Due to the introduction of the state of epidemic threat caused by the SARS-CoV-2 virus in Poland, many companies must face an entirely new reality.
Lack of supplies, decreased demand for the company’s goods or services, liquidity issues, and consequently, the inability to employ workers on the previous scale.
Remote work, additional childcare allowance, or deferred ZUS (Social Insurance Institution) contributions will not provide long-term solutions for employers.
How can a company reduce its obligations towards employees during periods of reduced income while simultaneously preserving jobs?
We present practical solutions for entrepreneurs.
UTILIZING LEAVE
Employees’ use of paid leave, unpaid leave, or requiring employees to take accrued overtime as time off—these solutions, agreed upon with the workforce, should be implemented as a priority.
Utilization of Paid Leave
An employer cannot unilaterally impose the use of paid leave on employees (Article 151 of the Labor Code), even during an epidemic threat. This applies to both “current” leave and accrued leave. However, certain actions are possible and justified in this regard.
Placing an Employee on Unpaid Leave
With the employee’s consent, they may be placed on unpaid leave (Article 174 § 1 of the Labor Code). The duration of such leave is not limited. It may be shortened or extended at any time upon mutual agreement of the parties.
Compensatory Time Off for Overtime
Compensatory time off for overtime work may be granted either at the employee’s request or by the employer’s decision. At the employee’s request, time off is granted on a one-to-one basis, i.e., one hour off for each hour of overtime worked. However, if the employer unilaterally decides to grant time off, it must be in an increased ratio, specifically 1.5 hours of time off for each hour of overtime worked (Article 151² of the Labor Code).
DECLARING WORK STOPPAGE
For some employers, the epidemic threat may necessitate a temporary suspension of business operations. The so-called “work stoppage” is essentially a temporary release of employees from their obligation to perform work. However, the employee is required to remain available for work during this period, which entitles them to remuneration as prescribed by law.
REDUCING WORK HOURS. SALARY REDUCTIONS.
Some companies experiencing a significant decline in revenue may be unable to sustain payroll obligations without reducing work hours and salaries.
It is important to know that reducing employees’ individually agreed-upon salaries or working hours is possible not only through individual agreements with each employee.
The Labor Code provides the option of concluding a so-called “crisis agreement” with the workplace trade union organization or employee representatives if justified by the employer’s financial situation (Article 91 § 1 and Article 231a of the Labor Code).
It is possible to suspend the application of certain provisions of workplace regulations regarding work conditions, remuneration, bonuses, or social benefit packages, including provisions on the granting of bonuses and awards. The agreement may also introduce less favorable employment conditions than those stipulated in individual employment contracts, such as salary reductions or partial job cuts.
Reducing employees’ working hours or salaries constitutes a change in working conditions and pay. Therefore, if a “crisis agreement” is not reached, it will be necessary to issue modification notices to employees (Article 42 of the Labor Code).
