National subsidy for employers and employees

According to the governmental decree, effective as of 16 April, 2020, as the second part of the economic program, the Government decided to introduce a national subsidy with quasi income-compensation nature. This national subsidy shall facilitate the sustainability of the employment relationships – even though the economic crisis –, and therefore, as possible, the assurance of the employees’, as private individuals’ situation. Based thereon, the main purpose of the subsidy is to have the employment relationships temporarily established with part-time nature, thereby having the employment and wage payment obligation of the employers reduced and simultaneously assuring that the employees do not suffer from financial loss.

In such special form of employment, the employer and the employee agree on a reduced working time, equaling to at least fifty-seventy percentage of the previous one, but at the very least four hours and also on the performance of the so-called individual development time. During the individual development time, only the availability obligation shall burden the employee, while the employer shall be obligated to pay wages. For the time lost due thereto, the employee is entitled to receive the national subsidy.

In line with the above, and according to the newly introduced regulations, the parties may facilitate their own economic situation by the use of the national subsidy. In the aspect of the employees, it is undoubtedly advantageous as a part-time employment is performed with unchanged income. Simultaneously with the reduction of the working time, the payment obligation of the reduced wage shall mean the facilitation of the expenses for the employers as well. Therefore, even in the present difficult economic situation, the continuation of the employees’ employment relationships is still possible.

For the sake of completeness, we hereby emphasize that the government decree stipulates numerous preconditions on the use of the subsidy. Therefore, both the employers and the employees shall undertake the fulfilment of certain obligations.

Due to the structure of the decree, however, difficulties are expected to appear regarding the drafting, obtaining and filing of the relevant claim and the further mandatory documents. At the evaluation of the claim, the government office shall examine the existence of the conditions and the undertakings as well. According to the provisions of the decree, nevertheless, in case of rejection, appeal is not allowed and moreover, the subsidy may be reclaimed only one more time.

Having regard to the above, we kindly ask our Clients to act with utmost caution as the condition of the use of the national subsidy is the proper preparation and filing of the relevant documentation – including for instance the claim, the agreement of the parties and the further mandatory attachments –, as in case of a rejection, only limited possibilities are available to receive the subsidy.

Our Firm is pleased to provide legal services regarding the review of the details and conditions of the subsidy and to assist in drafting of the given agreement and claim as well.

For the sake completeness, we also state that the provisions of the Labor Code on the allocated working period has been also amended according to the government decree released simultaneously with the above one. From now on, the employer is entitled to unilaterally order a 24-month long allocated working period or to modify the ongoing one as well, even if it is against the provisions of the collective agreement.

Should you have any questions or enquiries regarding the above, Germus and Partners Attorneys At Law is at your entire disposal.

The information above possesses exclusively informative nature, therefore, it shall not be considered as legal advice of Germus and Partners Attorneys At Law, any attorneys or trainee lawyers thereof.