1. Emergency Measures
Decrees, orders or guidelines in effect and pertaining to reopening facilities.
Pursuant to the latest resolution by the federal government, dated 27 May 2020, the federal states are responsible for setting the guidelines that shall be applicable in their state. Therefore, the rules differ by region. In general, most facilities can reopen, but hygiene and distance rules apply. Companies are obligated to have a hygiene concept. The direct contact between employees or customers must be avoided wherever possible. Where close contacts take place, special measures must be in place to minimise the risk of infection, e.g. through wearing a mouth and nose cover. If possible, teleworking should be allowed by employers.
Optimal approach to keep track of the latest updates.
The federal government has a website, where you can find the latest resolutions and information on COVID-19, however, the majority of this website is only available in German: https://www.bundesregierung.de/breg-de/themen/coronavirus
On the websites of the federal states, you can often find their local orders on COVID-19 measures in English: https://www.berlin.de/corona/en/
2. State Aid
Government subsidies and special relief resources allocated to support employers, and workers, in their efforts to maintain employment and pull through the crisis.
Employers can apply for short-time work allowance for their employees as a compensation in case of temporary loss of work. The amount of the short-time working allowance is in principle, 67% of the employee’s salary, with extended entitlements in 2020 for lengthy periods of short-time work. This financial aid shall secure continued employment in times of work loss, in order to avoid terminations for operational reasons. Employees may also have compensation claims under the German Protection against Infection Act, e.g. in cases of a quarantine ordered by the authorities that prevent the employee from working. Solo self-employed, freelancers and small companies are entitled to emergency financial aid of up to €9,000 or €15,000 (depending on the number of employees), paid by the respective federal state.
3. Health and Safety Measures
Requirements mandated by law or any official guidance.
Under the German Safety and Health at Work Act, employers are obligated to assess the risks to the safety and health of their employees in the workplace and take the necessary measures based on this assessment. In the framework of pandemic preparedness, employers have to identify and take additional measures where necessary. More information can be found about this topic, e.g. in the National Pandemic Preparedness Plan on the website of the German Robert Koch Institute, a well-recognised German institution.
Measures typically implemented by employers and the associated legal risks, limitations, obligations and issues to consider.
Typical measures include increased possibilities for telework on the one hand and distance rules and improved hygiene at the company premises on the other hand (e.g. recommendations on frequent hand washing, providing disinfectants at the workplace, etc.). It is recommended to keep a distance of 1.5 meters between employees and customers. If and where such distance cannot be maintained, the employer must ensure protection by other means (e.g. face masks, workplace modification, etc.). The employer can order the employees to wear face masks, but individual employees may refuse in case of unreasonable strain, e.g. in case of asthma.
In general, the employer does not have the right to ask employees about any specific health related questions. However, in case of a coronavirus diagnosis, the employer may request information regarding this so that he can fulfil his duty to protect the health interests of the other employees. Precautionary measures, such as checking the employee’s body temperature, currently require the consent of each employee, as such measures constitute a processing of personal data. Also, the works council may have a right of co-determination. Employers normally may send employees home in order to protect the health and safety of other employees in the workplace. However, the employee being sent home is entitled to continued payment of remuneration.
Policies and procedures for telework once the business reopens.
Employees have no legal right to work from home under German law. At the same time, the employer cannot unilaterally order employees to work from home. Therefore, telework requires either an individual agreement between employer and employee or a company agreement with the works council, which has a co-determination right when home office is introduced. Where telework takes place, the requirements of employee protection remain unaffected. In particular, this applies to working time requirements and workplace protection. The statutory maximum working hours as well as the minimum rest periods and breaks must also be observed for telework. Workplace requirements also remain the same (lighting, wall distances, equipment, etc.). The employer must also ensure data protection is maintained in the home office. It is generally possible to delegate these obligations to the employee to some extent, as the employer has no general right to access the employee’s home. However, the employer remains liable and should at least check the health and safety requirements on a spot check basis.
5. Managing COVID-19-Related Employee Issues
Management of quarantine, childcare and medical leave for employees affected by COVID-19.
Regarding quarantine, the applicable rules mainly depend on whether the employee is actually ill during this period. If the employee is ill during quarantine, he is to be treated the same as any employee on regular sick leave and is entitled to continued remuneration for a period of up to six weeks. This continued remuneration is paid by the employer. If an employee is quarantined only as a precautionary measure, but is not actually ill, he is not on sick leave. The employer is still obligated to continue paying the employee, but may request compensation from the authorities under the German Protection against Infection Act. If the employee has the option of telework and is not ill during quarantine, he remains obligated to work.
If the employee cannot arrange necessary childcare by others, despite reasonable efforts by the parents, the employee has the right to refuse to work, though an entitlement to continued remuneration towards the employer is only possible under narrow conditions and then only for a short time, for just a few days. However, under a new provision in the German Protection against Infection Act, which was introduced in light of COVID-19, employees can apply for a state compensation payment in the amount of 67% of their lost net earnings (max €2,016 per month). This claim initially existed for a duration of 6 weeks, but was recently extended for up to 20 weeks.
Employees who fear infection and refuse to work.
The employee can only refuse to work without breaching his contract, if it would be unreasonable for him to work. This requires a considerable, objective danger for the person concerned or at least serious objectively justified suspicions of danger to life or health. For example, the mere coughing of colleagues will probably not suffice.
Disclosure of employees who are infected.
The coronavirus is subject to the official obligation to notify the authorities in accordance with the German Protection against Infection Act. When a doctor suspects a case, he must immediately inform the responsible health authority, giving the personal data of the patient, as it has extensive authority to initiate measures to combat the disease, including in the employer’s company. There is no obligation for the employer to inform authorities of an infection. This will not be necessary in any event as the doctor/lab carrying out the testing will notify authorities.
For data protection reasons, the employer may in principle not disclose the name of infected employees to third parties/the workforce. Instead, this would normally have to be anonymised. The authorities may however approach the employer to identify contact persons, which may then need to be disclosed in order to follow up on infection chains.
If authorities close down worksites because of the coronavirus, the employer must continue to pay its employees. This is because the employer bears the operational risk, whilst employees retain their remuneration entitlement even if they are unable to work. However, the employer may have a claim for reimbursement against the authority according to the German Protection against Infection Act. In addition, employers may have the option of applying to the Federal Employment Agency for short-time work benefits. Short-time work can be ordered for a maximum of one year. As mentioned above, the amount of the short-time working allowance is in principle 67% of the salary with extended entitlements in 2020 for lengthy periods of short-time work. Companies and businesses must apply with their responsible employment agency for short-time work, if necessary.
6. Cost-Reduction Strategies
To what extent can employers implement the following cost-reduction strategies as a result of COVID-19, and what are the primary limitations on each?
Instead of a furlough, the key tool during the crisis in Germany was and is so-called short-time work. Short-time work can be introduced in the event of a temporary reduction of working time (partially or fully) based on a collective or individual agreement. If short-time work is validly introduced, a short-time work allowance (KUG) will be paid by the labour agency for up to 12 months. The allowance is usually 60% or 67% (with children) of the net wage difference (capped at social security income ceiling). In 2020, higher KUG amounts may be possible depending on the duration of short-time work. Short-time work requires a significant loss of working hours, which results in loss of remuneration. It needs to be based on economic reasons or an unavoidable event, which results in a temporary loss of working time of at least 10% of the employees of the business in the calendar month; further, employees need to be affected by a loss of remuneration of more than 10% of their gross remuneration. KUG is only possible if there is a legal basis, e.g. a collective agreement or provisions in an employment contract or a newly concluded individual agreement. The labour agency has to be notified on the basis of standard forms, which have to be submitted at the latest by end of the month for which KUG shall be first claimed.
The employer may agree on salary reductions with employees. These however cannot be enforced unilaterally. During the current crisis, salary reductions are the preferred method of choice, especially with regard to high earning employees, as short-time work generally does not make sense in light of applicable caps for KUG benefits.
A redundancy due to the current situation (compulsory redundancy) requires a reason and has to be socially justified. The crisis alone is not automatically a justification for a permanent elimination of roles, unless the employer can prove that the work will fall away for the foreseeable future, e.g. at least for the next 9 to 12 months. Temporary work reduction will not justify redundancies, but will only merit short-time work arrangements. If short-time work would be sufficient to bridge a temporary reduction of workload, a termination would be disproportionate and therefore invalid. This only applies to employees who have been employed for more than six months in a business unit with usually more than ten employees.
If the employer can no longer maintain the business and therefore can no longer employ the healthy employees who are willing to work, its obligation to pay remuneration remains. It is in default of acceptance, even if it cannot employ the workforce for technical reasons through no fault of its own. The employer bears the “business risk”, i.e. the risk of not being able to operate his business. Employees therefore receive their normal remuneration, including variable remuneration components such as commissions, even during the unexpected compulsory break. The aforementioned compensations in accordance with the German Protection against Infection Act, only arise in the event of an officially ordered closure of the facility due to risk of infection. In principle however, if an employer needs to close down a facility, it may wish to consider whether short-time work may be possible.
7. Best Practices
Tips, recommendations and common pitfalls.
If there is an agreement on the provision of work in the form of teleworking, which is to apply only for the period of impairment caused by COVID-19, the employer should reserve the right to withdraw the agreement. With regard to health and safety in case of teleworking, the employer should inform the employee comprehensively on occupational safety and should ask the employee to confirm that their workplace at home complies with legal requirements. Compliance with occupational safety should be defined as a condition for teleworking. It should also be agreed that the employer is granted a right of access for possible inspection of the occupational safety, which, unless agreed upon, does not exist due to the fundamental protection of the home under the German Constitution.