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Exceptional and temporary measure to protect jobs in the context of the COVID-19 pandemic

On March 26, 2020, Decree-Law No. 10-G / 2020 was published (meanwhile rectified with Statement of Rectification No. 14/2020, of March 28), which establishes exceptional and temporary measures protection of jobs, in the context of the pandemic of COVID-19, with a view to maintaining jobs and support in situations of business crisis caused by that.

Applications for exceptional measures approved by the Government with a view to maintaining jobs and mitigating business crisis situations:

A. To whom do these measures apply?

To employers in the private sector, including those in the social sector, and workers in their service who are affected by the COVID-19 pandemic and who are consequently in a situation of business crisis.

 

B. What is meant by a business crisis situation?

Integrate the concept of business crisis situation:

a) The total or partial closure of the company or establishment, in relation to the establishment or company effectively closed and covering the workers directly related to them, whenever such closure results:

  • The duty to close facilities and establishments, provided for in Decree No. 2-A/2020, of 20 March;

  • Legislative or administrative determination, pursuant to Decree-Law No. 10-A/2020, of 13 March;

  • Under the Basic Civil Protection Law, approved by Law No. 27/2006, of 3 July;

  • Under the Basic Health Law, approved by Law No. 95/2019, of 4 September.

b) The total stoppage of the activity of the company or establishment that results from the interruption of global supply chains, the suspension or cancellation of orders, which can be documented;

c) The abrupt and sharp drop in at least 40% of the verified turnover:

  • In the period of thirty days prior to the request from the competent social security services, with reference to the monthly average of the two months prior to that period; or

  • Compared to the same period of the previous year; or yet,

  • For those who started the activity less than 12 months ago, the average of that period.

 

C. What are the government's measures?

  • Extraordinary support for maintaining an employment contract, with or without training, in the event of a temporary reduction in the normal working period or suspension of the employment contract;

  • Extraordinary training plan;

  • Extraordinary financial incentive to support the normalization of the company's activity;

  • Temporary exemption from the payment of Social Security contributions, borne by the company.

 

 

 

D. After all, what is the simplified Lay-off?

It is an extraordinary support for the maintenance of employment contracts in a business crisis situation, with or without training, with the following characteristics:

  • Procedure:

The employer communicates the respective decision in writing to the employees, indicating the expected duration, after hearing the union delegates and workers' committees, if any, and immediately sending an electronic request to the competent social security department accompanied by:

          a) Employer's statement containing a brief description of the business crisis situation affecting him;

          b) Certificate of the company's certified accountant in the cases provided for in points b) and c) above;

          c) Nominal listing of the workers covered and their social security number.

 

  • Duration of support:

This support lasts for one month, being exceptionally extendable monthly, up to a maximum of three months.

 

  • Measures to be applied to workers:

    • Suspension of the contract; or

    • Reduced working time.

 

  • Retributive compensation and financial support from the State:

    • During the period of reduction or suspension, the worker is entitled to remunerative compensation to the extent necessary, in conjunction with the remuneration for work performed in or outside the company, to ensure a monthly amount equal to two thirds of his normal gross remuneration, or € 635.00 on a full-time basis, whichever is higher, up to a maximum of € 1,905.00.

    • During the period of application of the measures, the company is entitled to financial support for the purpose of paying the compensation in the amount corresponding to 70% of the latter.

    • Without prejudice to the above, the compensation is paid by reference to the normal gross remuneration for the work performed in the company, and the Social Security services must subsequently make the necessary adjustments, with any refund of the amounts unduly received.

 

  • Temporary exemption from payment of Social Security contributions:

    • Companies are entitled to a total exemption from payment of Social Security contributions, in relation to the workers covered and the respective members of the statutory bodies.

    • However, workers' contributions are maintained, and companies must submit autonomous remuneration statements for the workers covered.

    • The exemption lasts for one month, being exceptionally extendable monthly, up to a maximum of three months.

  

  • Extraordinary financial incentive to support the normalization of the company's activity:

Employers who benefit from the simplified Lay-off are entitled to an extraordinary financial incentive to support the resumption of the company's activity, to be granted by IEFP, I.P., paid in one lump sum and with a value of €635.00 per worker.

 

  • Ban on redundancies:

During the period of application of the support measures, as well as in the following 60 days, the employer cannot terminate employment contracts of workers covered by those measures, under the terms of collective dismissal or dismissal for the extinction of the job.

 

  • Contributory and tax situation:

    • Access to these measures implies that companies have, evidently, their contributory and tax situations regularized before Social Security and the Tax Authority.

    • However, until April 30, 2020, debts incurred in March 2020 are not include.

 

E. In what situations is the company obliged to return the support?

Failure by the company or the employee to comply with the obligations related to the support implies the immediate cessation of the same and the refund or payment, as the case may be, total or proportional, of the amounts already received or exempted, when any of the following situations occurs:

  • Dismissal, except for reasons attributable to the worker;

  • Punctual non-compliance with retroactive obligations due to workers;

  • Non-compliance by the company with its legal, tax or contributory obligations;

  • Distribution of profits during the term of the obligations arising from the granting of the incentive, in any form, namely by way of withdrawal on account;

  • Non-compliance, attributable to the company, of the obligations assumed, within the established deadlines;

  • Provision of false statements;

  • Provision of work to the company itself by a worker covered by the extraordinary support measure for the maintenance of an employment contract in the form of suspension of the contract, or beyond the established schedule, in the form of temporary reduction of the normal working period.

 

 

 

F. Entry into force and effect?

This law came into force on March 27, 2020 and takes effect until June 30, 2020 and is expected to be extended for another 3 months.

Author: Elisabete Basto

Date: 30-03-2020

Contacts: elisabetebasto@bsa-advogados.com, lourencodealmeidaesilva@bsa-advogados.com and joanamateus@bsa-advogados.com