COVID-19: Termination of Employment Agreement and State of Emergency

COVID-19: Termination of Employment Agreement and State of Emergency
2021-05-14 by Serbian Immigration
Since a state of emergency has been declared and preventive measures have been taken to prevent the spread of the virus (coronavirus SARS-Cov2 spreads the disease COVID-19a), many employers and employees soon found themselves facing difficulties. .

  1. Government measures affecting employers’ finances
    The introduction of restrictions on freedom of movement and freedom of assembly in companies, cafes, restaurants, bars, shopping centers, markets, etc., restrictions on working hours, and obligations related to work organization will undoubtedly bring financial problems to employers. Financial forecasts are like this. In the long run, business performance is unsustainable.

In addition, the government has imposed restrictions on retail prices and profit margins on the export of certain products, medicines and certain disinfectants, and the export of certain groceries and protective equipment. Measures affecting the company also include long-term isolation of employees from abroad, restrictions on public transportation that cause transportation problems for employees, and closed borders for passengers and employees traveling abroad.

Considering that the world is currently adopting the same or similar measures, the economic downturn is inevitable, and the financial consequences are beginning to appear. According to the official report of the Organization for Economic Cooperation and Development (OECD), due to the terrorist attack in the United States, the economic shock and uncertainty caused by the epidemic has exceeded the shock and uncertainty of the global crisis in 2001; and during 2008, The United States has also experienced a financial crisis. Economic growth is expected to halve, and the world’s largest economy will fall into recession.

Regulations on tax measures for mitigating the economic consequences of the COVID-19 disease caused by the SARS-Cov2 virus in a state of emergency (RS Official Gazette, No. 38/2020), granting taxpayers the time to reschedule their payment plans from 2020 With the beginning of the state of emergency due in March, tax debts will not be threatened by enforcement, nor will they be threatened by interest calculations (if they fail to pay). However, the regulations and the suspension of bank loans and leases are the only measures to provide financial relief to companies, and no subsidies, tax exemptions or repayment of taxes and other forms of taxation have been adopted.

Certain companies are restricted by the government (for example, cafes, restaurants, and other companies may only use counters or delivery services to sell food and beverages), or are prohibited from engaging in commercial activities (shopping malls, boutiques, restaurant chains, and shopping centers) Or cafe) other large indoor facilities, private kindergartens, etc.).

  1. Organizational work model as an alternative to layoffs
    All problems can be solved by introducing different models of company organization work. These models are alternative methods of dismissing employees and can be applied before deciding to terminate the employment agreement. In the previous separate blog, all company restructuring work models except for dismissal and termination of employment agreements were discussed in detail.

Some employers try to continue their business activities in whole or in part by implementing the work methods stipulated in the Employment Law, such as working from home or part-time work
. However, a large number of employers have completely suspended their work. Even if they decide to adopt the minimum wage, it is impossible to determine whether they will be able to pay their employees salaries and salary compensation.

Related to this, the issue of terminating the employment agreement is inevitable.

  1. Resignation of employees
    Although the Minister of Labor Zoran Đorđević announced that the list of employers who have illegally terminated their employment agreements will be announced, legal and legal dismissal and dismissal of private sector employees cannot be prohibited. Due to the mandatory provisions of the Employment Law and the fact that employers provide funds to enterprises and determine the distribution of funds, the prohibition cannot be implemented. So far, employers in the private sector are only advised not to fire their employees and try to keep them employed for long periods of time.

According to the Employment Law, the employment contract can be terminated if there are legitimate reasons related to the needs of the employer, and the demand for a specific job is stopped or the workload is reduced due to changes in technology, economy or organization. . Therefore, employees can only be fired when they stop performing a particular job or reduce the workload due to technological, economic or organizational changes. In a state of emergency, economic changes within companies and entrepreneurs are usually the cause of dismissal.

If the company terminates the employment agreement, it must not hire other people to perform the same work within three months from the date of termination.
Dismissed employees have priority in signing employment contracts during these three months.

However, when terminating an employment contract based on changes in the company’s economy, employers should be especially careful for a variety of reasons. First of all, it is necessary to really make changes in technology, economy or organization, and make the execution of certain tasks unnecessary. This must be determined in each specific case. Secondly, in order to legally terminate the employment agreement, the termination procedure must be executed accurately, which means that the legal arguments and reasoning must be perfected to protect the employer. Otherwise, errors and omissions may have a negative impact on court litigation and litigation.

Considering that the dismissal procedures with these companies are much more complicated and involve strict legal procedures for handling employee layoffs, employers (including companies and entrepreneurs) with a large number of employees must be very cautious.

There is no doubt that because the government has adopted measures to prevent the spread of the virus, many employers are facing business interruption, which will greatly affect the survival of corporate entities. But, despite this, we want to emphasize that at the moment we discussed in another blog, there are other ways to keep as many employees as possible and decide to terminate the employment agreement only if: necessary.

*The content of this blog is for reference only and does not constitute legal advice.

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