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            COVID-19: The key challenges facing employers across the globe

            As employers across the globe come to terms with the impact of the COVID-19 pandemic, we take a look at the key challenges facing employers in a range of jurisdictions across the world. 

            The pandemic has had an unprecedented impact globally. In this update we provide an overview of employer perspectives around the world and an insight into the different responses, from government support to the emerging employment law issues. 

            Nearly all employers will have been affected by the impact that the COVID-19 pandemic is having on global and national markets; there is a lack of certainty over the time it will take for the crisis to be resolved and there exists a threat of a global recession. Employers in every sector face their own challenges as a result of the current crisis

            In order to review the challenges that employers around the world are expected to face in the coming months, we have asked four key questions: 

            1. What state-sponsored support is there for employers and their workforce during the global COVID-19 crisis?
            2. What are the main challenges facing employers and how are they responding?
            3. How are employers applying the local laws on holidays during lockdown?
            4. What are the main employment law challenges and emerging themes as conditions return to normal?

            Click on a region below to understand how different jurisdictions are impacted so you can ensure your business is compliant and you are accessing relevant government support.

            If you have any questions or would like advice on your global employment law strategy please get in touch > 

            Australia

            Australia


            1.What state-sponsored support is there for employers and their workforce during the global COVID-19 crisis?

            The main change the Federal Government has made is making the "JobKeeper" payment available for eligible employers whereby the Government will pay employers $1,500 per fortnight for each eligible employee to support their employment. This has been coupled with changes to the Fair Work Act 2009 which enable, for example, eligible employers to direct employees to reduce their hours so they are entitled to receive no more than $1,500 per fortnight based on their usual rate of pay. Eligible employers can also direct employees to perform different duties or to perform duties at a different place and can also request employees to perform their duties on different days or times.  These measures are in place until 27 September 2020.

            2. What are the main challenges facing employers and how are they responding?

            Reduction in revenue (or restrictions by the Government on businesses to contain the virus) have forced employers to consider:

            Asking employees to take leave without pay.
            Reducing their employees' hours.
            Standing down staff without pay under relevant instruments.
            Requiring or asking staff to take annual leave or long service leave.

            The JobKeeper payment has also enabled business to put strategies in place to keep the business operational in circumstances where that may have been difficult without the JobKeeper payment. 

            3. How are employers applying the local laws on holidays during lockdown?

            Generally, under the Fair Work Act 2009 employers can:

            Direct award and enterprise agreement free employees to take annual leave if the direction is reasonable.
            Direct award and enterprise agreement free employees to take annual leave in accordance with the terms of those instruments.
            (If they are an eligible employer) reach an agreement with an eligible employee to take annual leave at half pay.

            Directions or requests to take such leave have been commonplace.

            4. What are the main employment law challenges and emerging themes as conditions return to normal?

            Employers under economic pressure in recent times may have made decisions regarding their staff in haste, without due consideration or without adequate resources. We expect to see some of those decisions, especially termination decisions, challenged by disgruntled employees who may struggle to find alternative employment in the current environment. This may manifest in increases in:

            Unfair dismissal applications.
            General protections applications.
            Workers' compensation claims.

            As conditions improve, employers may also have to unravel the employment structures they have temporarily put in place to overcome the economic hardships visited upon them by the virus.

            People

            Matthew Smith

            • Principal Lawyer // Head of Employment, Safety & Regulatory (Australia)

            Mark Curran

            • Principal Lawyer
            France

            France


            1. What state-sponsored support is there for employers and their workforce during the global COVID-19 crisis?

            The government has established various financial aid programs, such as the deferral of the payment of social contributions, taxes, loans guaranteed by the State, etc. but the most important one was changing the laws on short-time work.

            Short-time work is the partial or complete reduction of working hours with a corresponding reduction in remuneration. 
            Employers pay up to 70% of the employees' gross remuneration, which corresponds to 84% of the net remuneration.
            The French Payment Agency reimburses this amount to the employers (with a limit of €6,924 per employee), within 10 days.
            The employee's missing earnings are either spontaneously paid by the employer, or lost.
            The short-time work indemnity is almost not subject to social contributions, this is why the net amount is higher than the gross amount.
            If the employer wants to pay the difference between the full salary and the 70% reimbursed by the State, this delta is not subject to social contributions either, provided an in-house agreement or a unilateral decision of the employer is entered into or drafted.
            The request for short-time work must be made through the administration platform, with a detailed explanation of the reasons for the reduction in work and the processes that the employer is willing to put in place for the remaining level of activity.
            The request can be made up to 30 days after the beginning of the short-time work.
            Some employees may be in full-time short-time work, whilst others may only have a reduction in their working time. 
            The administration provides an answer to the short-time work request within 48 hours. If the short-time work is accepted, it automatically applies to employees, an addendum to the employees' contract is not required. The short-time work does not require the prior acceptance of each employee.
            The duration of the short-time period can be up to 12 months, but at the moment, if the short-time work is linked to the health crisis, the first request should last until 30 June 2020. A renewal will be possible after 30 June 2020.

            2. What are the main challenges facing employers and how are they responding?

            The main challenges are:

            Adapting to the regulatory modifications of the short-time work, with new rules issued at the end of March.
            Understanding the level of reimbursement and the potential beneficiaries of short-time work (top managers, managers under a working time package in days per year, part-time employees, etc.).
            Precisely forecasting the level of activity that will determine the level of short-time work, per group of employees.
            Dealing with a multitude of legally relevant issues at the same time (employees, customers, suppliers, investors, finance partners, leases etc.).
            Changing the structure of work (e.g. remote working instead of office work; flexible working).
            Organising the IT system for all employees working from home (equipment, software, etc.).
            Dealing with infected employees/fear of infection/fear of virus existence given the employer's obligation to protect the employees' health.
            Articulating sick leave for child care and short-time work.
            Monitoring work whilst working from home.

            We envisage that employers will need to address the legal and organisational challenges involved post-lockdown in phases:

            Information phase: gathering answers to the completely new challenges and what the legal implications are (such as what to do in case of an infection of employees; which measures can be taken in general; how to deal with business travel; can employees be terminated for operational reasons; questions around remuneration).
            Taking action phase: Changing the organisation of work (work on IT infrastructure; sending employees to the home office etc.), applying for short-time work/financial aids, dealing with the information and consultation of the works council.
            Observation and implementation phase: Observe the daily changing developments, implement changes and follow-up with the staff representatives.
            Preparation phase: Prepare for post-lockdown.

            3. How are employers applying the local laws on holidays during lockdown?

            We experienced different questions regarding holiday:

            Can employers force employees to take holidays?

            o No, except if the employee has already requested to take holidays, as in such case the employer can change the dates of the holidays.

            o No, except with an in-house agreement, signed either with unions (if any) or the works council, within the limits of 6 days in a row.

            o In practice, it may be at the employee's advantage to take holidays during short-time work, as the employee will be paid an indemnity that corresponds to the full salary, whilst the short-time indemnity is limited to 70% of the gross remuneration. This information may prompt employees to take holiday but it may have a direct impact on the company's cash flow, so some employers are not keen to encourage a lot of employees to take holidays.

            Can employers force employees to take days off?

            o Days off correspond to the counterpart to overtime, i.e. time off granted as a compensation to overtime.

            o Yes, employers can force employees to take up to 10 days off.

            o The decision can be made by the employer without any consultation of the works council or agreement with unions.

            Can employees take holidays during the short-time work?

            o Yes, it suspends the short-time work.

            o Employees are paid an indemnity corresponding to their full salary.

            If holidays are not taken before the end of the holiday period, are they lost?

            o Yes, they are not carried forward as the employee was allowed to take holidays, even during the short-time work/lockdown for employees who work from home. 

            o However, in practice some employers decide to carry forward untaken holidays as the government position in this respect was unclear for several weeks, so some employees did not take the holiday they were entitled to.

            Can employees withdraw approved holiday?

            o No, the employee is bound to approved holiday.

            4. What are the main employment law challenges and emerging themes as conditions return to normal?

            The main employment law issues and emerging themes arising could be:

            Return to work processes, including consultation with the works council in this respect.
            Extension of the short-time work, limits and conditions.
            Assessment of the administration to check if the conditions of the short-time work were satisfied, risks of sanctions if misuse of the short-time work.
            Potential restructuring where needed, impact of the short-time work on the business case that would justify collective terminations, reluctance of the administration to approve (if required) the dismissal procedure.
            Implementing future measures to be prepared for a potential second infection wave:

            o Regulations on notification, access and monitoring systems.
            o Technical solutions to deal with infected employees.

            Back-up plan for a second infection wave and a second lock-down in order to be prepared and able to act quicker.

            People

            Germany

            Germany


            1. What state-sponsored support is there for employers and their workforce during the global COVID-19 crisis?

            The government has established various financial aid programs (such as immediate payments for small companies; loans; tax measures etc.), but the most important one was changing the laws on short-time work on 13 March 2020.

            Short-time work is the partial or complete reduction of working hours with a corresponding reduction in remuneration. 
            The employees' missing earnings can be partially reimbursed through the short-time work compensation paid by the Federal Employment Agency. 
            The short-time work compensation amounts to 60-67% of the lump sum net salary difference between the regular net income (based on a maximum amount of EUR 6,900 gross) and the reduced net income.
            The Federal Employment Agency can pay social security contributions in full. 
            Short-time work requires a considerable loss of working hours due to economic reasons or an unavoidable event. The loss of working hours must be temporary and unavoidable (possibly required is the reduction of overtime and residual holiday from 2019). This applies in particular to a (partial) shutdown of the operation due to the COVID-19 crisis (e.g. due to order reductions, activity bans, quarantines).
            The loss of work must reach a certain minimum level. According to the current legal situation, 10% of the employees of an operational unit or a part of an operational unit must be affected by a loss of earnings amounting to more than 10% of their monthly gross income.
            The implementation of short-time work requires a legal basis. This can result from a collective bargaining agreement, a works agreement or an agreement with the employee. In this respect, please review your employment contracts to check if they already provide a corresponding provision.
            The statutory period of remuneration for short-time work is currently 12 months. This period can be extended to up to 24 months. 
            Procedure:

            o As a first step, the employer must notify the Federal Employment Agency of the loss of working hours and the implementing of short-time work in writing or electronically. This notification can be made by using a form provided by the Federal Employment Agency. The employer (after receiving information from the employment agency) calculates the short-time working allowance and pays it out to the employees. 
            o As a second step, the employer must submit an application for a reimbursement of short-time work compensation within a cut-off period of three months. 

            2. What are the main challenges facing employers and how are they responding?

             The main challenges are:

            Dealing with a multitude of legally relevant issues at the same time (employees, customers, suppliers, investors, finance partners, leases etc.).
            Economic difficulties because of a decline in/lack of orders.
            Interruption/break down of supply chains because of closed borders.
            Need to change the structure of work (e.g. mobile working instead of office work; flexible working).
            Closure of businesses and other institutions (restaurants, hotels, gyms, hairdressers, retail; shops; aviation; schools/kindergartens).
            Dealing with infected employees/fear of infection/fear of virus existence.

            We envisage that employers will need to address the legal and organisational challenges involved post-lockdown in phases:

            Information phase: gathering answers to the completely new challenges and what the legal implications are (such as what to do in case of an infection of employees; which measures can be taken in general; how to deal with business travel; can employees be terminated for operational reasons; questions around remuneration).
            Taking action phase: Change the organisation of work (working on IT infrastructure; sending employees to the home office etc.), applying for short-time work/ financial aids, negotiations and conclusion of agreements with works councils and employees.
            Observation and implementation phase: Observe the almost daily changing developments and implement changes (e.g. health and safety measures such as ordering employees to wear masks but we also saw single lawsuits against the measures taken by the government).
            Preparation phase: Prepare for post-lockdown. 

            3. How are employers applying the local laws on holidays during lockdown?

             We experienced different questions regarding holiday becoming relevant during the different phases of the pandemic:

            During the first phase of the pandemic questions came up on what is legally permissible in terms of holiday.

            o Can employers ask employees to take unpaid leave? Can employers impose compulsory holiday/ furlough?

            • Demanding (unilaterally) that employees take unpaid holiday is in principle not possible as the employer bears to risk of operation (Sec. 615 S.3 BGB, Civil Code) and therefore needs to continue to pay the employees.
            • Unilaterally ordering compulsory holiday/ furlough is also problematic as the employer needs to consider the employee's holiday requests according to Sec. 7 para 1 BUrlG, Federal Vacation Act. When push comes to shove it could be that the courts consider the holiday was not taken so the employees are still entitled to an unreduced amount of holiday.

            o Can employers order company holidays?

            • Company holiday is the closure of the business for a certain period of time during which the employees are requested to use their holiday entitlement. 
            • It is questionable if the COVID-19 crisis constitutes an urgent operational concern that allows such company holiday.
            • If a works council exists, its co-determination rights would have to be observed. 
            • In companies without a works council this is basically possible if there is an urgent operational need:

            Urgent operational needs are that companies cannot open the business because of a shut-down by the authorities (e.g. like currently the case for restaurants). This will not be the case for all companies; for others, an urgent operational reason could be a massive reduction in orders that endangers the company's existence. Mere disturbances of the operation, a decrease in orders or a temporary lack of utilisation usually do not count as such a reason. This can be seen differently if the employer intends to prevent all employees from taking holiday after the crisis at the same time. An imminent understaffing is recognised as an urgent operational reason that can be countered by the employee's individual request for leave.
            Furthermore it is not clear how many days of leave could be ordered. According to (not current) case law this could be up to a limit of 3/5 of the annual holiday (e.g. in case of 30 holiday days this equals 18 days). Finally, there needs to be a reasonable notification period of usually between 5 days to 2 weeks, given the current situation it is likely that the courts will accept a shorter notification period.
            Subject to any contractual arrangements it is possible that employers will require employees to take paid time off in lieu of their accrued overtime hours.

            Mainly it is recommended to speak with the employees and look for mutual flexible solutions on how to deal with the crisis. Employers should openly communicate the current situation and developments to the employees to make them aware of the complications and to openly discuss with the employees on what measures can be taken so that both sides benefit from it in the future and to avoid terminations. 

            In/ before the ramp-up phase, different questions are discussed:

            o Can employers withdraw holiday that was already approved?

            It is not possible that an employer withdraws holiday that was already approved. 
            However, exceptional situations are conceivable in which an emergency necessitates the employee's employment and the employer is threatened with unreasonable disadvantages if the employee continues to take the holiday. In such cases, the possibility of a "revocation" has already been discussed by courts in isolated cases, but the details remain unclear. Employers should therefore give priority to reaching an amicable agreement on the postponement of leave.

            o Can employees withdraw approved holiday?

            No, the employee is bound to their approved holiday.
            This also applies if planned holidays cannot be taken as a result of travel restrictions. If an employee wants to postpone his or her already approved holiday, he or she must obtain the employer's consent.

            o What are the impacts of quarantine on approved holiday?

            If an employee has to go into domestic quarantine due to an official order and is actually ill, the period of incapacity for work is not credited against the annual leave (§ 9 BurlG). The employee therefore retains his or her holiday entitlement. 
            If, however, the employee is still able to work in quarantine, there are several arguments in favour of taking the holiday that has already been agreed- despite the lack of case law on this subject: just as with travel restrictions, the employer is not responsible for other "disruptive" events (such as quarantine) during the holiday period and therefore does not have to re-grant the holiday.

            4. What are the main employment law challenges and emerging themes as conditions return to normal?

             The main employment law issues and emerging themes arising could be:

            Factual evaluation of the measures implemented during the crisis:

            o Stop the measures and replace them if necessary.
            o Continue the measures permanently (hygiene measures; home office; split-teams) if they are still required / if there is potential for synergies. 

            Legal review of the implemented measures if they should be continued to be used (e.g. compliance with data protection laws; works council rules).
            Implementing future measures to be prepared for a potential second infection wave:

            o Regulations on notification - access and monitoring systems.
            o Technical solutions to deal with infected employees (e.g. ample system).
            o Regulation on holiday for 2020 so that not all employees intend to take holiday when the economic situation improves.
            o Health & Safety measures (particular measures for older employees such as home office or back office).

            Back-up plan for a second infection wave and a second lock-down in order to be prepared and able to act quicker.
            Restructuring and insolvency scenarios.

            People

            Thorsten Kuehnel

            • Senior Associate
            Ireland

            Ireland


            1. What steps are governments taking to support employers and employees during the current global COVID-19 crisis?

            The Irish government has introduced a Temporary Wage Subsidy Scheme ("the Scheme") to support employees affected by the crisis. The scheme is expected to last 12 weeks from the 26 March 2020. 

            In order to qualify for the Scheme, employers must experience at least a 25% downturn in revenue during the period 14 March 2020 to 30 June 2020 and be able to demonstrate an inability to pay wages and other outgoings fully. Employers must also retain their employees on payroll. 

            The Scheme is confined to employees who were on the employer's payroll as at 29 February 2020 and for whom a payroll submission has already been made to Revenue in the period 1 February 2020 to 15 March 2020 (Revenue will consider applications where payroll submission was submitted before 1 April 2020). 

            Income tax and USC will not be applied to the subsidy payment through payroll. Employee PRSI will also not apply to the subsidised payment, or any top-up payment by the employer. Employers’ PRSI will not apply to the subsidised payment, and will be reduced from 10.5% to 0.5% on any top-up payment. However, the payments will be taxed at a later date. 

            The names of any employers operating the scheme will be published on Revenue's website after the scheme has expired. 

            The scheme offers different levels of relief depending on the employee's earnings. For employees who earn up to €412 per week (almost €24,400 per annum), the subsidy will be 85% of their previous net weekly pay. For those employees with average net pay between €412 and €500 per week (€24,000 - €31,000) the subsidy will be up to €350 per week.  For employees whose net pay is between €500 and €586 per week (€31,000 - €38,000 per annum) they will receive a subsidy of up to 70% of their net weekly pay, a maximum of €410 per week. 

            For employees with previous net pay in excess of €586 per week, a tiered approach will apply. The maximum subsidy payable for these employees remains €350 per week. The tiered approach takes into account both the amount paid by the employer and the level of reduction borne by the employee as follows: 

            Gross amount paid by employer                                                                       Subsidy amount 


            - Up to 60% of employee's previous average net weekly pay                              Up to €350 per week

            - Between 60% and 80% of the employees average net weekly pay                  Up to €205 per week 

            - Over 80% of the employees average net weekly pay                                        No subsidy payable

            Tapering of the subsidy will apply to all cases where the gross pay paid by the employer and the subsidy exceed the previous average net weekly pay. This will be calculated by subtracting the amount paid by the employer from the previous average net weekly pay. 

            The Scheme is also available to support employees where their average net pre-COVID 19 salary was greater than €76,000 and their gross post COVID-19 salary has fallen below €76,000. The tiered arrangement applicable to gross incomes in excess of €38,000 will apply in those cases. 

            To calculate the level of subsidy payable, the current gross pay will be compared with previous average net weekly pay for January/ February. The subsidy will be tapered to ensure that the total net income (employer contribution and wage subsidy) does not exceed €960 net per week. 

            COVID-19 Pandemic Unemployment Payment 


            Separately, the government has introduced the COVID-19 Pandemic Unemployment Payment (PUP) (a social welfare payment) to support employees and self-employed people, between the ages of 18 and 66, who have lost their job, have been temporarily laid off or who are not in receipt of an employment income as a result of COVID-19. 

            This payment is €350 per week and will be available for the duration of the crisis.  Students, non EEA nationals and part time workers are all eligible for the payment.

            Credit Guarantee Scheme 

            The Credit Guarantee Scheme is designed to encourage additional lending to SME's by offering a partial Government guarantee (currently 80%) to banks against losses on qualifying loans to eligible SME's.  

            This scheme is available to viable small and medium sized enterprises - defined as companies that have fewer than 250 employees, have a turnover of 50 million or less, are independent and autonomous, and have less than 25% of their credit capital held by public bodies. 

            Facilities range from €10,000 to 1 million for terms of up to 7 years. Currently Ulster Bank, Bank of Ireland and AIB are participating in the scheme.

            The interest rate charges on the loan will be the banks SME lending rates. In addition, the borrower pays a premium which partially covers the cost of providing the guarantee (this can vary but is currently 0.5%). 

            COVID-19 Working Capital Scheme 

            The government has also implemented the COVID-19 Working Capital Scheme. Small to medium sized enterprises are eligible for the scheme under which loans of €25,000 – €1.5 million are available at a maximum interest rate of 4%. 

            2. What are the main challenges facing employers as a result of the current crisis and how are employers dealing with these challenges?

            Nearly all employers will have been affected in some way as a result of COVID-19 and there is a lack of certainty over the time it will take for the crisis to be resolved.  

            The main challenges for businesses are likely to be cash flow, a lack of investment, managing overheads and a reduction in new work owing to the financial position of their clients. Many also have concerns with respect to their employees, particularly in dealing with excess capacity and managing with a depleted workforce. Some employers may also struggle to adapt to the challenges brought on by COVID-19, particularly where they lack the technology or infrastructure to enable staff to work remotely or at home. 

            Where employees do work from home, this can give rise to further issues relating to data privacy and security. 

            It may not be possible for some employers to retain current staffing levels and employers may need to temporarily lay staff off or implement redundancies. Others are asking employees to agree to working reduced hours, taking pay cuts, instituting pay freezes, deferring or delaying bonuses. 

            3. What are the local laws concerning holidays and how are employers responding to these requirements in practice?

            Employees do not accrue annual leave while on layoff in Ireland. If any employees have been placed on short time working (working less than 50% hours), they will accrue annual leave for the proportion of hours worked. 

            Any annual leave accrued up to the point of layoff will remain intact. Employees should not be paid in lieu of annual leave, but instead it should be made available to employees to take once they return to work. 

            As of yet, no legislative changes have been made in relation to carrying over of annual leave, where employees have been unable to take their leave as a result of COVID-19, unlike in other jurisdiction. 

            However, in the event it is not possible for an employee to take all of their leave in 2020 due to COVID-19, employers should be flexible in terms of allowing employees to carry over leave to the next calendar year (which is in accordance with the Organisation of Working Time Act 1997 (as amended)).

            Section 20 (1) of the 1997 Act provides that the times at which annual leave is granted are determined by the employer. The employer should consider the opportunities for the employee to take annual leave but also the need for the employee to balance work commitments and family responsibilities. At the moment, we note an acceptance by employees of measures being taken by their employers, to respond to the COVID-19 crisis, to include the mandatory taking of annual leave. 

            4. What do you envisage will be the main employment law issues and emerging themes as conditions begin to ease?

            We anticipate that there will be a lot of new employment claims arising out of the COVID-19 pandemic, including in relation to payment of wages, redundancy and unfair dismissal. There are also likely to be delays with hearings before these bodies.  

            Organisations across Ireland are already having to consider redundancies and as the pandemic continues, we expect a number more will need to make the difficult decision.  With the numbers involved, many employers will need to collectively consult with the workforce on the redundancy situation.  Strict timescales are applicable based on the numbers involved and there are additional obligations on employers in such circumstances. 

            Where employment processes, such as performance management processes, grievance and disciplinary procedures, were commenced before or during COVID-19, we may see an accumulation of these where they have had to be put on hold because it has been inappropriate or impossible for employers to carry them out. 

            People

            Dermot Casserly

            • Partner // Head of Employment (Ireland)

            Alison Martin

            • Associate
            Italy

            Italy


            1. What state-sponsored support is there for employers and their workforce during the global COVID-19 crisis?

             The Italian authorities are implementing extraordinary measures for the purpose of protecting and balancing both employers' and employees' needs and rights. 

            Since the beginning of the health emergency in Italy (i.e. early in March), the Italian government has issued guidelines and legislation specifically addressed to employment relationships and their management, taking into account the lockdown (that involved certain cities and provinces at first, but then was extended to the entire Italian territory). 

            The Italian government requires employers:

            Where possible and with due regard to the tasks to be carried out, to have the workforce working remotely.   
            To grant holiday periods (already accrued) and paid leave for employees, as well as further measures provided by the applicable bargaining agreements (such as, for example, leave for cancelled festivities).
            To suspend the activities of any unit not essential for the production.

            The main temporary measure implemented by the Italian government for the purpose of supporting employers is the access to the so-called cassa integrazione: if the employer is obliged to suspend or reduce working activities (and the employees are requested to stay home with no salary), the employer is entitled to apply for a special allowance (granted by the Italian Social Security Authority, managed by the State) in favour of the suspended employees. This allowance covers a percentage of the salary not granted by the employing entity during the mentioned employees' suspension from work. This extraordinary measure is authorised for a maximum period of 9 weeks, provided that the suspension / reduction of the activity is linked to the COVID-19.

            Further temporary measures have been implemented, such as: extraordinary leave for employees with children, babysitter allowance, extraordinary leave for employees assisting persons affected by disability, special treatment in the case of employees infected by COVID-19 or in quarantine, etc.

            On the other hand, employers were prohibited from implementing individual / collective dismissals for redundancies for a 60-day period, starting from 17 March 2020.

            New pieces of legislation should be issued by the Italian government shortly due to the envisaged termination of the lockdown (4 May 2020).

            2. What are the main challenges facing employers and how are they responding?

            Based on clients feedback, the main challenges are (i) the prohibition on redundancy dismissals for a specific period of time, and (ii) management of the employment relationships and workload in the "post lockdown phase", from both an economic (gradual recovery in economic activity) and health (measures to be implemented and granted also on an individual basis) perspective.

            For the time being, employers are mainly supported by the State (through the cassa integrazione), but they are evaluating dismissals once the 60-day period will expire – especially if the economic activity will not recover as expected. This will have an economic impact for employers, because in the case of termination they will be obliged to grant mandatory termination payments.

            The implementation of individual health measures (and having the employees comply with them) will be a key point, which could have a further economic impact on the employers. The competent Italian Agency (INAIL) is issuing guidelines for employers, identifying rules governing the management of common spaces, interpersonal distance between the employees, mandatory extraordinary cleaning activities, individual health protection etc. 

            3. How are employers applying the local laws on holidays during lockdown?

            Legal and contractual provisions have not been impacted by the COVID-19 legislation. However, the State has strongly recommended to employers (although not obliging them) to grant holiday periods (where already accrued by the employees), if their businesses were impacted by the lockdown.

            In this case, employees have benefited from paid holidays (where accrued), with two main consequences: 

            (i) Since holidays were paid, the employers were obliged to grant basically the same salary (with no money saving) to the relevant employees.  
            (ii) In practice, employees ordinarily take two or three weeks of holiday during August and it is unlikely they will re-accrue sufficient days of holidays, which means that they will be either requested to work in August or take unpaid days off. 

            Having the above in mind, employers have decided to apply for the cassa integrazione because the allowance is paid by the State directly to the relevant employees. Moreover, in this case the holiday periods remain unaltered and the days of holidays would be granted in August (where accrued).

            4. What are the main employment law challenges and emerging themes as conditions return to normal?

            The main employment law issue is likely to be the termination of the employment contracts and the reasons thereof. Employers will probably prefer to proceed on the basis of dismissals for disciplinary reasons (saving the indemnity in lieu of notice) instead of redundancy. It is reasonable to infer that this will increase employment-related claims. 

            People

            Poland

            Poland


            1. What steps are governments taking to support employers and employees during the current global COVID-19 crisis?

            Polish parliament issued laws related to prevention and combating of the results of economic slowdown caused by the epidemic of COVID-19 (so called "anti-crisis shield"). These laws are systematically updated. Currently they include the following solutions:

            Financial aid in the period of economic downtime

            The employers who suffered the specific decline in economic turnover may agree with the trade unions or employees' representatives on introduction of economic downtime (the agreement should be provided to the district labour inspector within five business days from the day of its conclusion). It refers to employees and individuals engaged on the basis of civil law contracts (umowa o pracę nakładczą, umowa zlecenia, umowa o świadczenie usług), excluding B2B agreements.

            The decline in economic turnover should be of at least 15% in the period of two consecutive months between 1 January 2020 and the day preceding the submission of application (in comparison with the analogous two months in 2019) or 25% in the period of one month between 1 January 2020 and the day preceding the submission of application (in comparison with the preceding month).

            The employer may decrease remuneration of employees subject to downtime up to 50% (the decreased remuneration cannot be lower than minimum remuneration for work). The employer may then receive financial aid to cover costs of employees' remuneration and social security contributions deducted from this remuneration. It is capped at PLN 1,300 gross (50% of minimum remuneration for work) for the full time employee. The money will be provided from Guaranteed Employee Benefits Fund. Employees who were paid PLN 15,595.74 gross or more in the month preceding the month of filing the application for financial support are not covered by this aid.

            The employer may benefit from the support provided that it does not have arrears in payment of tax advances and social security contributions and it does not fulfil conditions to be declared bankrupt. The financial aid may be granted for the period of up to three months.

            The employer who received benefits from the Guaranteed Employee Benefits Fund is not allowed to terminate the employment relationships for reasons not related to employees, over the period in which the benefits are received.

            Financial aid related to reduction in working time

            The employers who suffered decline in economic turnover (as indicated above) may agree with the trade unions or employees' representatives that the working time will be reduced by 20% but no more than to half of full time. The remuneration after reduction in working time may not be lower than the statutory minimum remuneration for work. 

            The employer may be granted financial aid from the Guaranteed Employee Benefits Fund to cover costs of the remuneration and social security contributions.

            The amount of support is up to 50% of the employee's remuneration, but no more than 40% of average monthly remuneration in the previous quarter (preceding the day of submission of application) announced by the President of the Central Statistical Office. Currently the limit is PLN 2,079.43 but the remuneration for first quarter of 2020 shall apply – it has not been announced yet.

            Other conditions of granting the financial aid are similar as in case of economic downtime.

            Financial aid from district governor (starosta)

            District governor may grant financial aid to cover costs of remuneration and social security contributions, to employers who suffered a decline in economic turnover. The financial aid will apply to employees and individuals engaged on the basis of civil law contracts (umowa o pracę nakładczą, umowa zlecenia, umowa o świadczenie usług), excluding B2B agreements.

            The financial aid may be granted in case of 30% (or more) decline in economic turnover calculated as a comparison between (i) total turnover for two consecutive months in the period from 1 January 2020 until the day preceding the submission of application and (ii) total turnover for the analogous two months in the previous year. The limit of financial aid that may be granted is from 50% to 90% of minimum remuneration for work.

            The financial aid may be granted for the maximum period of three months (this period may be further extended by the Council of Ministers). During the period for which the financial aid has been granted, the employer is obliged to keep employees covered by the support, employed.

            The financial aid may not be granted if the same costs have been or will be covered by other public resources in different procedures. The maximum amount of financial support may not exceed EUR 800,000 per company.

            The financial aid may be granted to small and medium size entrepreneurs.

            Postponed implementation of Employee Capital Plans (PPK)

            In case of employers bound by obligation of the act on PPK as of 1 January 2020 (employing between 50 and 250 employees), the deadline for conclusion of agreement on management of PPK, has been postponed by six months. Therefore, the agreement on the maintenance of PPK should be concluded by such employers until 10 November 2020 and the agreement on management of PPK – until 27 October 2020.

            Other solutions

            The periodic medical exams are not obligatory in the period of pandemic and OHS trainings may be performed online. Additionally, entrepreneurs may introduce certain solutions in the scope of working time systems. In particular enterprises which constitute a part of critical infrastructure may order employees to work overtime even when it violates employees' right to rest. The employer may define the place where the employee spends his or her time of rest and remains ready to work. 

            2. What are the main challenges facing employers as a result of the current crisis and how are employers dealing with these challenges?

            The main challenges:

            The necessity to deal with many issues of legal importance simultaneously (employees, customers, suppliers, investors, etc.).
            Financial problems of entrepreneurs caused by reduced number of orders.
            Lack of possibility to provide services of delivering products from outside Poland due to closed borders.
            Remote working formula which can be broadly implemented only in certain types of enterprises. 
            Difficulties in selecting employees to keep working in employer's premises.
            Closures of enterprises and other institutions (restaurants, hotels, gyms, hairdressers, shopping-malls, schools/kindergartens).
            The necessity of implementing special health and safety procedures in order to minimise the risk of the spread of the virus at the workplace.
            Lack of proper legal basis to process data on employees' health condition.
            Absences of employees

            Dealing with the challenges of COVID-19

            Limiting our considerations to labour law issues, it should be noted that employers deal with these challenges at different stages:

            Stage 1: searching for answers to the new challenges and analysing the legal consequences (such as what to do if employees become infected; how to ensure safe and hygienic working conditions; how to deal with business travel; whether employees can be instructed to use their leave; to what extent remuneration can be reduced).
            Stage 2: Change of work organisation (work on IT infrastructure; in the case of employees whose position enables the implementation of the remote working formula); Applying for financial aid defined in the "anti-crisis shield"; Negotiation and conclusion of agreements employees' representatives on reducing employees' remuneration.
            Stage 3: Observation of changing events and implementation of changes and recommendations (e.g. health and safety measures such as ordering workers to wear masks, using hand disinfectant)
            Stage 4: Preparation for a step-by-step to the exit from lockdown. 

            3. What are the local laws concerning holidays and how are employers responding to these requirements in practice?

            Holiday opportunities for employers/employees

            The employer cannot require employees to take annual leave without their consent, except for the annual leave entitlement for previous years and outstanding annual leave in the period of notice. The expected amendments to the "anti-crisis shield" are to introduce the possibility of requiring an employee takes annual leave without the employee's consent. 
            Another possibility is for employees to use unpaid leave. However this is granted upon written request of the employee. The employer cannot therefore require an employee uses unpaid leave without his or her consent and without his or her request. There is no statutory limit of period of such leave.
            • In practice many employers discuss the possibility of taking leave by the employees.

            4. What do you envisage will be the main employment law issues and emerging themes as conditions begin to ease?

            The main issues of labour law could be:

            The actual evaluation of measures implemented during the crisis.

            o Maintaining security measures or replacing them if necessary.
            o Continuation of permanent measures (hygiene measures; home office; split-teams) if still required. 
            o Possible disputes regarding implemented solutions.

            Legal review of the implemented measures if they should be continued to be used (e.g. compliance with data protection laws).
            Implementation of measures to be prepared for a possible second wave of infection:

            o Rules on notification, access and monitoring systems. 
            o Technical solutions to deal with infected employees.
            o Adjust the annual leave plan in 2020 to ensure adequate staffing levels in case of economic recovery.
            o Health and safety measures (specific measures for older workers at risk).

            A back-up plan for the second wave of infection and second downtime (experts indicate that this may take place in the autumn) to have an action plan to minimise losses.
            Restructuring and insolvency scenarios.

            People

            Singapore

            Singapore


            1. What steps are governments taking to support employers and employees during the current global COVID-19 crisis?

            Enhanced wage subsidy for companies, regardless of their business sectors but with certain exceptions, of 75% of the gross monthly wages on the first S$4,600 of wages for each local employee to be paid in April and May 2020 (Singapore’s circuit-breaker period). From June 2020, the wage support subsidies will move to tiered levels – i.e. 75% for tourism and aviation sections, 50% for the food services sector and 25% for all other sectors. Subsidies have been extended to cover the wages of employees who are also shareholders and directors of that company.

            Self-employed people with less means and family support will receive government assistance through the Self-Employed Person (SEP) Income Relief Scheme until December 2020. Eligible SEPs will automatically receive three quarterly cash payments of $3,000 each in end-May, July and October 2020.

            To help ease labour costs for businesses with employees on work permits and S-passes, foreign worker levies for the months of April and May 2020 will be waived and employers will also receive a foreign work levy rebate of S$750 for each work permit or S-pass holder based on previous levies paid in 2020.

            2. What are the main challenges facing employers as a result of the current crisis and how are employers dealing with these challenges?

            There are a number of challenges that are common to all countries impacted by COVID-19, the following are aspects more specific to Singapore:

            The circuit-breaker period has recently been extended to 1 June 2020. During this period all businesses, except those offering “essential services”, have been required to close and the population is being required to largely stay at home. Employees of a number of non-essential businesses may continue to work from home however, those operating “essential services” are required to adhere to strict safe social distancing and other temporary measures implemented by local law to limit the spread of COVID-19 within the population. These include implementing work from home measures to the best extent possible and complying with local regulatory requirements where work from home is not possible. 

            Aside from common issues such as the mobilisation of remote working capabilities during the circuit-breaker period, Singapore’s dependence on daily migrants from Malaysia as well as its foreign workers to perform a number of essential services presents a more unique complication due to border restrictions, as well as the sharp increase in COVID-19 cases within the foreign worker population. 

            There is also regional impact on businesses as a result of the inability of senior management, who are often based in Singapore, to travel. Knock-on impact on regional initiatives in surrounding Southeast Asian locations has been reported by a number of companies.

            Most employers are availing of the subsidies offered to the extent that they can. The approach of employers appears to be largely guided by sector-specific concerns at present as each sector faces very different challenges. 

            3. What do you envisage will be the main employment law issues and emerging themes as conditions begin to ease?

            Issues surrounding lay-offs will inevitably be a key issue for hard-hit employers. 

            There may be consequent issues in the obtaining of employment passes in the event that Singapore follows the more restrictive measures that have been adopted in other countries on this front.

            While there is generally likely to be less employer-employee litigation overall, it is likely that there will be a significant amount of unanticipated COVID-19 related employment legal issues to address, including potential claims under Singapore’s Work Injuries Compensation Act, as complications transpire due to this unprecedented situation.

            People

            Babita Ambekar

            • Partner // Head of India Practice
            Spain

            Spain


            1. What state-sponsored support is there for employers and their workforce during the global COVID-19 crisis? 

            Employers can ask for the suspension of employment contracts and/or reduction of working hours due to force majeure, during the current state of alert declared by the government due to COVID-19: A company seeking to apply these measures, needs to justify to the Labour Authority that: 

            - Its activity has been suspended by a decision undertaken by the government. For example, the government has declared the temporary closure of restaurants, schools, hotels, cinemas, museums, gyms, shops that do not sell basic products, etc.; or
            - That the  company is not receiving the necessary supplies for developing the activity due to transport restrictions or to other measures undertaken by the government; or
            - The majority of employees are affected by coronavirus or the company is closed due to sanitary reasons. 

            If the company can justify the existence of any of the mentioned problems, it is possible to ask the Labour Authority for the suspension of employment contracts and/or the reduction of working hours during the state of alert. The Labour Authority has five working days to answer to the request of the company and if this response is not provided on time, the measure is granted. 

            The suspension of the contract entails that the employee will be unemployed, and he/she will receive an unemployment benefit paid by the government. At the end of the suspension, the employee will return to his/her job and the contract will be reinstated. 

            The reduction of working hours can be between 10% and 70% of the working hours. During the application of this measure, the employee will receive the salary for the hours partially worked and he/she will be unemployed for the part of the hours he/she does not work. 

            If the suspension of contracts and/or the reduction of working hours for force majeure is granted, companies with less than 50 employees can ask the Social Security for the total exemption on the payment of the part of Social Security contributions purchased by the company, during the application of the measure. Companies with 50 employees or more, will be able to ask for a reduction of the 75% on the mentioned Social Security contributions. 

            If after the application of these measures the company has the intention to proceed to the dismissal of employees, it will be necessary to analyze this carefully, due to the fact that companies which have requested these measures due to force majeure have the obligation to maintain the jobs for a period of at least six months after the termination of the state of alert.  

            Employers can apply for collective suspension of employment contracts and/or reduction of working hours for objective reasons: A company which seeks to apply these measures, needs to justify that it has at least one of the following issues: 

            - Economic problems: This occurs when the company has economic losses, a decrease on earnings (decrease on two consecutive quarters in comparison to the same of the previous year) or forecast the existence of losses or decrease on earnings. 
            - Technical problems: When the company changes the methods, instruments or tools to produce the goods they provide to the market. 
            - Organisational problems: When the company needs to change the method of organising staff. 
            - Productive reasons: When the company faces a change on the demand of products or services. 

            In order to apply the suspension of employment contracts and/or reduce the working hours for objective reasons, the company should comply with the following proceeding: 

            - The company should inform the representatives of the employees or inform directly to the employees (if they have no elected representatives) that the company has the intention to temporarily apply the mentioned measures and to inform them that they have five days to elect three representatives in order to negotiate these measures with the company. 
            - Once passed these five days, the company should inform the Labour Authority and should start a negotiation proceeding with the representatives elected by employees. The maximum negotiating period is seven days. 
            - If parties reach an agreement, it should be communicated to the Labour Authority and the measure agreed can be applied. 
            - If parties do not reach any agreement, the company will inform the Labour Authority and the measure will be applied, but it can be appealed by employees in front of the corresponding Court. 

            The effects of suspension of employment contracts and of reduction of working hours are the same as in the collective suspension of contracts and/or reduction of working hours due to force majeure. 

            The company will not be entitled to get any exoneration or reduction on payment of Social Security contributions. 

            Companies are obliged to facilitate homeworking: It will be necessary to reach a temporary agreement with the employee on this sense. 
            Moratorium for companies and self-employed employees on payment of Social Security contributions accrued between May and July 2020: The requirements for requesting this moratorium are: a) that the activities have not been suspended as a result of the state of alert and b) companies and self-employed employees have not asked for an exemption on Social Security contributions. 
            The moratorium will be given to: a) the part of contributions of employees purchased by the Company and b) to the contributions of self-employed employees to the Autonomous Regime of the Social Security. 
            Pension for cessation of business activity, only applicable to self-employed employees: Self-employed employees can ask for a pension in case their activities are suspended as a result of the COVID-19 or when their earnings has decreased in a 75% (comparing these earnings to the ones they had in the previous six months). 
            They will receive this pension until the last day of the month in which the state of alert finishes.
            The amount of the pension will be 70% of the average of the regulatory base on grounds of Social Security corresponding to the last 12 months. If the self-employed employee is registered in the Autonomous Regime of the Social Security for less than 12 months, the amount of the pension will be the 70% of the minimum regulatory base of the Social Security.
            Social Security protection for employees infected by COVID-19 or obliged to be isolated: The disability will be classed as temporary disability assimilated to an accident at work and the employee will receive a pension for an amount equivalent to the 75% of the regulatory base of the Social Security since the first day. 

            2. What are the main challenges facing employers and how are they responding?

            Some companies have their establishments closed due to a decision undertaken by the government or are not able to manufacture or distribute their products because they do not receive the necessary supplies. 

            These companies have implemented: homeworking, temporary suspension of employment contracts and/or reduction of working hours due to force majeure and the shops which sell their products through the internet, they continue doing so. 

            Most companies which can continue offering their products have faced a reduction on the demand of products and/or their clients have decided to postpone payments. 

            These Companies have implemented: homeworking, suspension of employment contracts and/or reduction of working hours due to objective reasons and they have been obliged to provide protection means and to implement preventive measures to those employees which render their services in the premises of the company. 

            Companies which manufacture or distribute medical products and means of protection against COVID-19 are able to be requested by the government in order to deliver these products in case of necessity. 

            Most employers are facing employee absenteeism due to COVID-19, they do not receive the necessary means to protect employees and are not able to implement homeworking.

            3. How are employers applying the local laws on holidays during lockdown?

            According to Spanish regulations, the concrete days of holidays should be agreed between the company and the employee. Some companies have agreed with employees to take holidays during the lockdown. 

            Since 30th March until 6th April 2020, the government obliged companies that do not provide essential services to give a paid permit to those employees who were not able to homeworking. Employees affected by this permit have the obligation to recover the hours not worked in another period. Regardless of this work permit, there are companies that have reached similar agreements with employees. 

            4. What are the main employment law challenges and emerging themes as conditions return to normal? 


            We consider that once the current state of alert finishes, companies will undertake: 

            Collective suspension of employment contracts and/or reduction the working hours for objective reasons. 
            Some companies will decide to apply collective dismissals due to objective reasons.

            People

            UAE

            UAE


            1. What state-sponsored support is there for employers and their workforce during the global COVID-19 crisis?

            Employee Support

            Extension of UAE Visas

            Over 85% of the UAE workforce is made up of expatriates who are required to hold a valid residency visa to legally reside in the UAE. The local authorities have granted automatic extensions of visas until the end of the year in order to alleviate hardship of expatriate employees that may have been made redundant during the COVID-19 precautionary measures period.

            Mainland

            The UAE Ministry of Human Resources and Emiratisation (MOHRE) issued Ministerial Resolution No. 279/2020 which addresses the impact of COVID-19 on the employment relationship generally aimed at the protection of employees' interests. The Ministerial Resolution set out guidelines on the gradual steps that UAE employers should take when deploying measures to reduce costs within business. Accordingly, the below listed actions, (with the employee's consent) should be followed in such order:

            Remote work;
            Paid leave;
            Unpaid leave;
            Temporary wage reduction; and
            Permanent wage reduction.

            Employee Surplus 

            The MOHRE has established a Virtual Labour Market as a mechanism to register surplus employees which enables UAE companies to quickly check the database in order to source and temporarily recruit surplus employees. 

            DIFC

            The DIFC Authority (an independent freezone) introduces special sick leave provisions for any DIFC employees where the employees has:

            (a) contracted COVID-19 and this has been confirmed by a valid sick certificate; and/or
            (b) been quarantined by the local authorities in order to limit the spread of COVID-19.

            This essentially means that such employees will be on full remuneration for the entire period of the COVID-19 related sick leave. 

            If the DIFC employer is in the retail, service or hospitality sector and has provided company accommodation, the employer must continue to provide accommodation to any terminated employees during the COVID-19 period until the cancellation of the terminated employee's residency visa. 

            Employer Support

            Mainland

            MOHRE has issued Ministerial Resolution No. 281/2020 dealing with remote working in the private sector to assist with business continuity and introduces measures for employers to follow which include:

            a maximum percentage of employees in the office to 30%;
            health and safety guidance (health and safety measures); and
            selection criteria for remote workers (criteria includes employees that suffer from chronic underlying diseases, mothers of young children, the elderly, disabled etc).

            DIFC

            Employers in the DIFC have been granted with flexibility during the COVID-19 pursuant to a Presidential Directive No.4 of 2020 which permits the employer to unilaterally impose all or any of the following temporary emergency measures which include:

            The ability to reduce working hours.
            The ability to impose annual leave, with or without pay.
            The ability to reduce remuneration on a temporary basis.
            A restriction on workplace access.
            The ability to impose remote working conditions and impose means to measure employee engagement and productivity.

            2. What are the main challenges facing employers and how are they responding?

             The main challenges employers are facing are:

            Closure of business operations.
            Breakdown of the business supply chain.
            Redundancies.
            Increased labour claims/disputes.
            Business operations in an economic hub severely impacted by lockdown/ travel restrictions.
            Cash flow issues - Inability to pay salary and business liabilities. 

            The UAE employers have quickly adapted to the stringent UAE lockdown procedures and introduced measures which include:

            Consultation with employees in relation to contractual amendments (i.e. reduction in salary/unpaid leave).
            Remote working (IT support).
            Creation of business continuity plans.
            Checking employees on site for working in vital industries for COVID-19 measures (temperature checks, well ventilated, adequate spacing and distancing measures).
            Information sharing and employee wellness and support initiatives.
            Ensuring employees have adequate PPE equipment and adequate sanitisation equipment. 

            3. How are employers applying the local laws on holidays during lockdown?

             In the UAE employers are legally entitled force employees to take annual leave. This approach has been encouraged by the UAE government as an interim measure prior to taking up more drastic measures such as salary reduction/unpaid leave. Several employers have utilised this option in order to alleviate the financial pressure that UAE business are facing.

            4. What are the main employment law challenges and emerging themes as conditions return to normal?

            The main employment law issues and emerging themes arising could be:

            An increase on arbitrary dismissal claims and non-payment of wages.
            An increase on statutory entitlements such as end of service gratuity.
            Enhancement of health and safety obligations.
            More agile working measures.
            Employment contract amendments to deal with force majeure, agile working, emergency leave.
            Legal amendments, for example potential introduction of redundancy is not a legal concept in the UAE.

            People

            Shiraz Sethi

            • Middle East Managing Partner // Co-Head of Employment

            Thenji Moyo

            • Legal Director // Co-Head of Employment
            UK

            UK


            1. What state-sponsored support is there for employers and their workforce during the global COVID-19 crisis?

            The Coronavirus Job Retention Scheme (CJRS) has been introduced by the UK government as a temporary measure to assist employers and employees during the coronavirus outbreak – it is open to all UK employers. It enables employers to furlough employees (keeping employees on the employer's payroll but not allowing them to work – at least until August 2020) and claim 80% of furloughed employees' usual monthly wage costs, up to £2,500 per month. The CJRS has been extended to October 2020, with the option of employees working part time from August, with employers paying a percentage of the salaries. 

            The government has also made temporary changes to Statutory Sick Pay (SSP) to help support those who are sick with the virus or need to isolate to prevent the spread of the virus. SSP is currently £95.85 and it is now (temporarily) payable from day 1 of absence instead of day 4 for affected individuals. The government has offered help to small and medium-sized business (those who employ less than 250 employees) by refunding SSP costs for up to two weeks per eligible employee who has been absent from work because of COVID-19.

            The government has amended the Working Time Regulations 1998, relaxing the rules on carrying over annual leave to support key industries during COVID-19. The new legislation allows up to four weeks' annual leave untaken due to the coronavirus pandemic to be carried forward into the next two leave years. 

            The government has adapted right to work checks. Some checks usually involve checking the employees original required documents in their presence with a copy then taken and certified appropriately. This has caused difficulty whilst social distancing measures need to be observed so the Home Office has temporarily relaxed its rules and has allowed checks to be carried out by video link. 

            The government has also introduced the new Coronavirus Self-Employment Income Support Scheme to support self-employed individuals whose trading profits are impacted by the current crisis. This scheme will allow self-employed individuals to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 a month and it will be available for 3 months. 

            In addition to those set out above, the government has introduced many other measures to support large and small businesses. For example, employers do not have to report gender pay gaps for 2019/2020, UK VAT registered businesses have been given the option to defer their VAT payment due between 20 March 2020 and 30 June 2020 to a later date, and businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year. The government has introduced the coronavirus business interruption loan schemes for small and large businesses to provide those businesses affected with access to loans of up to £5million (for small and medium-sized businesses) or £25million (for large businesses). The COVID-19 corporate financing facility has been set up to help large businesses affected by COVID-19 through the purchase of their short-term debt. 

            2. What are the main challenges facing employers and how are they responding?

            It seems that all employers share the same issues with regard to running their business in terms of cash flow, a lack of investment, managing overheads and a reduction in new work owing to the financial position of their clients. Many also have concerns with respect to their employees, particularly in dealing with excess capacity, the cost of employees accruing holiday and managing with a depleted workforce. Some employers will have struggled to adapt to the challenges brought on by the COVID-19 pandemic particularly where they lack the technology or infrastructure to enable staff to work remotely. 

            A lot of businesses have sought to capitalise on the support that the government is offering in order to retain its workforce and to mitigate the impact the crisis is having on their finances. Businesses are investing in their technology capabilities to ensure business as usual processes are upheld and their employees can maintain productivity through flexible, agile and home working. Although, this brings with it challenges –there are risks associated with this in protecting cybersecurity, data privacy and confidential information. 

            Many employers have decided to freeze recruitment and promotions to deal with the financial effects that the COVID-19 pandemic is having on their business and have instead focussed on redistributing jobs or reskilling employees. Others have sought to manage employee holiday accrual to prevent a backlog.

            Where work is depleted and it is not possible to retain current staffing levels, many employers are faced with the difficult decision to make employees redundant. Others have decided to furlough staff or ask employees to consent to working reduced hours, taking pay cuts, instituting pay freezes, deferring or delaying bonuses. Other employers have encouraged staff to take unpaid leave and sabbaticals. In professional services firms, partners have seen their payments and distributions reduced or suspended and there have been capital calls from both partners and LLP members.

            3. How are employers applying the local laws on holidays during lockdown?

            As stated at question 1 above, the government has introduced measures to enable employers affected by COVID-19 to have the flexibility to allow workers to carry over some of their leave into the next 2 leave years where it has not been 'reasonably practicable' for the worker to take their leave in the applicable year as a result of the effects of COVID-19. This means employers can allow their workers to postpone taking some of their holiday entitlement without losing it.

            One of the later versions of the CRJS guidance has clarified the issue of holiday in relation to furlough leave. The updated guidance has confirmed that it is possible for employees to take annual leave while on furlough, with the employer having to pay the employee their normal rate of pay (where pay varies, the normal rate of pay should be calculated on the basis of the average pay received in the previous 52 weeks). This means that employers will be obliged to pay the additional amount over the CJRS grant to ensure that employees are paid their normal rate. If an employee usually takes the bank holiday as leave then the employer would either have to top up pay to 100% of usual pay, or give a day of holiday in lieu.  

            Some employers are refusing to accept cancellation of holiday requests, requiring holiday to be taken in the holiday year and not carried forward, requiring holiday to be taken at specific times (although this actually requires twice as much notice from the employer as number of days' holiday to be taken) and reducing contractual holiday entitlement above the statutory minimum 5.6 weeks (especially for employees on furlough).

            4. What are the main employment law challenges and emerging themes as conditions return to normal?

            As well as a backlog of Employment Tribunal claims delayed due to the COVID-19 pandemic, we also anticipate that there will be a lot of new claims at the Employment Tribunal, including matters relating to breach of contract, unfair dismissal and particularly in relation to an employer's construction of the CJRS.

            Organisations across the UK are already having to consider redundancies and as the pandemic continues, we expect a number more will need to make the difficult decision. The primary purpose of the CJRS is to protect jobs, however the scheme can only do so much. With the numbers involved many employers will need to collectively consult with the workforce on the redundancy situation.  Strict timescales are applicable based on the numbers involved.   

            There may be some issues arising from the non-payment of grants made under the CJRS, for example where an employer misused the grants awarded to pay for other business costs. 

            Where business as usual processes involving employees were started before the outbreak of the COVID-19 pandemic, such as performance management processes, grievance and disciplinary procedures, we may see an accumulation of these where they have had to be put on hold because it has been inappropriate or impossible for employers to carry them out. 

            We believe that the COVID-19 pandemic is likely to accelerate a number of changes across all of society. In the workplace, we can expect complete and fundamental reappraisal of working practices likely to result in increased flexible, agile and homeworking. We have already seen a significant increase in the use of technology throughout this period, for example through holding client and internal meetings virtually, and this is likely to expand even further to adapt business as usual practices. In addition, as employees embrace the use of technology, it is likely that national and global travel will also be replaced with virtual meetings, aligning working practices with environmental policies. This too is likely to lead to a reduction of expensive city-based premises in favour of the virtual office. 

            People

            Helga Breen

            • Partner // Head of Employment (London)

            Kirsty Rogers

            • Partner // Executive Head of Manchester

            Charlotte Lloyd-Jones

            • Professional Support Lawyer
            US

            US


            1. What state-sponsored support is there for employers and their workforce during the global COVID-19 crisis?

            The federal government has passed a series of acts in the past few weeks aimed at addressing and supporting employers and employees impacted by the COVID-19 crisis.  

            Families First Coronavirus Response Act (FFCRA) 


            The FFCRA includes a variety of provisions, but of primary importance to employers are: (i) the Emergency Paid Sick Leave Act, which requires employers to provide paid sick leave of up to two  weeks in addition to other accrued leave, (ii) the Emergency Family and Medical Leave Expansion Act, which requires employers to provide employees up to 12 weeks of leave to any eligible employee who is unable to work or work remotely due to the need for caring for a child under the age of 18 due to a school closure or public health emergency, and (iii) the Emergency Unemployment Insurance Stabilization and Access Act, which provides significant and immediate federal funding to states administering claims for unemployment insurance benefits. In general, these provisions are in effect between April 1, 2020, through December 31, 2020, and apply to employers with less than 500 employees. 

            Under the  Emergency Paid Sick Leave Act, the paid sick leave requirement is triggered if the leave is related to COVID-19, but the amount of pay required varies depending on the specific reason for the employee's request for leave.

            Under the Emergency Family and Medical Leave Expansion Act, employers must provide employees seeking leave related to COVID-19 protected and partially paid leave up to 12 weeks.  Notably, the Family Medical Leave Act, prior to this expansion, only provided protected leave on an unpaid basis for employees with 12 months of tenure. 

            Under the Emergency Unemployment Insurance Stabilization and Access Act, federal funding of the federal-state administration of claims for unemployment insurance benefits has been prioritized and guidelines were issued to encourage states to reduce the eligibility requirements for applicants.   

            Coronavirus Aid, Relief, and Economic Security Act (CARES)


            The CARES Act provides $2 trillion dollars in relief funding, including provisions for SBA Paycheck Protection Loans and expanded access to the SBA Economic Injury Disaster Loans.  SBA Paycheck Protection Loans are for the period of February 15, 2020, through June 30, 2020, and are intended to fund ongoing payroll expenses for qualifying businesses. SBA Economic Injury Disaster Loans are intended to fund business expenses other than payroll. The CARES Act includes other notable provisions, such as moving the tax filing deadline from April 15, to July 15, 2020, as well as an Employee Retention Credit toward social security payroll taxes for employers forced to close or suspend operations but that continue to pay employees. 
             
            The states are enacting or considering a variety of different measures in addition to the federal legislation mentioned above. For example:

            The State of New Jersey legislature has introduced and is considering an act (Assembly, No. 3844) that would require insurers to cover business interruption claims from COVID-19 and would apply retroactively. 
            The State of California, by way of executive order of the Governor, amended  and waived the 60-day notice requirement for reductions in force affecting 50 or more employees if the reduction is caused by COVID-19-related business circumstances. 

            2. What are the main challenges facing employers and how are they responding?

            Employers are facing a multitude of challenges due to COVID-19, but from a logistics standpoint, we believe there are three primary challenges for employers operating on a national or multi-state basis:

            1.  State-by-state restrictions on business operations 

            Employers with operations across multiple states must comply with varying restrictions on their operations by location. While the federal government has issued an order declaring a national emergency, there is no federal order or mandate for shelter-in-place or closures of businesses across the United States. In the absence of a standardized federal order regarding business operations, state governments have adopted different levels of restriction on businesses. In general, these state orders differentiate between essential and non-essential businesses.  Essential business typically include grocers, health care, construction and government functions. 

            2.  Payroll and leave protections

            Employers are actively monitoring the eligibility requirements for loans under the CARES Act and considering adjustments in payroll compensation and expenses to maximize the use of funding from these loans. Many employers are attempting to quickly understand and ensure proper leave is provided to employees impacted by COVID-19, while also ensuring privacy interests remain protected. 

            3.  Workplace safety concerns

            Employers are faced with the growing concern by workers and union groups regarding safety precautions and exposure to COVID-19. The primary federal agency overseeing workplace safety, the Occupational Safety and Health Administration (OSHA), has not issued specific mandatory safety requirements for workplaces to address COVID-19 concerns, but has recommended employers follow health and safety guidance from other federal agencies. As many of the state restrictions on non-essential business are set to expire and different states are looking to "re-open," many employers are now lobbying federal and state governments to limit their liability for potential claims by employees who may be exposed to COVID-19 as they return to the workplace.

            3. How are employers applying the local laws on holidays during lockdown?

            The Fair Labor Standards Act (FLSA), is federal legislation that establishes minimum wage, overtime pay, record keeping and youth employment in the United States. States and local cities have enacted additional requirements regarding wages, pay notices and other compensation protections. The protection afforded to sick and vacation leave should always be considered under the FLSA and any applicable state or local city laws.

            While there is no federal law that requires employers to provide paid vacation (i.e. holiday) leave, the FLSA and various state and local laws do protect leave and paid time off accruing under an employee's compensation plan. 

            Employers seeking to lay off or furlough workers must ensure accrued paid time off is paid at the time of termination. 

            4. What are the main employment law challenges and emerging themes as conditions return to normal?

            Employers are facing significant liabilities regarding workers claiming injuries and illness due to a lack of safety measures and increased risk of exposure as they return to work. Further, employees reporting concerns of safety issues may be protected from adverse employment  actions and retaliation under various federal and state laws. 


            This piece was written by Robert W. Hellner from our Exclusive Association firm Wood Smith Henning & Berman LLP

            People

            Helga Breen

            • Partner // Head of Employment (London)

            Shiraz Sethi

            • Middle East Managing Partner // Co-Head of Employment

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