The enactment of Government Emergency Ordinance no. 30/2020. Technical unemployment
The enactment of Government Emergency Ordinance no. 30/2020. Technical unemployment
The enactment of Government Emergency Ordinance no. 30/2020. Technical unemployment – furloughed workers
Considering the issuance of Romania’s President’s Decree no. 195/2020 establishing the state of emergency throughout the entire Romanian territory, on 18.03.2020, took place a Government meeting held up in teleconference system. During this meeting, the Romanian Government adopted the Emergency Ordinance no. 30/2020 for the amendment and completion of several 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 virus SARS-CoV-2. The normative act was published on 21.03.2020 in the Official Monitor of Romania Part I, no. 231.
One of the most important and relevant measures regulated by GEO no. 30/2020 refers to granting the employers with the possibility to make use of technical unemployment, which entails the temporary suspension of their activity, due to economic/technologic/structural or similar conditions, without making any redundancies or lay-offs.
In this respect, during the emergency state period established by Decree no. 195/2020 and considering the consequences determined by the spread of virus SARS-Cov-2, the employers, which were affected by being put into the position of disrupting or reducing their activity, may unilaterally suspend the on-going labour agreements, pursuant to Art 5 Para 1 letter c) from the Labour Code.
In order to access this protective measure – for both employers and employees, employers must fulfil one of the following conditions laid down in Art XI Para 2 of GEO, respectively:
1. Total or partial temporary disruption of the employer’s activity due to the decisions issued by the competent authorities, during the emergency state period. Also, the employer is required to obtain an emergency state certificate issued by the Ministry of Economics, Energy and Business Practices.
2. The employer’s activity has been reduced due to the consequences of the pandemic caused by COVID-19 and the employer cannot cover staff costs for all the employees. This condition shall be proved with a statement under the responsibility of the employer that, on the month prior to submitting the statement, the employer has registered a revenue decrease of minimum 25% as opposed to the average revenues obtained during January-February 2020, and cannot cover all staff costs. According to Art XIV of GEO, a statement form shall be provided by means of common order of minister of labour and social protection and minister of European funds.
The employers which fall into the category described at point 2 may benefit from the payment of the allowance for technical unemployment for at most 75% of the staff that have an on-going labour agreement at the moment the GEO enters into force. (21.03.2020)
The process of establishing which employer falls into which of the two above mentioned categories does not lack ambiguities and obscurities. Such problematic may occur, on one hand, due to the interpretation of the decisions issued by the competent authorities and, on the other hands, may concern the obtaining of the emergency certificate.
Firstly, the relevant decisions issued by the competent authorities referred to in the GEO are, until present, the Military Ordinance no. 1/2020, the Military Ordinance no. 2/2020 and, recently adopted, Military Ordinance no. 3/2020.
Military Ordinance no. 1/2020 regulates at Art 1 the suspension of serving and consuming food and alcoholic and non-alcoholic beverages organized in restaurants, hotels, cafes or other public places. Also, Art 2 states that all cultural, scientific, artistic, religious, sports, divertissement, gambling activities, spa treatments and personal care activities that take place in closed spaces are suspended.
Military Ordinance no. 2/2020 regulates the suspension of the activities performed in dental practices, as well as, the suspension of the activities of agribusiness traders of goods and services that perform their activity in commercial centers where more than one economic operator performs work. The activity of food retailers and of sale of veterinary or medicinal products and cleaning services are not suspended.
From the temporary suspension of the commercial activity carried out in the commercial centers in which several economic operators perform work, according to the Military Ordinance no. 3/2020, the following activities are excepted: (i) the sale of electronic and home appliances by economic operators who ensure delivery to the buyer’s home/office; (ii) sale of medical optics products and services.
Military Ordinance no. 3/2020 also regulates the suspension of all flights performed by air operators to France and Germany and from France and Germany to Romania, from all airports in Romania, for a period of 14 days. The measure does not apply to flights made with state aircraft, freight and mail, humanitarian or emergency medical services, as well as to non-commercial technical authorizations. The measure applies from March 25, 2020, at 23.00, Romania time.
Secondly, as concerns the obtaining of an emergency state certificate, according to Art 12 of Decree no. 195/2020, the Ministry of Economics, Energy and Business Practices issues, upon the request of the companies that have been affected by COVID-19, the emergency state certificate based upon documented proof – as previously described in an article https://www.juridice.ro/676612/acordarea-certificatelor-de-situatie-de-urgenta-csu.html.
Therefore, the Ministry of Economics, Energy, Business Practices issued the Order no. 791/2020 regarding the issuance of the emergency state certificates (ESC) by the Ministry of Economics, Energy, Business Practices, upon the request of economic operators that have been affected by COVID-19 published in the Official Monitor of Romania no. 248/25.03.2020 (“Order no. 791/2020”).
According to Order no. 791/2020, the request for obtaining the emergency state certificate shall be submitted online, by uploading on the platform http://prevenire.gov.ro/. The issuance of the certificate shall be made automatically, online, after the system validates the request.
Also, Order no. 791/2020 regulates the submission of two types of emergency state certificates: (i) TYPE 1 (BLUE) – for the applicants which request the certificate based upon a statement under the applicant’s responsibility that their activity was temporarily disrupt, totally or partially, due to decisions enforced by the competent authorities, according to the law, during the emergency state period; (ii) TYPE 2 (YELLOW) – for the applicants which request the certificate based upon a statement under the applicant’s responsibility that they had registered a revenue decrease of minimum 25% as opposed to the average revenues obtained during January-February 2020.
It results that the emergency state certificate is issued for both (i) employers which were forced to temporarily disrupt, totally or partially, their activity, due to the measures enforced by the competent authorities, and (ii) employers which reduced their activity and had registered a revenue decrease of minimum as opposed to the average revenues obtained during January-February 2020.
In this respect, we note a non-correlation with the provisions of art. XI of GEO no. 30/2020, which do not regulate upon the obtaining of the emergency state certificate by the economic operators included in the second category as mentioned above.
As regards the mechanism of the technical unemployment scheme, according to Art 52 Para 1 letter c) of the Labour Code, due to the consequences determined by the Coronavirus SARS-CoV-2, the employer issues a decision suspending the on-going labour agreements; such decision shall be communicated to the employees.
During the emergency state period established by Decree no. 195/2020, while the labour agreement is suspend by will of the employer, the employees of the company which meets the conditions set forth above, benefit of an allowance.
One important aspect related to the allowance regards its amount. In this respect, the GEO provisions set forth that the amount of the allowance is 75% of base salary corresponding to the occupied job. However, the state shall cover from unemployment security funds at most 75% from the medium wage salary established for year 2020 by Law no. 6/2020 regarding the budget of social security funds.
The allowance is not exempt from the withholding and payment of income tax, the state social insurance contribution and the social health insurance contribution. The statement regarding the payment obligations shall be submitted according to art. 147 of Law no. 227/2015 regarding the Fiscal Code, the payment being made by the employer from the allowances received from the unemployment insurance budget on the 25th of the month following the month in which the payment is made. It is also necessary to mention that according to art. XI paragraph (8) of the GEO, no insurance contribution for work is owed.
Appendix no. 1, 2 and 3 of the GEO are represented by claim forms for the refunding of the allowances, as well as the list forms concerning the employees whose labour agreements are to be suspended. These forms state the need for the submission of the emergency state certificate/the statement under the responsibility of the applicant. Such documents must be submitted to the County/ Bucharest Employment Agency.
Art XII of GEO states that these documents must be submitted throughout email at the agencies located in the area where the employers have their registered offices. The documents shall be submitted in the on-going month for the payment of the allowance corresponding to the prior month, as per Art XIII from GEO.
Moreover, the GEO also provides that the professionals, as regulated by Law no. 287/2009 regarding the Civil Code which do not have the status of employers and interrupt their activity totally or partially based on the decisions of the authorities taken in the context of the emergency state, receive an allowance equal to the gross basic wage in the country guaranteed in payment established for 2020; such allowances shall be borne by the by the general consolidated budget.
Finally, it can be concluded that the legislature focuses on ensuring prevention, so as to avoid a significant number of redundancies by providing financial support to employees in technical unemployment. Regarding the way of implementing this solution, in practice certain problems can be prefigured, derived, in particular, from the payment and refunding of the monthly allowance by the employer.