COVID-19 Consequences for you and your business in CEE

Taylor Wessing provides its clients worldwide legal advisory services in connection with the current crisis caused by the COVID-19 pandemic. With our CEE expertise we are able to help our clients overcome these difficult times. In this document we focus on 6 key markets in the CEE region - please follow the links for detailed information on each of them:

What are the general restrictions on you personally and your business?

Free movement restrictions

Austria: As of the beginning of April, curfew measures (restricting travel and public life) must be complied with nationwide. Despite loosening the measures, several provinces still remain under quarantine. Most borders with neighbouring countries are closed. For some crossings there are exceptions for commuter and freight traffic. People entering Austria have to undertake a 14-day self-monitored home quarantine. Under certain conditions, carpooling with people from different households is allowed and the use of public transport is no longer restricted. The temporary suspension of flight operations has been extended for Austrian Airlines until 17 May 2020.

Czech Republic: A state of emergency has been declared (free movement of people is prohibited across the whole country; exceptions for work or other necessary trips). Also, several municipalities were locked down. Entering or leaving the Czech Republic is forbidden for all foreign nationals. Some exceptions apply to foreign nationals with permanent or temporary residence of over 90 days, employees working in close areas to the border or business trips abroad. People entering the Czech Republic have to undertake a 14-day self-monitored home quarantine.

Hungary: People are only allowed to leave their homes for good reasons. These reasons include going to work, pursuing economic activities, exercising and shopping in stores for essential materials. Borders are closed for all passenger transport. Liszt Ferenc International Airport remains open, but only for Hungarian citizens. Within the territory of Hungary currently there is no lockdown.

Poland: Cultural institutions and sporting facilities are closed until further notice; parks, beaches, boulevards, boardwalks and city bikes are closed until 19 April 2020. Until 3 May 2020, the country's borders remain closed to foreigners without a permit to stay. Leaving home is allowed for good reasons only (work, necessary shopping, etc.). Since 16 April 2020 everyone in Poland is required to cover mouth and nose on the street, during pedestrian traffic, in offices, shops, service places, and workplaces. People entering Poland are subject to a compulsory 14-day home quarantine which regards cohabitants as well. The government has developed a programme for the gradual lifting of restrictions, which is divided into 4 stages. From 20 April onwards, recreational travel is allowed and larger groups of people can gather in shops and churches at the same time. The exact start dates of the subsequent stages will be determined according to the current epidemic situation.

Slovakia: Measures similar to a lockdown were only in place during the Easter period but have been discontinued since then. With some exceptions, foreign citizens are not allowed to enter the Slovak Republic. People entering Slovakia undergo laboratory testing towards Covid-19 and, in case of a positive test result, a 14-day home-quarantine is obligatory.

Ukraine: The whole territory of Ukraine is under quarantine. The Chernivtsi region along with some cities in Ukraine are closed for entry and exit (except for local citizens for entry, transit transport, and life support). Additional restrictions working in Kyiv (8 posts in entry/exit of city with the checking of temperature). People are required to stay at home and not travel outside of the country (all flights/buses/trains are cancelled). The government restricts all touristic visits.

Shops and businesses

Austria: Many shops and businesses are closed. It is prohibited to enter the customer area of service and retail companies as well as leisure/sports facilities. Exceptions (e.g. food retailers, pharmacies, etc.) exist. In the course of gradual easing of anti-corona measures, some shops, e.g. with less than 400 square metres and building supplies stores, are allowed to reopen since 14 April 2020. According to a press release, Austria will be trying to reopen the country step by step. At the beginning of May all shops (also certain sports facilities for sports such as golf, horse riding and tennis) are to open again; in the middle of May also restaurants, under certain conditions (limited visitors, distance regulations). Museums and libraries are also scheduled to open in mid-May.

Czech Republic: Retail businesses/business providing services had to close with some exceptions (grocery stores, pharmacies, etc.). As of 9 April 2020, some shops reopened. On 14 April 2020 the government published a plan to slowly reopen shops and service providers within the following weeks. Most of the businesses should reopen as of 8 June 2020.

Hungary: Businesses in the catering industry (except take-away services) are banned from allowing entry. Appliance stores are not allowed to operate after 3 pm. Others (like fashion stores) were forced to shut down.

Poland: Shops (grocery stores, pharmacies and building supplies) are closed; bars and restaurants (except take-way services), fairs, congresses, culture, sport, entertainment, recreation and hotels amongst others, are shut down until further notice. Under the "defrosting the economy" banner, it is initially planned to gradually open DIY stores at weekends as well as hotels and other accommodation businesses, art galleries and museums. This will be followed by shopping centres, hairdressing and beauty salons and brick and mortar restaurants will be allowed to open with some restrictions still in place. Finally, gyms and fitness clubs will be reopened.

Slovakia: Store regulations include an obligation to wear face masks, apply hand disinfection or use gloves, maintain distance of 2m between customers and to limit the number of customers (1 customer per 25 m2 of the sale area). The obligation to maintain the said hygienic measures shall be made visible for public at all shop entrances. As of 30 March 2020, certain businesses were allowed to re-open to the general public.

Ukraine: The hospitality industry (cafés & restaurants (except delivery)), beauty, wellness and spa, shops (except food, pharmacies, veterinary, agriculture & building materials shops) are shut down.

Is your business eligible for state guarantees or change of loan terms?

Austria: The government is granting state guarantees for bridging loans granted to SMEs by their main bank. Also, loans granted to micro-enterprises due between 1 April 2020 and 30 June 2020 are deferred by law for a period of three months from the due date.

Czech Republic: A draft amendment enabling the Czech National Bank to access a wider array of trading options is being discussed in the parliament. A draft law that would postpone payment of loans is being discussed. During the postponement, an interest cap is applicable to consumer debts.

Hungary: The government declared a moratorium on payments on all retail and corporate loans until the end of 2020.

Poland: The facility for banks to change terms and conditions and deadlines of loan agreements with SMEs has been introduced. BGK [the state development bank] may grant sureties and guarantees for the repayment of loans contracted by SMEs for up to 80% of the remaining amount.

Slovakia: Natural persons, self-employed and SMEs may request a deferral of payments of their loan/mortgage payments up to 9 months. Also, a new program of indirect financial aid for SMEs was introduced.

Ukraine: Consumer loans are exempt from penalties for the quarantine period. Also, interest rates for loans cannot be increased during this period.

What are the measures applicable to you as employee or employer?

Specific measures

Austria: Use of vacation time can unilaterally be ordered by the employer. Employees belonging to the COVID-19 risk-group must be released with continued remuneration. Short-time work is possible now.

Czech Republic: Even though the Labour Code has not been amended, the program ‘Antivirus’ supports employers and employees in order to prevent layoffs.

Hungary: The government has just announced it will partially cover the salaries of employees who cannot be employed full-time during the crisis. Even since before that, the employers and the employees have been allowed to agree on reducing working hours or changing work schedules. Employers are empowered to unilaterally impose ‘home office’.

Poland: Labour law regulations have been modified as part of a package of acts called the anti-crisis shield. No separate act has been adopted. Remote work [home-office] is encouraged.

Slovakia: Employees may be left at home with a wage compensation in the amount of 80% of their average earnings. The employer may now order the employee to work from home, if possible.

Ukraine: Flexible working time and remote work are encouraged.

Wages and lay-offs

Austria: Salary may only be decreased with the consent of the employees. However, the monthly salary may not be lower than the minimum salaries prescribed by the applicable collective bargaining agreement. Dismissals are in general allowed; however, the restrictions in case of implementation of short-time work have to be considered.

Czech Republic: If an employer is not able to assign work to employees in the scope of the weekly working hours, the received salary can be decreased (minimum 60% of the employee´s average earnings). Dismissals are not restricted. However, under the Czech Labour Code, employees may be dismissed only provided that a statutory ground is given.

Hungary: Employers are not obliged to pay salaries for downtime due to unavoidable external circumstances. The employer and the employee may also agree on part-time work with reduced salary. Pursuant to the Labour Code in force, employers may dismiss employees for reasons related to their operations, which include the decrease of demand.

Poland: Employers have been authorised to agree with employees on applying less favourable terms and conditions of employment than those under existing employment contracts. No legislative changes have been introduced in the area of dismissal. If employers take advantage of state subsidies for salaries, they cannot dismiss the employees for the duration of such support and for a period corresponding to its duration afterwards.

Slovakia: If an employer does not have work for employees, the employer may leave them at home with wage compensation in the amount of 80% of their average earnings. Employers are not allowed to dismiss employees due to the coronavirus crisis. Employers may dismiss employees only on the grounds stipulated in the Labour Code.

Ukraine: Employers cannot decrease salaries directly due to the Covid-19 pandemic; only in cases generally provided by law (e.g. downtime, change of working conditions). Employers cannot dismiss employees due to Covid-19. It is possible only on the general basis provided by law.

What are the implications for your court proceedings?

Court

Austria: Hearings should be done by remote technologies, if possible. Matters that do not require hearings or the personal presence of representatives otherwise can proceed.

Czech Republic: Under a new draft law, a court can pardon a missed procedural deadline. The application for pardon of the delay must be submitted within 3 to 15 days.

Hungary: After an extraordinary court recess, courts are fully functioning without in-person hearings.

Poland: The procedural and judicial deadlines for court proceedings, among others, are suspended. This does not include the so-called urgent cases. No hearings or public hearings shall be held.

Slovakia: Hearings take place only in urgent cases and without the public. All court-related deadlines (such as for appeals, filing motions or further particulars) are delayed until 30 April.

Ukraine: Judges are advised to explain to parties the possibility of postponing hearings because of the quarantine measures (except for some urgent cases in compliance with the law). Deadlines for submission for some procedural documents are prolonged for the period of quarantine. Hearings should be done via remote technologies, if possible.