What actions can be taken by an employer who, due to the downturn caused by the coronavirus pandemic, has faced the necessity to reduce working hours or remunerations?
The situation caused by COVID-19 has had a significant impact on employers and its effects will be felt over a long period of time. The introduction of restrictions to counteract the pandemic and the associated decline in turnover have forced a large number of employers to liquidate their businesses or reduce employment. Most employers also plan to reduce working time and remunerations. So how can they do this?
Learn more: Obligations of employer in a collective redundancy situation
Working time and remuneration reduction under the Labour Code
The reduction of working time and remuneration may take place on the basis of the Labour Code provisions and in the form of:
- Agreements with employees – working terms and conditions specified in the employment contract, including the working time and the employee’s remuneration, may be changed by agreement with an employee. By concluding such an agreement, both parties agree to amend the conditions set out therein. The agreement amending the terms and conditions of the employment contract should be concluded in writing. Its content should indicate which terms and conditions of the employment contract are changed and determine the content of the new terms and conditions of work or pay, as well as the date from which the new terms and conditions will become effective.
- Amending termination notice – if there is a possibility that an employee may reject a proposal to enter into an amending agreement, an employer may terminate working or pay conditions. It is a unilateral action of an employer to change the content of an employment contract – in practice it means modifying its content to the detriment of an employee. The notice of termination may concern the conditions of the employment contract of any type, i.e. contracts for a trial period, for a fixed period and for an indefinite period. Employer presents new working terms and conditions to an employee in writing, and the employee may refuse to accept the proposed terms and conditions within the period of half the notice of termination of the contract on the basis of which he provides work (2 weeks, 1 month, 3 months). If the employee does not declare a refusal to accept the proposed terms and conditions before the end of the half period of notice, he shall be deemed to have agreed to those conditions. Refusal to accept the proposed terms and conditions shall result in termination of the employment contract as of the end of the notice period.
When reducing remunerations, the principle of equal treatment should be applied. Under this principle, employees are entitled to equal pay for equal work or for work of equal value. Violation of this principle may result in the liability of an employer for damages.
Director of the Labour Law Department, Attorney-at-law
TGC Corporate Lawyers
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