The coronavirus has greatly affected the daily business activities of many companies. Offices and factories have closed, and employees have been forced to stay home. We expect employers, on the basis of article 7:628 DCC, will have to continue paying the salaries of employees who are unable to work because of the coronavirus crisis. The longer term situation remains uncertain. In this article, our employment experts explain why.
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Working from home
Employees who work from home are entitled to normal salary payments, even if they are less efficient than they would be at their usual place of work. The reason for this reduced efficiency may be, for example, that their family members are home as well, their IT system is not very efficient, or not all tasks can be done away from the workplace or office. If employees work from home unrelated to reasons of the employer having to close the workplace, but because they need to look after their children while schools and nurseries are closed, they are also entitled to continuing to receive their salary based on the same principle.At home with coronavirus-related symptoms
Employees who show symptoms of the virus and cannot go to their workplace, either because they are too sick to work or because they have to self-isolate in accordance with government guidelines, are also entitled to their salary. When employees feel too ill to work and are therefore unfit to perform their work, they are entitled to continued salary payments under the normal statutory regime regarding illness and pay (art. 7:629 Dutch Civil Code). In our opinion, that regime also applies when an employee has light coronavirus-related symptoms. Even though a simple cold, for example, might not normally prevent an employee from going to work, under the current circumstances the employee has to stay home in self-isolation on government and employer orders. In this case, not performing the agreed tasks is also a consequence of illness. Employees with minor coronavirus-related symptoms who are working from home, are entitled to normal salary payments, because they perform work.At home, but not working from home
What about employees who have to stay at home but cannot work from home? Are they also entitled to continued salary payments? NOW Under emergency legislation known as "NOW", employers may be eligible to receive up to 90% of salary costs in subsidies for a three-month period, with the option to renew for another three months. The salary subsidies are intended to enable employers to continue paying full salaries to those employees who cannot work, or who work less, because of the coronavirus preventative measures. For more information about NOW, read this article. Although NOW requires employers to use the salary subsidy to pay salaries, NOW does not interfere in the employment agreement between employer and employee. Whether or not an employer receives salary subsidies is relevant, but not decisive, for an employee's entitlement to receive salary during the coronavirus crisis, when not working. The employee's entitlement should be determined on the basis of the Dutch Work and Care Act and article 7:628 of the Dutch Civil Code. First hours or days: emergency leave under the Work and Care Act Under the Work and Care Act (art. 4:1), in an emergency, employees are entitled to their salary over a short, equitably determined period. We believe the current situation qualifies as an emergency under this legislation. The question is how long is an employee entitled to emergency leave and, consequently, to continued salary payments under this act? Under regular circumstances, this entitlement would exist for several hours or several days, at most. Do the exceptional circumstances of the coronavirus crisis justify the application of emergency leave to the entire period of the crisis? In our opinion, the courts are unlikely to rule that the current crisis extends the emergency leave to a period of more than a few days. Emergency leave is intended to help an employee deal with a sudden emergency, not to enable employees to stay home until the problem that led to the emergency is solved. Emergency leave is often part of a collective labour agreement and may therefore have a wider scope than the statutory rules. Do not forget to review the rules. After the emergency leave: legal framework for continued salary entitlement At the end of the emergency leave period, the question arises as to whether the employer has to continue paying the employee's salary on the basis of art. 7:628 of the Dutch Civil Code. If employees do not perform tasks, they are entitled to continue receiving salary payments if the reason for the non-performance falls within the employer's risk. Normal business risks are, in any event, borne by the employer. But the current coronavirus crisis does not qualify as a normal business risk. Some exceptional business risks and force majeure events are also at the employer's risk and expense. The limited case law available on this point, shows that exceptional circumstances and force majeure outside the employee's private sphere regularly come at the employer's risk and expense. When deciding on an employer's obligation to pay salary in accordance with article 7:628 DCC, the courts will have to take into account all relevant facts and circumstances and come to a reasonable outcome. Such facts and circumstances would be, for example:- the duration and impact of the restrictions set by the government;
- whether or not the employer is entitled to salary subsidies under NOW and to use other governmental measures taken to decrease the effects of the limitations;
- the financial position of the employer;
- the measures taken by the employer to improve its financial position;
- the measures taken by the employer to enable employees to work from home; and
- the impact of not paying salary on the employee's (financial) situation.
- case law on exceptional circumstances and force majeure in light of article 7:628 DCC,
- the government's view that employers are obliged to continue to pay salary during the coronavirus crisis, and
- the fact that employers that are hit by the crisis can apply for a salary subsidy under NOW.