06 April, 2020
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Covid-19 pandemic puts Global Labor Regulations to test – Rights of Employees and Employers in Bosnia And Herzegovina

The COVID-19 pandemic has put labor law to the situational sensitivity test. How should the burden of emerging circumstances between employers and employees be shouldered considering that the income of both are at serious risk? Sources of labor law, to some extent, already contain answers to the flood of questions that have arisen. The trick is how to apply them adequately to each circumstance so that they protect the most vulnerable and that the burden of the economic effects of the pandemic, if possible, is equitably distributed. Here we analyze the relevant labor legislation and decisions issued by the authorities in Bosnia and Herzegovina on foot of the COVID-19 outbreak.

 

The most pressing aspect concerns the possibility of employers canceling employment contracts due to a lack of work for employees on economic and organizational grounds.

Primary legislation states that employers may terminate an employee’s employment contract owing (a) to technological, economic or organizational changes, the need to perform a particular job ceases or the volume of work is reduced and the employer cannot provide the worker with another job (Republic of Srpska), or (b) if the termination is justified on economic, technical or organizational grounds (Federation of BH).

Common sense suggests that due to the state of emergency and the spread of the COVID-19 virus, economic and organizational changes are likely to occur and the need for a certain number of jobs will cease, many employers may be hasty in availing of this seemingly viable opportunity and employees (at first glance justified) may fear for their jobs.

However, both parties need to be cognizant of the fact that this provision is not carte blanche for employers to claim that economic and organizational changes have occurred. What does it really mean? If an employee has received an employment contract termination decision, or an employer is preparing to serve an employment termination decision that merely cites this provision verbatim without further explanation, the validity of such decisions will be subject to review.

Namely, the dismissal on these grounds must be properly substantiated in the decision. Gecić Law office has already written about dismissals of this sort in Serbia, emphasizing then that anticipated and expected economic loss may not be given as grounds for dismissal. Given that the state of emergency came into force in BH approx. ten days ago, it is hard to see how any employer at this early stage could substantiate worker dismissals on the grounds of losses incurred. Also, this provision of the Federation of BH Labor Act clearly stipulates: “if such dismissal is justified for economic, technical and other reasons”. The pandemic and state of emergency alone do not suggest there is justification for dismissal in every particular case. Any such dismissal must be substantiated and it seems implausible that any employer has compelling arguments for doing so at this early stage or that those arguments would withstand judicial scrutiny.

 

In the event of any subsequent valid dismissals, it should be noted that some employers will be required to adopt a redundancy program and pay severance to some employees

Redundancies

 Obligations concerning redundancy programs, similarly regulated in the Federation and Republic of Srpska, include a procedure whose constructiveness is questionable given that the technical possibilities of trade unions or employee councils to consult in isolation is debatable and it is uncertain how long the emergency state will last and what the needs of the employer will be once it’s lifted.

Employers who employ more than 30 workers are required to adopt the program if, within the next three months / 90 days, they plan on laying off ten permanent employees (under the  Republic of Srpska Labor Act), or at least five employees (in the Federation of BH, without specifying that the employees in question are permanent employees). The contents of the program are strictly regulated and the process involves consulting with trade unions/employee councils and advance submission of the program to workers’ unions. Among other things, the program requires consideration of measures such as reassigning employees to other posts with the same employer; retraining; measures that the employer thinks could help employees find a job with another employer.

 

Severance pay

Not all workers are entitled to severance pay. The question arose among temporary workers as to whether they are also entitled to severance pay. According to the primary legislation, the answer is no. Severance pay in both the Republic of Srpska and the Federation of Bosnia and Herzegovina is available to permanent workers employed by an employer for at least two years and whose employment contracts are being terminated by the employer, but not on grounds such as failure to perform work duties rather due to a lack of work for the employee. Severance pay is determined based on years of service with an employer in accordance with the law and employment by-laws.

 

An alternative to dismissal (if there is a valid possibility of dismissal at all), is paid leave due to reduced workload – or put plainly, the notorious compulsory vacation

The Republic of Srpska Labor Act stipulates that an employer, in consultation with the trade union/ council of workers, may issue an order to an employee to take paid leave in the case of unplanned temporary reduction of the volume of work with the employer, as well as due to the economic, financial or technical-technological reasons. During the period of paid leave, employees are entitled to a remuneration of at least 50% of the average salary earned in the previous three months. The manner of referral of workers, length of service, rights and obligations of employees and other issues regarding the more detailed arrangements of paid leave should be regulated by a collective agreement.

 

After considering the legal possibilities in case of cessation of the need for work of an employee, the question arises as to what to do with those with the opposite problem – in-demand employees – overtime

Republic of Srpska: In the event of an increase in workload and, among other things, an epidemic, employees are required to work longer than full-time at the employer’s request. Overtime may not exceed four hours per day and ten hours per week. Practically, workers would be required to e.g. work two hours longer every workday. But all this with the general maximum in mind regarding that an employee cannot work more than 180 overtime hours during a calendar year.

During overtime work, an employee is entitled to an enhanced rate of pay. The law does not provide for any exception to the rule that overtime has to be paid when performed due to the consequences of an epidemic. While this seems logical and perhaps pointless to emphasize, there is a tendency for both authorities and the public to interpret too broadly the possibilities of curtailing fundamental rights during a state of emergency. Overtime work for an employer is not compulsory labor that is prohibited by human rights instruments. It is not even a type of compulsory labor that is permitted in circumstances such as pandemics and states of emergency. The math is simple if there is a need for overtime work (in the case of private sector), isn’t that because of an increase in the turnover of specific goods or services? In that case, isn’t the profit increased also and who reaps the gains?

Federation of BH: In case of force majeure, employees are required to work, at the order of the employer, for longer than full time. Overtime work may last no longer than eight hours a week. We have already written about the fact that the pandemic may be deemed force majeure, and we now note that in these circumstances an employee is required to work overtime, emphasizing that overtime work is not compulsory labor.

 

Remote work

 The Government of the Federation of Bosnia and Herzegovina, among recommendations to employers published on March 17, recommended that employers, if that is possible due to nature or work or if the work process allows it, instruct employees to work from home.

Remote work may be subject to the provisions of the BH legislation concerning work outside the employer’s premises. Our office has already written about this type of work when it was stated that in a state of emergency employees do not require anything more than a decision by their employer that they commence working remotely.  However, if an employer wishes to further specify the employment relationship with employees who are working remotely under new circumstances, the employer can propose that employees conclude an annex to the employment contract agreement.

 

If the working process is continued the employer’s premises note should be taken of employers’ occupational safety and health obligations

The aforementioned recommendations issued the Government of the Federation of Bosnia and Herzegovina state that employers are required, in accordance with occupational safety regulations, to ensure regular and enhanced hygiene measures in the workplace and auxiliary premises, which, among other things, include cleaning and disinfection, as well as regular ventilation. Inspectorates should be able to clarify what exactly is meant by cleaning and disinfection and how often this should be done since these should be standard practices (state of emergency or no state of emergency).

Employers who employ a larger number of employees should reorganize their working hours if that’s possible considering the working process. Single-shift work should be split into two shifts in order to avoid several workers congregating in one place.

 

Safeguarding the family unit and work responsibilities

One of the Government’s recommendations states: Allow leave from work for employees i.e. for one parent where both parents (of minors up to ten years old) are working. In this case, emphasis should be placed on the word “recommendation” and what this means in practical terms. Can parents take this to mean that they are entitled to do so or that it is left to the employer’s discretion? What if, for example, both parents are medical workers in high demand and their immediate superiors require them to report for work. The only answer to the countless number of similar questions that arises is that it remains for the authorities to regulate the matter in greater detail or to leave it to labor inspectorates to deal with.  When (and if) this happens we will provide our analysis. Right now, it is hard to see how this recommendation can be made binding. Another question that needs to be answered is what if both parents work remotely. Doesn’t that imply the same work obligations?

 

Vacation in isolation

The Government’s recommendations also emphasized that employees should be allowed to take annual leave. Initially, in practice, there were cases of employers offering employees the choice between a vacation on full salary and paid leave with a percentage reduction in pay. Now, however, with a cloud having over the expected length of a state of emergency, the question arises as to whether there is any point in taking vacation days since its duration depends on “accumulated” free days, with a maximum of 20 working days per calendar year (besides the exceptional cases of annual leave extension). It is possible for the vacation period to be completed before the end of the state of emergency. It should also be noted that vacation is an employee’s right, not an obligation. Although people in the region are familiar with the oxymoron “forced vacation”, we have already explained that it is a special term that implies reduced salary.

 

Any open questions will be analyzed after the BH authorities and commercial practice provide the public with answers

Anyhow, whenever the rights of employees and employers are analyzed, it is necessary to bear in mind the existence of a specific chain of causes, which may, in the end, have effects contrary to the desired measure initially applied. Namely, it is possible for private sector employers to arrange work so that employees are protected to the maximum extent and receive wages even though workload and profit are significantly reduced. In the end, however, it can lead to serious disruption to the economy, the liquidation and bankruptcy of companies, rising prices and a drop in purchasing power. It is the employees themselves that will bear the brunt of these consequences despite the initial intention being to safeguard them. So, while choosing a work organization regime in circumstances that spared no one, one should remember the little snake in a game that eventually bites its own tail.

 

For more information, please contact us via covid19@geciclaw.com.