Declaring a state of emergency - Remedies available to employer and employee

I. General context

In the context of the evolution of the situation caused by the spread of the SARS-CoV-2 coronavirus, as well as the declaration of "Pandemic" by the World Health Organization, the President of Romania issued Decree no. 195/2020 on the establishment of a state of emergency in Romania on March 16th 2020.

By the aforementioned Decree, published in the Official Journal of Romania no. 212/16.03.2020 Part I, a state of emergency was established in Romania for a 30 days period of time.

During the state of emergency, a series of measures in the field of labor and social protection shall become applicable, including the following:

To begin with, Article 31 of the Decree states that, by order of the Minister of Labor and Social Protection, social protection measures will be established for employees and their families in economic sectors in which activity is affected or stopped in whole or in part by decisions of the public authorities during the state of emergency.

At the same time, under Article 33 of the Decree, it is stated that privately owned companies are required, where possible, to introduce home-based or teleworking during the state of emergency, by unilateral act of the employer.

During the state of emergency, the territorial labor inspectorates are also suspended from carrying out checks on employers, with the exception of checks ordered by the Minister for Labor and Social Protection, those ordered by the Labor Inspectorate to implement the decisions of the National Committee for Special Emergency Situations, those required to follow up complaints of highly dangerous social acts and to investigate accidents at work.

Last but not least, Article 35 of the Decree specifies that collective labor contracts and collective agreements remain valid during the state of emergency.

II. Actual Remedies Available to the Employer and Employees

Independent of the actual duration of the state of emergency, in order to mitigate the negative effects on the economy caused by the measures adopted at national and international level to combat the spread of the SARS-CoV-2 coronavirus, the potential remedies available to the Employer (and also to Employees) are as follows:

2.1. Temporary work at home

The Employer may order a temporary change of workplace at the Employee's home, in accordance with the provisions of Articles 108-110 of the Labor Code, unilaterally, in accordance with the provisions of Article 48 of the same Code, or by agreement of the parties.

In view of the applicable provisions of Decree No. 195/2020, it follows that, in order to establish temporary work at home, it is sufficient to issue a unilateral decision by the Employer, and the employee's agreement is not required.

In any case, in our opinion, the following elements must be expressly specified in the unilateral decision of the employer:

- the fact that the employee works from home;

- the period during which this measure applies;

- the timetable under which the employer is entitled to control the work of his employee and the specific method of carrying out the control;

- the employer's obligation to ensure the transport to and from the employee's home, where appropriate, of the raw materials and materials he uses in his work and the finished products he produces, where appropriate. In this case, the employer is obliged to provide occupational safety and health training for workers.

2.2. Telework

Another remedy for both sides of the employment relationship is teleworking.

Normally, teleworking can only take place following the conclusion of an addendum to the individual employment contract, under the conditions laid down by Law no. 81/2018 on the regulation of teleworking.

However, under the provisions of the Decree, teleworking can be carried out by unilateral decision of the employer, without the employee's consent.

In our opinion, such a decision issued by the employer must take into account the following elements:

- express indication that the employee is teleworking;

- the period and/or days during which the employee works at a workplace organized by the employer;

- place/ places of teleworking;

- the timetable within which the employer is entitled to check the teleworker's work and the concrete way in which the check is carried out;

- the arrangements for recording the hours worked by the employee;

- the responsibilities of the parties according to the place/ places of telework, including occupational safety and health responsibilities;

- the employer's obligation to ensure the transport to and from the place of teleworking of the materials that the teleworker uses in his/her work, where applicable;

- the employer's obligation to inform the teleworker of the provisions of the legal regulations, the applicable collective labor agreement and/or internal rules and regulations on the protection of personal data and the obligation of the teleworker to comply with these provisions;

- the conditions under which the employer bears the costs of telework.

2.3. Suspension of the Individual Employment Contract, at the initiative of the Employer, on the basis of Art. 52 lit. c) Labor Code

The case of suspension under Art. 52 lit. c) of the Labor Code refers to the suspension of the Individual Employment Contract at the initiative of the Employer, in the event of interruption or temporary reduction of its activity, without termination of the employment relationship, for economic, technological, structural or similar reasons.

Normally, during the reduction/interruption, employees should have received an allowance paid from the salary fund which cannot be less than 75% of the basic salary corresponding to the job held.

However, one of the measures proposed to support economic operators in the context of the spread of the COVID-19 pandemic is to pay the compensation of employees on technical unemployment from the state social security budget for 2020.

The measure concerning the payment of the technical unemployment benefit by the State is mainly aimed at employers directly affected by the measures taken by the Executive, i.e. companies operating in at least one of the following sectors: transport, tourism, HORECA, event organization, advertising, private education and related activities, the clothing, footwear and leather goods industry, services to the public.  The aim is thus to encourage and support economic operators by tipping the balance in favor of the employer and shifting the costs of technical unemployment to the state.

Relevant from this perspective is also the case law of the Constitutional Court, which has previously held in some of its decisions that the employer may suspend the individual employment contract if there is an objective reason for doing so, which does not depend on his exclusive will. In other words, the hypothesis of suspension refers to situations in which the employer demonstrates that it can no longer economically meet the demands of the market and, even if it were to reduce its activity, it would still be obliged to pay the employees' wages for the work that is no longer performed, leading to a situation in which the employer's rights would be irreparably damaged.

2.4. Suspension of the individual employment contract under Article 54 of the Labor Code

According to Art. 49 para. 1 Labor Code: Suspension of the individual employment contract may be executed by agreement of the parties, and according to Art. 54 of the Labor Code, the individual employment contract may be suspended, by agreement of the parties, in the case of unpaid leave for study or personal interests.

Without going into exhaustive details referring to the above, we specify that, in the event that an agreement on the suspension of the employment relationship is reached between the employee and the employer on the basis of Article 54 of the Labor Code, such suspension should take place in compliance with the provisions of the Internal Regulations applicable at the level of each Employer, the Individual Contract of the employee concerned and the applicable provisions of the Collective Labor Contract, as the case may be.

Independent of the internal regulations specific to each Employer, suspension under Article 54 of the Labor Code shall be based on a written request from the Employee.

Please note that the applicable legislation does not establish any special substantive or formal requirements for such requests, nor does it require the Employee to provide a detailed statement of reasoning for requesting unpaid leave for personal reasons. For instance, in support of such a request, the closure of nurseries, kindergartens and schools and the need for the employee concerned to remain at home may also be taken into account.

In any case, the expression of the Employer's consent can be exemplified in several ways. In our opinion, and including taking into account the measures to prevent the spread of the SARS-CoV-2 coronavirus, as well as the general recommendations of the Ministry of Labor and Social Protection, it is advisable in this case to issue a suspension decision by the Employer's management bodies as a result and as evidence of the validation of the Employee's request.

2.5. Suspension of the individual employment contract on the basis of Art. 50 lit. c) Labor Code

In the event of a quarantine status being established by law, the individual employment contract will be suspended by operation of law in accordance with Article 50 lit. c) of the Labor Code.

Textually, according to Article 50 of the Labor Code, the individual employment contract is suspended by right in the following situations: (...) c) quarantine; f) force majeure; i) in other cases expressly provided for by law (...).

During the quarantine period, the employee is forbidden access to the workplace and the  main effects of the contract are suspended: work performance and salary payment.

During the period of suspension, the employee does not work and does not receive a salary, but may receive the quarantine allowance provided for in Article 20 of GEO No 158/2005 (75% of the average monthly income of the last 6 months of the 12 months of the contribution period).

Suspension from work in order to limit the spread of the effects of a contagious disease can only take place on the basis of a certificate issued by the Public Health Department, at the request of the employer or the employee.

2.6. Suspension of the Individual Employment Contract on the basis of Article 50 lit. f) of the Labor Code

Last but not least, the case of suspension of the employment relationship governed by the provisions of Article 50 lit. f) of the Labor Code in the event of force majeure must also be taken into account.

It should be noted here that force majeure means any external, unforeseeable, absolutely invincible and unavoidable event, in accordance with Article 1351 of the Civil Code.

We therefore consider that this measure would represent an alternative to the suspension of employment relations under Art. 52 lit. c) Labor Code (technical unemployment).

To begin with, we would point out that, according to the provisions of Article 1351 of the Civil Code, force majeure means any external, unforeseeable, absolutely invincible and unavoidable event.

Force majeure is also referred to in Article 4 para. 3 of the Labor Code, the latter being mentioned by the legislator in the context of cases in which the employer may require his employees to perform forced labor - "war, catastrophes or danger of catastrophes such as fires, floods, earthquakes, epidemics or violent epizootics, animal or insect invasions and, in general, in all circumstances which endanger the life or normal living conditions of the population as a whole or part thereof".

As such, epidemics and even more so pandemics (as in this case) would theoretically fall under the notion of "force majeure" in labor law.

We therefore anticipate that the burden of proof (on the employer) will not be as difficult as usual, as epidemics are recognized by the Labor Code as force majeure.

The above conclusions are valid if the employees' individual employment contracts do not contain any derogating provisions on force majeure.

In another course of ideas, please note that even though no prohibition has been imposed so far in the sense of suspension of individual employment contracts on grounds of force majeure, there have been communications from the Ministry of Labor urging employers to use suspension of employment contracts on grounds of force majeure only as a last resort - e.g.: https://www.startupcafe.ro/taxe/coronavirus-covid-clauza-forta-majora-patroni-salariati.htm

Moreover, there have been proposals (of Emergency Ordinances) to prohibit the suspension of employment contracts under 

Art. 50 lit. f) of the Labor Code for the duration of the state of emergency. Such a measure has not been adopted so far.

Given this inclination of the public authorities to protect employees during this period, we anticipate that in the event of a possible dispute (i.e. challenge of the suspension decision by the employees), it is possible that the courts will not limit themselves strictly to the formal analysis of the incidence of force majeure, but will take a protective attitude towards the employees.

2.7. Termination of the individual employment contract

A final remedy to which we will refer is the termination of individual employment contracts.

It should be noted here that Decree No 195/2020 does not regulate exceptions to this subject, which is why the ordinary provisions of the Labor Code and the Social Dialogue Act remain applicable. Thus, the provisions of Article 65 et seq. Labor Code, relating to dismissal for reasons not related to the person of the employee, respectively the termination of a / some jobs shall remain applicable.  

Cluj-Napoca, 17.03.2020

MAXIM / Associations