Don’t Let Your Employees Go

New Instrument for Maintaining of Jobs

Employers may face obstacles which force them to limit their business activities and reduce the number of employees. Several lockdowns during the Covid-crisis in the past two years are perfect and fresh examples. To avoid this, a new instrument for maintaining of jobs has been introduced as of March 2022. 

Troubles while conducting business

The newly established instrument focuses on employers whose business activities are limited due to external factors of a temporal nature, such as the state of emergency as repeatedly declared during the coronavirus pandemic, vis major etc. But even if the employer experiences such problems, it does not automatically mean that its business activities are limited. Under the new Act, business activities limitation occurs only in case that the employer cannot assign work to at least 1/3 of employees to the extent of at least 10 % of weekly working time.

Conditions for applying for financial support

Provision of financial support is conditioned by fulfilment of specific conditions. It is worth to mention namely those, which relate to employer’s previous discipline. Only those employers may apply for financial support who have (i) not violated the ban on illegal employment in the previous two years and (ii) duly paid social insurance premiums and compulsory contributions to pension savings during the entire duration of this obligation. Such period shall however amount to not less than 24 immediately preceding months.

Another prerequisite of applying for financial support is a written agreement with the employees’ representatives or directly with the employees. If such agreement cannot be reached, e.g. the employee disagrees to enter into such agreement, this issue can be submitted to an arbitrator. The arbitrator duly examines the whole issue and decides whether the corresponding application for financial support can be filed or not. Prior to request the arbitrator for assistance, the employer shall consider that the arbitrator is entitled to remuneration which shall be borne by the employer.

Amount of financial support

The financial support serves for partial payment of employer’s costs related to employee’s wage compensation for each hour of business activity limitation. The sum of financial support for such hour amounts to 60 % of the employee’s average hourly earnings, but not more than EUR 7.81 per hour (this sum shall apply in 2022). Employees to whom the financial support applies, shall meet specific criteria, including inter alia the following: (i) the respective employment relationship has lasted at least one month, (ii) the employee is not in a termination period and (iii) the employee exhausted the holiday for the previous year. 

Consideration for financial support

As already mentioned, the main idea of the new instrument is to keep jobs. The employee’s position, for which the financial support has been provided, shall be maintained for at least two months following the month, for which the financial support has been provided.

To sum it up

All efforts aimed at “saving” jobs and keeping business going are welcomed by the business community. There are no doubts that the newly established instrument meets these aims. As the whole procedure of applying for financial support as well as the underlying conditions are rather comprehensive, we will gladly provide you with our assistance in this respect.

By JUDr. Valter Pieger and Mgr. Renáta Konštiaková

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