COVID-19 INFO eng.version

COVID - 19 info english version (26.3.2020)

Dear business partners, 
we monitor the COVID-19 situation very carefully for you. We do not want to overwhelm you with an abundance of information, which is often subsequently modified, however, below follows a summary of information on compensation under the Crisis Act and an overview concerning employees. 
DAMAGES UNDER THE CRISIS ACT
On the basis of the Crisis Act, damage incurred in connection with the crisis measure may be compensated. It is therefore not possible to pay for damage or lost profits that have occurred as a result of the epidemic itself. The damage also includes entrepreneur’s lost profits. Thus, the real damage will be, above all, those costs that were incurred in connection with crisis measures and which would not otherwise have been incurred. The lost profits can be understood, in particular, as situations where, as a result of a crisis measure, it was not possible to deliver supplies and services which could normally be fulfilled and the profit of such supplies could be calculated.  
In order to be able to claim the damage caused by the current limitations, the damage must be primarily causally linked to the current crisis measures and must be brought before the competent crisis management authority no later than 6 months after you become aware of it. In order to claim damages successfully, the reason for its occurrence and its amount will have to be proven. In this context, we recommend that you have all relevant documentation available that can be reasonably justified and that may prove the amount.
In this context, particularly the following documentation could prove the damage and/or lost profits:
  • documentation of the costs of the disposal of goods which had to be disposed of as a result of the crisis measures because they could not be sold;
  • documentation of the costs of maintaining the quality of goods and materials at the time of operation restrictions;
  • documentation on contractual penalties that had to be paid as a result of the impossibility to meet obligations due to crisis measures;
  • documentation of wage costs incurred as a result of crisis measures;
  • documentation of contracts that could not be carried out or had to be terminated prematurely as a result of crisis measures;
  • documentation of the sales that are not realised and would otherwise be realised – for example, by comparing with a comparable reporting period;
  • relevant email or other communications.
The government’s crisis measures on restrictions on freedom of movement and retail sales entered into force on 16 March 2020 at 12:00 am and ceased on 24 March 2020 at 6:00 am. According to the Crisis Act, it is therefore possible to claim damages incurred during this period. The Government’s crisis measures were replaced by emergency measures of the Ministry of Health effective from 24 March 2020, 6:00 am, by which the Government, in our opinion, primarily seeks to relieve the Czech Republic of the liability for the damage arising under the Crisis Act and to transfer this responsibility to the Ministry of Health.
In view of the above, thorough evidence of the damage incurred can be recommended, as the current, constantly evolving legislation on crisis situations may raise even more questions in the future, the answer of which will be necessary to successfully claim damages.
 

EMPLOYEE SITUATION OVERVIEW

SITUATION
Wage / Compensation
Compensation by employers from the Czech Republic
Employee sickness
60% of average earnings for the first 14 days
NO
Employee in quarantine
60% of average reduced earnings
Now in coronavirus epidemic YES – full pay compensation
Employee in quarantine – closed community
60% of average reduced earnings
Now in coronavirus epidemic YES – full pay compensation
Employee works from home (home office)
100% wage
NO
Employee cares for a child under 13 years (nursing)
The nursing is paid by the Czech government
YES
The employee does not work due to the closure of the establishment at the employer’s decision
100% of the average earnings
Not relevant
Employee does not work due to closure of the establishment by decision of the CR Government
100% of average earnings
YES, amounting to 80% of paid wage compensation
Employees do not work due to quarantine or childcare for a significant proportion of employees (30%)
100% of average earnings
YES, equal to 80% of wage compensation paid
Employee does not work due to the closure of an establishment at the employer’s decision because of a temporary restriction on the sale of his products or a restriction on the demand for services provided
If the employer has issued an internal regulation within the meaning of Section  § 209 of the Labor Code, wage compensation may amount to at least 60% of the average earnings
YES, equal to 50% of wage compensation paid
Employee does not work due to work-related obstacles due to downtime (due to a temporary defect caused by a failure of machinery not caused by the supply of raw materials or power, faulty work documentation or other operational reasons)
80% of the average earnings
YES, 50% paid wage compensation

COVID - 19 info english version (20.3.2020)

SUPPORT OF EMPLOYMENT

Czech government adopted last night (19 March 2020) program on the support of employment, which aims to reduce the negative impacts of the coronavirus epidemics on employees and employers.
Employers shall be entitled to a financial contribution for a partial or full payment of wages, in case their business activity has been limited due to the coronavirus epidemics.
A.    Obstacle on the side of the employee – quarantine
In case an employee is quarantined due to the coronavirus epidemics, it is considered as an obstacle on the side of the employee. In such case, the employee is entitled to remuneration in the amount of 60 % of his average earnings.
In these cases, the employers shall be granted a contribution in the full amount of paid remuneration to its employees.
B.    Obstacle on the side of the employer – shut down of its premises due to a government directive
If the employer was forced to close its premises due to a government directive, and is not able to provide work for its employees, it is considered as an obstacle on the side of the employer. In such case the employee is entitled to remuneration in the amount of 100 % of his average earnings.
As decided by the government, newly the employers shall be granted a contribution in the amount of 80 % of paid remuneration to its employees.
In both cases the contribution shall be granted by the Czech Employment Office („Úřad práce“), while the amount of contribution and the time period of its granting will always be dependable on the specific obstacle in work. Considering individual employees, it will be necessary to distinguish between the obstacles on work on the side of the employer and the employee. In every case, the employers will have to prove that the obstacle was indeed caused by the coronavirus epidemics.
For more information don’t hesitate to contact us. We monitor COVID-19 situation mostly in the Czech version, but we are prepared to inform you immediately you let us know your interest.
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