
Second option is to send your employees to holiday, which also brings an obligation for business owners to continue paying salaries regularly.
Third option and most attractive for business owners probably, require the consent of your employees – this is unpaid leave which can be only granted by employer, but employer cannot force employees to take unpaid leave.
What may also be considered is consensual termination of employment, which also cannot be forced onto employees by employer.
Finally, if the continuance of work is not possible and the company is to cease to exist, the employment for all of the employees will be terminated in accordance with the Law by deleting the company from the Business Registers Agency.
b) Partial cessation of business activities
For businesses that are forced to partially close, but can still deliver limited services (e.g. food delivery), please see under point 2 of this Q&A.
2 – My business is not under a mandatory measure to close, but suffers from significant reduction in income due to disturbance on the market. What are my options vis a vis employees?
a) Reduction of salaries due to disturbance in business operations
If your employees are working and you have no intention of sending them to paid leave, but want to focus on continuing the work, but have a significant drop in your income, you may consider a reduction of salary, i.e. introduction of minimum salaries where deemed necessary.
Your only limit in reducing salaries is prescribed minimum salary, what means that if employee has hypothetical salary of 40.000 RSD, you cannot reduce it for 50%, since it would go under the legally prescribed minimum salary. Therefore in these kinds of cases, you can reduce the salary only to the amount of legally prescribed minimum salary. In other cases, you can apply reduction of 50%.
We can of course assist you in execution of any of these options.
b) Declaring part of your employees as redundant in a procedure of reorganization of your business operations
In case that the reduction of salaries is not sufficient measure, what you can consider is declaring part of employees redundant in legally prescribed procedure. At the moment, there have been no amendments or prohibitions in this respect, so the standard regime redundancy procedure is still applicable.
If this option is exercised, make sure that the reorganization procedure is transparent and realistic and not fictive. Reorganization procedure must be explained in detail and arguments with proper evidence and reasons.
Also, other essential part of this procedure is criteria on declaring employees redundant which must be transparent, non-discriminatory and non-arbitrary.
If this option is exercised, the employees which have been made redundant are entitled to compensation from the National Employment Service, as well as to the health insurance over National Employment Service, all in accordance with their years of employment with their last employer.
3 – Can the employer force its employees to work from home?
According to the Decree on organizing work of employers during extraordinary state of emergency (hereinafter referred to as Decree), employers are obliged to introduce as much as possible work from home for their employees, provided that organizational capacities and nature of work allow such possibility.
Considering that the work from home is introduced by general decision of the employer and resolution for each of the employees directed to perform work from home (and not via annex to the employment contract as in regular state), employee does not have the possibility to reject this order of the employer. It should be noted that this is the case where employers do not have a homework policy in place yet.
If the employer has a remote work policy in place already, you could refer to the individual employment contract and the company’s remote work policy.
Employer must provide necessary tools to employees working remotely to carry out their job (laptop, access to information and documents, etc.).
4 – If I cannot organize work from home for employees, can I organize conducting of work operations in some other manner?
Yes – the purpose and intent of the Decree is to reduce the presence of the employees at the workplace in order to reduce the possibility of spreading the virus.
The Decree foresees the work from home only in cases where the organizational capacities and nature of work allow this (in most cases this will be applied to white collar workers).
Possible options to consider are conducting work in shifts (as foreseen under the Decree) or potentially work in rotations (e.g. every employee is obliged to work every third day).
5 – Is employee entitled to remuneration of salary if he is obliged to self-isolate?
This is one of the most problematic questions in practice.
Employee is entitled to remuneration of the salary in case of self-isolation only in case that employee has received a written order of the health authority for self-isolation according to what can currently be understood from the instructions of competent authorities.
On the other hand, if the employee does not come to work, nor provides employer with the confirmation of being prevented to carry out work due to health reasons, the employee will not be able to receive the salary either, since the salary is payable only in case the employee carries out the work in accordance with the employment contract. However, even in case that the salary has not been paid to the employee, there remains the obligation of the employer to calculate and pay accessing tax and obligatory social contributions – for unemployment, health and pension.
It is possible that the Government or other competent authority will change this as the number of people which are ordered to remain in self-isolation increases.
6 – Can the employer force its employees to perform health screenings?
Employer is, under the Employment Law, obliged to provide healthy and safe working environment and is therefore responsible for the health of his employees.
Also, in accordance with the Law on Safety and Health at Workplace, Employer is authorized to conduct preventive measures in order to protect the health of his employees, including but not limiting to directing employee to perform necessary health screenings in case of doubt whether the employee in question has contracted the COVID-19.
What needs to be considered in this respect is the right of the employee to privacy and protection of his health and employment records along with any information regarding the results of the performed screenings.
7 – Are employees with children under the age of 12 entitled to work from home?
There is only recommendation for the people with children to be enabled by their employers to work from home. Considering that this is just a recommendation, it is not compulsory and therefore there is no legal prohibition for employers to request from these employees to continue working, especially where the nature of the work is not such that it can be performed from home – such as workers in bakeries, on petrol stations, generally any kind of blue collar work.
Employer and employee can agree to use remaining days of vacation or unpaid leave, but this requires the employee’s consent.