Coronavirus SARS-CoV-2 – Selected questions and answers from the field of labour and social security law

The Federal Minister of Health Jens Spahn regarded Germany at the beginning of an epidemic at the end of February. In the meantime, the World Health Organization (WHO) went one step further and classified the outbreak of the corona virus SARS-CoV 2 as a pandemic. Governments worldwide are taking drastic measures to slow down the spread of the virus. Across Germany, the population is currently asking itself how to deal most effectively with the almost unknown situation. In addition to the health risks, the coronavirus poses a particular threat to the economic stability. The financial markets are reacting to the situation with drastic stock market slumps. Also employers have to face new challenges. The economy is already struggling with supply bottlenecks and a rapidly declining order situation. In addition, it is important for employers to provide the best possible protection for their own employees against infection.

What employers need to know right now is answered in the following.

How can short-time work help to deal with crises?

The purpose of short-time work is to enable employees to continue working in the event of temporary operational interruption, to avoid redundancies and to secure the continued existence of the company even in a crisis situation. With short-time work, an employer can react appropriately to an economically difficult situation. Even during the economic crisis of 2008, short-time work successfully helped the German economy to overcome the crisis.

Can the employer instruct short-time work?

The employer cannot unilaterally instruct short-time work by instruction, it requires a special legal basis for this. This may have been contractually agreed or may result from a works council agreement or a collective bargaining agreement. If there is no legal basis, short-time work can only be instructed by means of a corresponding addition to the employment contract, i.e. with the employee’s consent or by acceptance of the employee without objection. Otherwise, the employer can instruct shorter working hours, but has to continue to pay the full remuneration.

What are the requirements for receiving short-time work benefits?

The employer or the works council is responsible for asserting the claim to short-time work remuneration. In order for employees to be able to receive short-time work remuneration from the Federal Employment Agency, there must be a substantial loss of working hours for operational reasons or due to an unavoidable event, which is temporary and unavoidable.

If the requirements are met, short-time work remuneration is granted for a maximum of 12 months, unless this period is extended to 24 months by a legal regulation.

What are the legal changes with regard to the amount of the short-time working allowance?

The amount of the short-time work remuneration is calculated according to the net loss of remuneration. As a rule, short-time workers receive 60% of the lost flat-rate net remuneration in the first 3 months of short-time work. In households with at least one child, this rate rises to 67%.

On 29 April 2020, the Federal Cabinet adopted the draft law on the so-called Social Protection Package II. The Social Protection Package II implements the measures on which the coalition government agreed on 22 April 2020. According to these measures, the amount of the short-time working allowance will be increased to 70% of the lost flat-rate net remuneration from the 4th month onwards. In households with at least one child, this rate rises to 77% from the 4th month onwards.

From the 7th month, the amount of the reduced hours compensation is increased to 80% of the lost flat-rate net remuneration. In households with at least one child, this rate rises to 87% of the lost net flat-rate pay.

A prerequisite for the increase in short-time work compensation from the 4th month is that the loss of work is at least 50%. In other words, short-time work with a reduction in working time of, for example, 30% would not result in a short-time worker being entitled to the new statutory increase in short-time work compensation from the 4th month. In this case, the previous rate of 60% or 67% would remain in place from the 4th month onwards.

What will be the key changes in labour law in the short term?

In view of the increasing burden on the German economy caused by the spread of the coronavirus, the legislator decided to lower the requirements for receiving short-time work benefits and to provide further support to employers by reimbursing social security contributions. The statutory relief will come into force retroactively as of 01 March 2020. This means that short-time work can be applied for and paid out already in March, with the benefits of the new legal requirements. Specifically, the Federal Government has been authorised to determine the following by statutory ordinance and without the approval of the Bundesrat:

• The threshold value that one third of the employees of a company must be affected by the operational interruption in order to apply for short-time work compensation can be lowered to the extent that only 10% of the employees must be affected.
• Temporary workers can receive short-time working compensation. Up to now temporary workers were excluded from receiving short-time working compensation.
• The need to use balances of working hours to avoid short-time working no longer applies in whole or in particular.
• Social security contributions paid by employers for employees receiving short-time work benefits may be partially or fully reimbursed.

The coalition committee of the grand coalition plans that the Federal Government should make full use of the opportunities now available to it. As a result, it can be expected that the Federal Government will reduce the threshold to 10% of the workforce by statutory order,  give temporary workers access to short-time work compensation, refrain from using working time accounts and fully reimburse employers’ social security contributions for employees in short-time work.

Is there a claim to compensation or continued payment of wages in case of quarantine?

In the case of quarantine, a difference has to be made according to whether the quarantine was ordered by the authorities and the employee is subject to a ban on employment, or whether the quarantine was ordered on the basis of a company directive.

In case of an official order and a ban on employment, the employees are entitled to compensation from their employer for a maximum of 6 weeks, which is calculated on the basis of the loss of earnings (§ 56 Para. 2 S. 1 Infection Protection Act – IfSG). The employer must pay the compensation to the employees and may, upon application to the competent authority, demand reimbursement of the amounts paid out (§ 56, para. 5, sentence 2 IfSG). From the seventh week onwards, employees receive the compensation in the amount of the sickness benefit directly from the competent authority. Since the employee has not been positively affected by the quarantine, but is only suspected of having contracted the disease, he is not entitled to continued remuneration. However, if the employee has tested positive, i.e. is ill, the Continued Remuneration Act applies and the employee receives continued remuneration in the event of illness (§ 3 EFZG).

If the quarantine is ordered on the basis of a company directive or an official order exists, but the employee is not subject to a ban on employment, the Infection Protection Law (IfSG) does not provide for compensation. The employee retains his or her right to compensation, as this is usually consideres as paid garden leave. However, he may be obliged to work from home if he has the technical and actual possibilities to do so.

Is there a right or possibility to work from home/in the home office?

Generally, employees are not entitled to work in a home office. On the other hand, without a corresponding agreement between the employer and the employee, there is also no obligation of the employee to perform his work in the home office, although a corresponding secondary obligation from the employment relationship (§ 241 BGB) can also be well represented here if the technical and actual possibility is given for this.

The possibility to work in the home office exists, if the respective workplace allows this. Such an assessment must be made on the basis of the tasks to be performed, the required technical equipment and the required data access. Since the employer is responsible for setting up the home office, he must consider whether the technical equipment, VPN accesses etc. are sufficiently available when deciding whether the employees will work in the home office. If work will be performed from home, it must also be observed there that occupational safety measures and data protection regulations must be observed and ensured accordingly. If the employee cannot perform work from home due to the nature of his work, the employee is basically obliged to perform the work owed by him under the employment contract “on site” in the company, as long as this does not become unreasonable for him according to § 275 III German Civil Code (BGB). For the time being, the employer may initially release the employee from work until further notice (in particular new sovereign measures such as extensive curfews or similar) only with continued payment of the corresponding remuneration. This is based on the employer’s duty of care and the fact that the employer basically bears the so-called economic and operational risk.

Are employees insured against occupational accidents during their work in the home office under the general accident insurance?

In principle, employees who perform work at home are insured against accidents by the competent employers’ liability insurance association in the same way as employees who physically work in the company. However, this only applies in the room that the employee uses for work from home.

Normally, not covered are routes within the private living space, such as the way to the kitchen to get something to eat. If the employee interrupts his work for private purposes, there is no accident insurance cover through the employer’s liability insurance association during this time.

Conclusion: Decisive for the statutory accident insurance protection in the home office is what kind of work the employee is doing at the moment of the accident and for what purpose.

Are employees entitled to remuneration from their employer if their childcare is no longer available?

Employees who are unable to go to work because of the currently closed day-care centres and schools and who therefore have a loss of earnings are entitled to compensation from their employer in accordance with the new § 56 para. 1 a IfSG. The prerequisite for compensation is that:

• the child to be cared for is under 12 years of age or is dependent on assistance due to a disability.
• the employee has custody as defined in § 1631 BGB or the child has been taken into the household as defined in § 33 SGB VIII.
• there is no other reasonable possibility of care, such as emergency care.

Compensation of 67 per cent of the monthly net income is possible for a period of up to six weeks, up to a maximum of EUR 2,016). However, this does not apply to employees who are on zero short-time work (and are therefore already receiving short-time work benefits) or during school holidays. Employers can apply to the competent state authority for reimbursement of the compensation paid.

What are the novelties regarding sick leave?

In order to prevent the coronavirus from spreading by visiting a doctor’s surgery, sick notes have been simplified. As of now, employees can obtain a certificate of incapacity to work for up to seven days after consulting a doctor by telephone. The certificate of incapacity to work is issued on the usual form and must be presented to the employer and the health insurance company. This applies to patients who are suffering from minor respiratory illnesses and therefore meet the criteria of the Robert Koch Institute for suspected COVID-19 infection, but who do not exhibit severe symptoms. This agreement between the GKV-Spitzenverband and the Kassenärztliche Bundesvereinigung initially applied for four weeks and was then extended until 19.4.2020. Actually, the special regulation was then supposed to expire. After considerable criticism, it was extended until 4.5.2020 and now until 18.5.2020.

Can the employer unilaterally revoke leave already approved because of the current (emergency) situation, since the employees are urgently needed in the company?

According to the prevailing “line” in case law, leave already granted cannot be revoked unilaterally by the employer, because according to case law the employer is bound by the declaration of exemption once it has been granted (for the purpose of granting leave). Accordingly, the date of leave determined by the granting of leave according to § 7 Federal Leave Act (BUrlG) can only be changed by mutual consent.

However, partially the view is shared that the employer can revoke leave once it has been approved in emergencies. These must be compelling necessities which do not allow any other way out, or – although the 2nd Senate of the Federal Labour Court is not responsible for leave law in an isolated obiter dictum. This is also represented in the literature in this or a similar way.

In cases of doubt, it is therefore probably best to first try to obtain the consent of the “holidaymakers” to the termination or postponement of the holiday, possibly “encouraged” by a “holiday waiver bonus”.

What are the possibilities if employees can no longer be employed due to a lack of orders and/or raw materials caused by the coronavirus?

In principle, the employer bears the operational risk. The employer’s possible actions in such a situation consist first of all in reducing time accounts, allowing fixed-term employment contracts to expire, terminating temporary employment relationships, possibly ordering short-time work or terminating employment for operational reasons, interrupting operations or closing down the business.

What are the possibilities of gradually increasing employment again after a lockdown?

In principle, the employer also bears the organisational and operational risk in this case. Depending on how flexible the working time regulations in the company make this possible, the employer’s options for action include short-time working (change in the quota), part-time models, changes in working hours, introduction or change in shift work and on-call work, job-sharing models and much more. Co-determination of working hours must be taken into account, provided that a works council exists in the company.

If working hours are increased again, the principle of equal treatment under labour law must also be observed. Reasons for unequal treatment would be objective distinguishing features such as different job contents, different knowledge of the employees and management responsibility of the individual employees. For example, only the “cheapest employees” would be allowed to return to work and the “expensive” employees would be left on short-time work for the longest time.

What are the employer’s duties of care after a lockdown?

In view of the unchanged high risk of an infection with COVID-19, the employer must take appropriate and sufficient measures for the health protection of his employees. These can vary depending on the specific nature of the company. However, general hygiene measures, special cleaning and disinfection of premises, the indication of the need for distance by means of appropriate signs and by thinning out office premises or production workplaces should be applicable to the vast majority of establishments. Co-determination also plays a role here.

Should you have any further questions regarding the current situation, please do not hesitate to contact us.

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Heike Hollwedel
Tel.: +49 (0)89 5790 6130
heike.hollwedel@pwc.com