Employment Law Update – Covid19

Exceptional and temporary measures concerning the epidemiological situation of the new Coronavirus COVID 19 were established by the Portuguese Government.

Decree-Law 10-A/2020, of March 13th provides measures aimed at the prevention, containment, mitigation, and treatment of the epidemiological infection.

The terms and conditions for the allocation of temporary and transitional support for employees and employers affected by the outbreak are defined in the Ordinance 71-A/2020, of March 15th. Conserving jobs and mitigating the financial impact on business is the main drive of this legal diploma.

 

Prophylactic isolation

As a measure of social protection against infection, employees who are temporarily unable to perform their activity due to the risk of contagion by COVID-19 (as determined by the Health Authority) must remain in prophylactic isolation (quarantined) for a period of, at least, 14 days.

A two-stage procedure has been implemented to decree the prophylactic isolation. First, the employee shall provide a statement of prophylactic isolation issued by the competent health authorities to be sent to the employer. The employer must submit, within 5 days, a declaration to Social Security Authorities (using the online platform Segurança Social Directa).

This situation is equivalent to hospitalization due to illness. The employee is entitled to receive an illness leave payment corresponding to 100% of the reference salary, within the first 14 days. If the isolation is extended, the employee is still entitled to the illness leave payment between 55% and 75% of the reference salary, depending on its duration.

On the other hand, if the employee needs to assist with the prophylactic isolation of a child or other dependent, the absence is considered as justified but leads to salary loss. The employee is entitled to an allowance paid by Social Security, corresponding to 65% of the reference salary.

However, if an employee is him/herself infected by COVID-19, the regime of temporary illness leave is applicable. The absence is considered justified and the leave is paid by the Social Security Authorities according to the duration of the worker’s illness.

 

Teleworking measures

As a measure of social distancing to prevent epidemiological infection, the general regime of teleworking was also amended.

Under this exceptional legal framework, teleworking can take place with no written agreement between parties. Where such a regime is feasible, the employee can unilaterally determine teleworking. On the other hand, the employee can impose in writing the performance of work from home, where normal standards of work performance can be guaranteed.

Because the employee will continue to perform regular work, remuneration schemes remain unchanged. The employee is entitled to receive wages in full and other compensation such as remuneration supplements and meal allowance, unless otherwise agreed in writing.

Nevertheless, where teleworking is not compatible, the employer remains obliged to adopt all necessary measures to promote health and safety at work. In this period, the employer shall comply with any recommendation issued by the Directorate General of Health, including isolating potential infected employees, despite prophylactic isolation not being attested.

Teleworking and prophylactic isolation may be compatible. A quarantined employee may be able to continue to work from home and in such an event, illness leave payment would not apply. The Teleworking remuneration scheme prevails.

The teleworking regime is designed for scenarios where companies can operate normally and is intended to protect individual and collective health in the face of epidemiological infection by the COVID-19 virus.

However, risk mitigation measures were also implemented in the event of a business crisis.

 

Lay-off

The Portuguese Government also approved a simplified lay-off regime to support the companies that may be affected by the COVID-19 outbreak.

This framework allows the temporary suspension of employment agreements of distress businesses, due to a business crisis.

For a company to be considered a distressed business, one of the following conditions must be met:

• Total interruption of the company/establishment’s activity due to the stoppage of global supply chains, suspension or cancellation of order
• An abrupt and sharp drop of at least 40% in sales, taking place in the last 60 days before applying for the lay-off, when comparing with the matching period of 2019*

*For companies which have started their activity during the last 12 months ago, the comparison is made with the average volume of sales since the start of the activity.

The employer is entitled to extraordinary financial support for maintaining employment, to be used for the payment of salaries.

As provided for in the Portuguese Labour Code, a gross salary equivalent to 2/3 of the employee’s gross remuneration, up to a maximum of Euro 1.905,30 (3 RMMG), is granted, 70% of which is paid by the Social Security Authorities and 30% by the employer.

The support is granted for a month but can be extended up to a maximum of 6 months.

At the same time, this framework may be combined with the aspect of professional training.

The criteria and legal requirements of the simplified lay-off require further legislation which has not yet been enacted.

Nevertheless, the Labour Code already establishes a set of mechanisms to be implemented in case of business crises. Besides temporary suspension of employment agreements, the employer is also entitled to reduce the normal working periods and the employee is paid a portion of 2/3 of gross remuneration.

In the event of a company shutdown or decrease in the activity due to unforeseeable circumstances or force majeure, the employee is entitled to 75% of the remuneration.

 

This article will be updated as new laws are enacted.

 

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