The Eighth COVID-19 Law adopted: Labour law aspect

Authors: Darja Miklavčič, Karin Dodič

On 2 February 2021, the National Assembly of the Republic of Slovenia adopted the Act on Additional Measures for Mitigation of Consequences of COVID-19 (ZDUOP) or the Eighth COVID-19 package (hereinafter: the “Eighth COVID-19 law”). The Eighth COVID-19 law is valid from 5 February 2021 onwards.

Below we briefly present the measures or changes to existing measures in the field of work and employment relationships. It should be noted that the Eighth COVID-19 law does not comprehensively regulate all measures available to employers, as they have already been regulated by previous intervention acts. This article focuses only on measures that the Eighth COVID-19 law reintroduces or amends.

1. The measure of partial subsidies for a shorter full-time work

The current intervention legislation allows for the ordering of part-time work until 30 June 2021, whereby the application for a subsidy can be submitted within 15 days after the ordering of part-time work, and no later than 10 June 2021.

The Eighth COVID-19 law does not interfere with the current regulation, but expands the circle of beneficiaries of this measure. Pursuant to the Eighth COVID-19 law, the right to subsidize the shorter full-time work from 1 February 2021 onwards may be exercised by an employer who:

• is a legal or natural person who was entered in the Slovenian Business Register before 18 October 2020 and employs employees on the basis of a full-time employment contract or a natural person carrying out an agricultural activity who was entered in the Register of Agricultural Holdings before 18 October 2020; and
• according to its estimate, it cannot provide at least 10% of employees at least 90% of work per month.

Furthermore, the Eighth COVID-19 law stipulates that an employer who has received a subsidy for a shorter full-time work must, in the event that from 1 January 2021 there have been payments of profits, purchases of own shares or own business shares, payments of management bonuses or part of salaries for business performance to management, paid in 2021 or for 2021, inform the Financial Administration of the Republic of Slovenia (hereinafter: “FURS”) about the latter no later than two months after the payment. The funds received must be returned after service of the decision, together with statutory default interest, which run from the date of receipt of the subsidy until the date of repayment. Violation of this obligation may also result in a fine for the employer and the responsible person of the employer.

2. Temporary measure of partial reimbursement of salary compensation for employees temporarily waiting for work

Limitation of referral to temporary waiting for work and the possibility of extending the measure

The employer may refer an individual employee on temporary waiting for work for the period from 1 February 2021 to 30 April 2021.

This measure may be extended by a decision of the government no more than twice for a period of one month, but not longer than until 30 June 2021.

Eligible employer

The right to the measure of partial reimbursement of salary compensation for employees temporarily waiting for work under the Eighth COVID-19 law may be exercised by any employer registered in the Republic of Slovenia registered on 31 December 2020 at the latest, who cannot temporarily provide work due to the epidemic or consequences of the epidemic, except for:

• a direct or indirect user of the state or municipal budget, whose share of revenues from public sources in 2020 was higher than 70%;
• an employer performing a financial or insurance activity that belongs to group K according to the Standard Classification of Activities and had more than 10 employees on 31 December 2020;
• foreign diplomatic missions and consulates, international organizations, missions of international organizations and institutions, bodies and agencies of the European Union in the Republic of Slovenia.

The measure is eligible for those employers whose estimated revenue (i.e. net sales revenue determined according to accounting rules and benefits from parental care insurance) in 2021 will decrease by more than 20% due to the epidemic or the consequences of the epidemic compared to the year 2019 or 2020. If they did not operate throughout 2019, 2020 or 2021, the employers whose average monthly income in 2021 will decrease by more than 20% due to the epidemic or the consequences of the epidemic compared to the average monthly income in 2019, 2020 or 2021 are also entitled to the measure. Notwithstanding this condition, employers with the status of a humanitarian or disability organization are entitled to the measure.

If these conditions are not met when submitting the annual reports for 2020, the eligible employer shall return the funds received under the measure.

The entity that has claimed partial reimbursement of salary compensation for employees temporarily waiting for work and subsequently finds that it has not met the condition of declining income must notify FURS and return the amount of aid received within 30 days of service of the decision. After the expiry of the deadline for payment until payment, statutory default interest is charged.

Employee’s rights and obligations

An employee who is sent on temporary wait for work and for whom the employer receives a reimbursement of the paid salary compensation, in principle, retains all rights and obligations arising from the employment relationship. The rights and obligations of employees are determined in the same way as in the previous intervention acts, which regulated the possibility of partial reimbursement of salary compensation for employees temporarily waiting for work (i.e. written referral, employee´s duty to return to work at the request of the employer up to seven working days in the current month etc.).

The amount of salary compensation

The salary compensation amounts to 80% of the average monthly full-time salary from the last three months or from the period of work in the last three months before the beginning of the absence, but not less than the minimum salary.

The amount of partial reimbursement of paid salary compensation

The amount of partial reimbursement of salary compensation paid by the Republic of Slovenia amounts to 80% of salary compensation and is limited by the amount of the average monthly salary in the Republic of Slovenia for the month of October 2020 (i.e. EUR 1,821.44 gross). 80% of the salary compensation covered by the Republic of Slovenia includes salary compensation and contributions for all social insurance (gross I).

The amount of reimbursement of salary compensation paid by the Republic of Slovenia may be 100% for employers whose total amount of state aid did not exceed EUR 1.8 million per individual company, whereby this amount also includes the aid that the employer will receive to the end of eligibility under the Eighth COVID-19 law. Certain specific restrictions apply to activities in the fisheries and agriculture sectors.

For the time when the employer is prevented from performing economic activity by regulations due to the COVID-19 epidemic, in the cases referred to in the first and second paragraphs above, the reimbursement of salary compensation covered by the Republic of Slovenia includes salary compensation with all taxes and employer’s contributions (gross II).

An employer who is a direct or indirect user of the state or municipal budget, whose share of revenues from public sources was lower than 70 % in 2020, can claim a reimbursement of salary compensation only in the amount equal to the share of the revenues from non-public sources.

Reimbursement claim procedure

As before, the employer exercises the right to reimbursement of paid salary compensations by an electronic application, which is submitted in electronic form to the Employment Service of Slovenia (“ESS”) within Eight days of the employee’s referral on temporary waiting for work. In the event of an extension of the measure, the application may be submitted no later than 30 June 2021.

If the employer referred employees on temporary waiting for work before the entry into force of the Eighth COVID-19 law for the period from 1 February 2021, it may submit an application within Eight days of the entry into force of the Eighth COVID-19 law, if it meets all conditions for exercising the right.

The right to partial reimbursement of salary compensation may also be exercised within Eight days from the entry into force of the Eighth COVID-19 law by an employer who met the conditions for exercising the right to partial reimbursement of salary compensation for employees temporarily waiting for work under the Act Determining Temporary Measures to Mitigate and Remedy the Consequences of COVID-19 (ZZUOOP) and referred employees on temporary waiting for work in the period from 16 January 2021 to 31 January 2021.

The right to reimbursement of paid salary compensations cannot be exercised by the employer:

• who does not meet the mandatory duties and other monetary non-tax liabilities in accordance with the Financial Administration Act (ZFU), which are collected by the tax authority, if the employer has unpaid due liabilities on the day of submitting the application. An employer shall be deemed not to have fulfilled the obligations under this indent even if, on the day of submitting the application, the employer has not submitted all the withholding tax returns for employment income for the period of the last five years up to the date of submission of the application;
• if bankruptcy proceedings have been instituted against the employer or if the latter is in liquidation proceedings.

The ESS decides on the application within 15 days of the submission thereof by a decision. There is no appeal against the decision, but the administrative dispute is possible.

Employer’s obligations and the duty to repay the received funds

During the period of receiving reimbursement of paid salary compensation, the employer must pay salary compensation to employees and may not order overtime work or temporary redistribute the working time if this work can be carried out with employees on temporary wait for work.

During the period of receiving partial reimbursement of salary compensation, the employer may not initiate the procedure of termination of the employment contract for business reasons to employees sent on temporary wait for work or terminate the employment contract to a large number of employees for business reasons, except in certain specific cases. If the employer acts contrary to the above, the latter must return the received funds in full. The employer cannot claim salary compensation for waiting for work at home for the employee during his or her period of notice.

An employer who receives or has received funds in accordance with the Eighth COVID-19 law must return the received funds in full:

• if it initiates the liquidation procedure under the Companies Act (ZGD-1) within the period of receiving funds and after the cessation of receipt of funds, which is equal to the period of receipt of funds;
• if, when submitting the application for exercising the right, it has submitted a false statement that on the day of submitting the application it has paid all due liabilities from mandatory duties and other monetary non-tax liabilities in accordance with the Financial Administration Act (ZFU), a false statement that on the day of submitting the application it has fulfilled all obligations arising from the submission of all withholding tax returns for employment income for the last five years until the date of submission of the application or a false statement that it paid all salary compensations to employees on the day of submitting the application;
• if while waiting for work it invited the employee to return to work, and did not inform the ESS of the latter in advance;
• if from 1 February 2021 onwards there was a payment of profits, purchases of own shares or own business shares, payments of bonuses to management or part of salaries for business performance paid to management in 2021 or for 2021, in which case the funds are returned with statutory default interest from the date of receipt of the partial reimbursement of salary compensation for employees temporary waiting for work until the date of repayment.

Furthermore, the obligation to repay (in this case the surplus) also applies to the employer if the total amount of public funds received has exceeded the upper limit (EUR 1.8 million per company or the amount of total aid exceeds EUR 270,000 per company active in the fisheries and aquaculture sector or EUR 225,000 per company active in the primary production of agricultural products, where the maximum amount also includes aid received up to the end of eligibility under the Eighth COVID-19 law).

Penal provisions in the field of the measure of partial reimbursement of salary compensation for the period of temporary waiting for work

In case of violation of the rules in the field of the measure of partial reimbursement of salary compensation, the employer can be fined from EUR 3,000 to 20,000. The responsible person of the employer can also be fined.

3. Notification to the Labour Inspectorate

The Eighth COVID-19 law extends the possibility of informing the Labour Inspectorate of the Republic of Slovenia about the ordering of work from home via an electronic application. This measure is valid from 1 April 2021 to 31 December 2021.

4. Crisis allowance

In the implementation of the crisis allowance with the seventh COVID-19 law, there have been many problems in practice regarding the interpretation of to whom the allowance belongs. In particular, the problem of unequal treatment of employees who received a Christmas bonus or other payment in December compared to those who received such a payment sooner or later was highlighted. The Eighth COVID-19 law therefore now stipulates that any payment for business performance is not included in the monthly salary for November 2020. In other words, employees who did not receive the allowance because their salary for the month of November 2020 included paid business performance are also entitled to the crisis allowance, provided that the salary for the month of November 2020 did not exceed twice the minimum salary (i.e. EUR 1,881.16 gross). The crisis allowance in the amount of EUR 200 is paid upon salary for the month of January 2021. The crisis allowance is exempt from all taxes and contributions.

Other conditions regarding the crisis allowance remain unchanged (i.e. a proportional part for those who do not work for a whole month or for those who work part-time).

Employees of the direct and indirect users of the state and municipal budgets, as well as foreign diplomatic missions and consulates, international organizations, missions of international organizations and institutions, bodies and agencies of the European Union in the Republic of Slovenia, are still not entitled to this measure.

In order to reimburse the paid crisis allowance to the employee, the employer submits a statement via the FURS information system no later than the end of March 2021 stating that it has paid the crisis allowance to the employee. FURS pays the reimbursement of the crisis allowance by 20 April 2021 at the latest.

However, the above does not apply to employees to whom the crisis allowance from the seventh COVID-19 law has already been paid before the application of the Eighth COVID-19 law.

An employer who fails to pay the crisis allowance is fined. The responsible person of the employer is also penalized.

5. Minimum salary subsidies

The Eighth COVID-19 law provides for the relief of employers by stipulating that the employer is entitled to reimbursement of part of the minimum salary in the form of a monthly subsidy in the amount of EUR 50 or in proportion to working time, if the employee has a part-time employment contract or performs part-time work, if the employee´s full-time work salary without allowances provided by law and other regulations and by collective agreements, part of the salary for work performance and payments for business performance agreed with the collective agreement or employment contract, does not exceed the amount determined in accordance with the Minimum Wage Act (ZMinP).

Employers, direct and indirect users of the budget of the Republic of Slovenia and municipal budgets, as well as foreign diplomatic missions and consulates, international organizations, missions of international organizations and institutions, bodies and agencies of the European Union in the Republic of Slovenia are not eligible for the subsidy.

The employer is entitled to a subsidy for the payment of work from 1 January 2021 to 30 June 2021.

Also in the case of receiving this subsidy, the employer must return it together with statutory default interest if profits, purchases of own shares or own business shares, rewards to management or part of salaries for business performance have been made to management since the entry into force of the Eighth COVID-19 law in 2021 or for 2021.

During the period of receiving the subsidy and for three months thereafter, the employer may not initiate the procedure of termination of the employment contract for business reasons for employees for whom it was entitled to receive the subsidy, or terminate the employment contract to a large number of employees for business reasons, unless the redundancy program was adopted before the Eighth COVID-19 law came into force.

A fine of EUR 3,000 to 20,000 shall be imposed on an employer who, during the period of receiving the subsidy and for three months thereafter, initiates the procedure of terminating the employment contract for business reasons for employees for whom it was entitled to receive the subsidy or terminates the employment contract of a large number of employees for business reasons, unless the redundancy program was adopted before the entry into force of the Eighth COVID-19 law. The responsible person of the employer is also penalized.

For the period from July to December 2021, the Eighth COVID-19 law subsidizes the minimum salary by setting a minimum basis for calculating salary contributions and salary compensation –  for salaries and salary compensations paid for the months of July to December 2021, the minimum basis is equal to the amount of the applicable minimum salary (i.e. EUR 1,024.24).

6. Short-term absence due to illness without a certificate from a personal physician

The Eighth COVID-19 law re-enforces short-term sick leave without a certificate from a personal physician, for up to three consecutive days in a row, at most once in a single calendar year.

The employee is obliged to notify the employer in writing or electronically of the absence on the first day of absence. During the employee´s absence, the employee may not engage in a gainful activity or move outside the place of his / her residence.

If the chosen personal doctor finds that the employee is still temporarily absent from work due to illness or injury even after the period of the short-term absence due to illness, the right to a one-time short-term absence due to illness shall be deemed not exercised. The right to a single short-term absence due to illness shall be deemed to be exercised even when it has been used for less than three consecutive working days.

The compensation for the period of the short-term absence from work due to illness is calculated in the amount of 80% of the employee’s salary in the previous month for full-time work. The compensation is borne by the Health Insurance Institute of Slovenia.

The measure is valid until 31 December 2021.