As the state of crisis came to an end on 25 June 2020, the Government announced that the mechanism of short-time working due to force majeure/COVID-19 in force since the month of March will expire at the end of June. However, considering that a large number of companies will continue to suffer from the negative effects of the health crisis beyond the end of the crisis period, it has been decided to continue to support them through the instrument of short-time working.
Short-time working due to structural or cyclical factors
From July and until the end of the current year, four possible ways of qualifying for short-time working allowances will be available to companies. These four possibilities of access to short-time working will either be based on the scheme for short-time working due to structural reasons, or on the scheme for short-time working due to cyclical factors.
As a reminder, short-time working due to structural reasons is designed to support businesses experiencing structural difficulties, i.e. difficulties connected to the company’s legal, social, tax or commercial organisation. As a principle, companies that have recourse to this scheme must draw up a recovery plan, and can lay off workers, where required, during the structural short-time working period, provided that the redundancies form part of the recovery plan.
Short-time working due to cyclical factors is designed to support businesses that are part of a crisis-struck sector or an economic branch and encountering economic difficulties. It is up to the government to decide to make a branch of the economy eligible for the scheme. In practice, at the time of the first application, the situations of the sector and the company concerned are analysed. The Government then declares the economic sector to be in crisis and at the same time admits the firm concerned to cyclical short-time work. Companies that use this scheme undertake not to make employees redundant for economic reasons.
Four possible ways to apply for short-time working from July to December 2020
In the context of the health crisis, the government will thus put in place as from July four new possible ways to access short-time working, inspired by the two mechanisms described above, the scheme to be chosen depending on the sector of activity carried out:
1) Companies in the “HORECA” (hotels, restaurants, cafés), tourism and events sectors, which are considered as vulnerable sectors, will be able to benefit from a short-time working scheme due to structural economic difficulties through an accelerated procedure (i.e. without the need to draw up a recovery plan), and with no limitation on the number of employees entitled to it. Where there is a proven need, these companies will be able to carry out economic redundancies up to a maximum limit of 25% of their employees until 31 December 2020.
The provisions provided for by the Labour Code concerning in particular collective redundancies (i.e. obligation to enter into negotiations with employee representatives with a view to reaching an agreement on the establishment of a social plan) will remain fully applicable. In addition, in the event of recovery, companies that would have carried out redundancies will, in the event of subsequent recruitment of staff, have to rehire as a matter of priority their former employees who were made redundant.
2) Other commercial companies affected by the health crisis, other than industrial businesses and those in vulnerable sectors, will also be able to have recourse to short-time working due to structural economic difficulties through the accelerated procedure, provided they do not carry out redundancies.
In this case, however, the number of employees covered by the scheme may not exceed 25% of the workforce for the months of July and August, 20% for the months of September and October and 15% for the months of November and December.
3) By way of exceptions to points 1) and 2) above, applications from businesses in vulnerable sectors making more than 25% of their workforce redundant, as well as those from all other businesses contemplating carrying out redundancies, will be required to submit a so-called "traditional" short-time working application for structural economic difficulties. Admission to the short-time working scheme will therefore be granted only if the companies draw up restructuring plans (including precise commitments that the business intends to undertake according to an agreed timetable).
These plans will be drawn up in the form of a recovery plan in the case of small firms with fewer than 15 employees, or in the form of a job maintenance plan for firms with more than 15 employees (the Government's stated objective in the latter case being to negotiate, as far as possible, sectoral job maintenance plans in order to be able to have recourse to temporary loan of workforce).
4) Finally, industrial companies will continue to benefit from the cyclical short-time working scheme provided for by the Labour Code in order to be able to respond to disruptions in international markets. Please note that companies that use this scheme undertake not to make employees redundant for economic reasons.
In any case, companies eligible to one of the four schemes detailed above should be reimbursed the compensatory allowance paid to each eligible employee (i.e. 80% of the gross salary) by the State, up to 250% of the social minimum wage (i.e. EUR 5,354.98), on the basis of a monthly statement sent by the employer.
Deadlines to apply for short-time working
Applications for short-time working for the month of July had to be submitted at the latest on 26 June inclusive.
From August until the end of the year 2020, applications for short-time working must be sent at the latest on the 12th day of the month preceding the requested period of short-time working (e.g. before 12 September for an application for short-time working relating to the month of October).
Before submitting an application, companies will be required to confirm, by means of a specific declaration, that the employees, respectively, the staff delegation and, where applicable, the trade union organisations have been informed of the application for short-time working.