Further amendments to the Kurzarbeit Act. Working time can be reduced to 80%

In the Official Gazette, No 345 of 05 April 2021 (Part I), Law No 58/2021 (in force since 08.04.2021) was published for the approval of OUG No 211/2020.  It aims to prolong the application of social protection measures adopted in the context of the spread of SAR-CoV-2, as well as to amend OUG No 132/2020 on support measures for employees and employers in the context of the epidemiological situation caused by the spread of SAR-CoV-2, and to stimulate employment growth.

The main changes are:

• By way of derogation from the provisions of Article 112(1) of Law No 53/2003 – Labor Code, republished, as well as subsequent amendments and additions, in the case of temporary reduction of working time, caused by the establishment of the state of emergency/alert/siege, under the conditions of law, during the state of emergency/alert/siege, and for a period of up to 3 months from the date of the end of the last period during which the emergency/alert/siege was established, employers shall have the possibility of reducing the working time of employees by no more than 80 % of the daily, weekly or monthly period provided for in the individual contract of employment;
• Where there are trade unions entitled to negotiate the collective agreement at unit level as defined in the republished Social dialog Act No 62/2011, as amended and supplemented, or representatives of employees, the measure to reduce working time shall be taken by the employer with the agreement of the trade union organization entitled to negotiate the collective agreement or, where there is no such agreement, the representatives of the employees;
• The reduction in working time  shall be determined by decision of the employer, for a period of at least five working days, covered by the period of 30 calendar days, beginning on the first day of effective application of the measure. The reduction in working time shall also apply to shift-time work and to unequal working hours;
• The employer may amend the working hours whenever necessary, with an obligation to justify such a change;
• The employer’s decision on the reduction of the working time, the method of allocating it on days and the corresponding salary rights shall be communicated to the employee at least five days before the measure is actually implemented or by way of exception, at least 24 hours prior to the effective application of the measure, where replacement of the employee is required or where there is a change in working hours due to the increase in the workload;
• During the reduction in working time, the employees affected by this measure shall receive an allowance of 75 % of the gross monthly basic salary corresponding to the worked hours;
• Where the employer’s budget for the payment of staff expenses permits, the allowance may be supplemented by sums representing the difference up to the level of the basic salary corresponding to the place of employment, without this difference being liable to be settled;
• The allowance shall be borne by the employer in the staff expenditure chapter of the budget of income and expenditure thereof and shall be paid on the date of payment of the salary relating to the month in question, to be settled, not later than five days after the decision referred to in Article 1(4) has been issued, From the unemployment insurance budget, after the employer has fulfilled the declarative and payment obligations related to the wages and similar salaries of the period for which the claim is made, in accordance with the provisions of Law No 227/2015 on the fiscal Code, as amended and supplemented.  The procedure for the settlement of amounts shall be determined by decision of the Government;
• If the employer does not recover the allowance from the unemployment insurance budget, he shall not be entitled to recover it from the employee;
• The allowance shall represent income of an wage nature and shall be subject to taxation and social security contributions, in accordance with the provisions of the law.  For the purpose of calculating the income tax, the rules laid down in Article 78 (2) (a) of Law No 227/2015, as amended and supplemented, shall apply;
• During the period of application of the measure, it is prohibited:
  • the employment of staff for the performance of activities identical to or similar to those performed by employees whose working time has been reduced;
  • subcontracting the activities of employees whose working time has been reduced.  The prohibition relates at the level of the subsidiary, branch or other secondary establishment as defined in the republished Company Act No 31/1990, as amended and supplemented, at the level of which the measure applies;
  • the employer may not initiate collective redundancies;
  • employees affected by this measure may not carry out additional work with the same employer.
• By way of exception to the above provisions, it is permissible to engage in the replacement of employees whose scheme has been reduced if the termination of the individual employment contract takes place under the terms of Articles 56, 61 and 81 of Law No 53/2003, republished, with subsequent amendments and additions.

As a reminder, the employer may order the measure of reducing working time and request compensation if all of the following conditions are met:

• the measure affects at least 10 % of the number of employees of the unit;
• the reduction in activity is justified by a reduction in the turnover in the month preceding the application of the measure, or at the latest in the month preceding the month preceding the measure, by at least 10 % compared with the same month, or by the average monthly turnover in the year preceding the declaration of emergency/alert/siege, respectively 2019.  In the case of non-governmental organizations, as well as of employers in the category covered by Government Emergency Ordinance No 44/2008 on the carrying out of economic activities by authorized natural persons, individual enterprises and family enterprises, approved with modifications and additions by Law No 182/2016, the reduction shall relate to the income earned.

In the case of a company newly formed during the period 1 January to 15 March 2020 and having at least one employee, the reduction shall, by way of exception from the above provisions, relate to the turnover achieved in the month preceding the application of the measure.

Where the employer orders a reduction in working hours, bonuses or other earnings other than the basic salary fixed by the contract for persons responsible for the management and/or management of the companies, shall be made after the end of the period of application of the measure.

For the settlement of the allowance from the unemployment insurance budget, the employer must submit an application accompanied by the following documents:

• a copy of the decision relating to the reduction in working time and proof of its being brought to the attention of the employees by any means normally used by the employer to communicate with the employees;
• declaration on the employer’s own responsibility, showing the situation referred to in article 1 (16) (b);
• a copy of the agreement concluded in accordance with the provisions of article 1 (2) or, where appropriate, evidence of information of the employees, where there is no trade union organization entitled to negotiate a collective agreement at unit level or representatives of the employees;
• the list of persons to be eligible for the allowance referred to in article 1 (7);
• copy of documents on the payment of wages and salaries, showing the payment of the allowance.

The request for settlement and the said documents shall be submitted by the employer, in electronic or computer-readable form, by 25 of each month for payment of the allowance for the previous month, to the county employment agency and the municipality of Bucharest, in which it has its registered office.  Where the application is submitted by the employer at a date subsequent to that referred to above, the amount relating to the month for which the application is made shall be settled in the following month.

It is important to know that employers who are bankrupt, dissolved, liquidated or who have suspended activities CANNOT benefit from the provisions of the Kurzarbeit law.