In the current difficult situation, perhaps every employer is solving how to reduce their operating costs. The most pervasal area in this respect is the labour costs of employees. The question therefore is how the employer can proceed if he wishes to retain the employee, but at the same time wants to reduce his costs. The Labour Code offers employers several options in the current situation, but some preconditions must be met.
Compensation of wages when the activity is restricted
As things turn out, unless the employer has the job to assign to the employee, this is considered an obstacle on the part of the employer and the employee is obliged to provide compensation of 100% of his average earnings.
This is liquidating for many employers and not sustainable in the long term. In order for the employer to avoid 100% compensation for the employee's salary, one of the following would have to occur.
Reduction of compensation from 100% to 60%
However, unless there is a trade union body with the employer, the employer cannot reduce the compensation to 60% or agree with the employee. A trade union body may operate with an employer if the employer employs at least three employees.
Treating a family member
If the staff member takes care of a child up to the age of 11 at home, he is entitled to treatment paid by the Social Insurance Agency throughout the quarantine period. In that case, the employer does not pay him compensation. However, the employer cannot compel the employee to register with the Social Insurance Agency to receive treatment in order to avoid paying 100% compensation.
The organisers themselves, who receive remuneration for the performance of their duties as manager, are also entitled to treatment if they are caring at home for a child up to the age of 11, but may not receive any remuneration during the period of care of the child.
Where a staff member is ordered to be quarantined because of the possible spread of the coronavirus, they do not apply to sickness rules such as normal sick leave i.e. the employer reimburses the employee for compensation for the first three days of 25 % and for a further seven days 55 % of the basis of assessment. If the employee has been ordered to be quarantined due to the possible spread of the coronavirus, the employee is reimbursed not by the employer but by the Social Insurance Agency from day one at the rate of 55 % of the basis of assessment.
However, even in this case, the employer cannot compel the employee to register to receive sickness benefit from the Social Insurance Agency.
Taking a vacation
Although this measure does not immediately reduce the employer's wage costs, since, when taking leave, the employer reimburses the employee for the average wage, but if the employment relationship with the employee ceases, the employer will not be obliged to reimburse the employee for the leave thus spent.
However, the employer may not order the employee to take day-to-day leave, he must notify him at least 14 days in advance and, in the case of collective leave, the taking of leave may not exceed two weeks.
Taking compensatory leave for overtime
Where the employee has previously had overtime for which the employer and the employee have agreed to be exhausted by the employee, the employer may agree with him to take compensatory leave. If the employee does not agree because he/she wanted to take compensatory leave in the summer, for example, the employer may order him to take it in such a way that he is exhausted within 4 months.
Although this measure will not reduce the employer's wage costs immediately, since, when the compensatory leave is taken, the employer reimburses the employee for the average wage, but if the employment relationship with the employee is ended, the employer will not be obliged to reimburse the employee for the unused overtime hours.
Reduction of working time
In the event that the employee is willing to take part-time, the employer will save the wage costs immediately. Employees will now be more accessible to part-time, otherwise they will be exposed to the risk of dismissal by the employer because the employer cannot assign them work to the extent agreed.
Reduction of remuneration
The employer may also agree with the employee to reduce the remuneration for the work performed. Even this measure will not be popular forthe employee , but given the current situation, it may be better for the employee to receive a lower remuneration than to risk his employer going bankrupt. In the event of a reduction in the remuneration for the work performed, the minimum wage provisions for a particular degree of difficulty must be complied with.
Likewise, executives who are employed by their own companies can immediately reduce their remuneration for the performance of their duties as manager, thereby also reducing their tax burden. Unlike employees in employment, executives in receipt of remuneration for the performance of their duties as manager do not have to comply with the minimum wage provisions and can choose any level of remuneration.