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“In twenty years of working for successful clients, leaders in the Czech and international financial and industrial sectors, I have learned a great deal about investment strategy and development. I would now like to use this unique experience and direct my skills in more independent work”, says Mr. Němec about his decision.

“While confident of Jiří’s great success in his new endeavours, we are further pleased that he will remain closely involved with the firm. We have agreed that, in addition to his new projects, Jiří will continue to provide strategic support to BBH’s existing clients, as optimal. We recognize and appreciate that his know-how is irreplaceable,” notes BBH’s Managing Partner Petr Mlejnek.

The Amendment creates a legal framework for provision of newly-created institute of temporary protection to entrepreneurs that have their registered offices in the Slovak Republic. Entrepreneurs will be able to apply for the temporary protection to the competent court, which will publish this information in the Commercial Journal without delay. According to the Amendment, provision of the temporary protection will be able as from 12.05.2020.

The purpose of the abovementioned temporary protection to entrepreneurs is to maintain business activities of the concerned entrepreneur and at the same time, to provide at least partial protection to its creditors. The consequences of the temporary protection will be, inter alia, as follows:

• protection against creditors' petitions in bankruptcy against the property of an entrepreneur under the temporary protection and suspension of the bankruptcy proceedings initiated based on creditors’ petitions,
• suspension of the obligation of debtors to file petitions in bankruptcy against their property,
• suspension of certain enforcement (execution) proceedings against entrepreneur under temporary protection,
• provision of temporary protection to entrepreneurs against exercise of a pledge;
• prohibition of offsetting certain claims against related parties,
• prohibition of termination of a contract or withdrawal from a contract with an entrepreneur under temporary protection and prohibition of refusal to perform under such contract due to delay in performance of the protected entrepreneur between the period of 12.03.2020 and 12.05.2020,
• interruption of the running time periods for claiming rights against entrepreneurs under temporary protection, including time periods for contesting of legal acts,
• obligation of the entrepreneur under temporary protection to make an effort to ensure that its creditors will be satisfied as much as possible and to put interests of the creditors over its own; entrepreneur shall not, inter alia, distribute profits or other own resources and refrain from disposing of material assets pertaining to its enterprise;
• relaxation of rules for financing by related parties (related loan receivables against entrepreneurs under temporary protection shall not be considered as subordinated within a potential bankruptcy).

The temporary protection expires ex lege on 01.10.2020. However, this time period may be prolonged by the Government of the Slovak Republic, no longer than until 31.12.2020. The temporary protection shall also expire if the entrepreneur under temporary protection applies for its termination or if the court decides to terminate it on its own initiative or based on a qualified request of a third party.

Taking into account the severity of consequences of providing temporary protection and further specifics of the Amendment, we recommend our clients the following:

• to carefully consider all consequences of possible application for temporary protection (especially considering the fact that an already filed application cannot be withdrawn);
• in case of interest in temporary protection, to file the respective application as soon as possible, considering capacity options of the competent courts;
• to review continuously in Commercial Journal whether the temporary protection was provided to business partners and subsequently follow the rules arising from the protection;
• to consider carrying out actions in relation to business partners/debtors, which may not be possible to carry out after the provision of temporary protection to them (e.g. unilateral termination of contracts).

Besides introduction of the institute of temporary protection to entrepreneurs, the Amendment, with an immediate effect:

i. extends the prohibition of exercise of pledge and prohibition of sale of assets at voluntary auctions, in executions and bankruptcies to 31.05.2020;

ii. introduces a general prohibition to landlords of real estate to unilaterally terminate rental contracts for the reason of tenant’s payment default occurred between 01.04.2020 and 30.06.2020 (if the payment default is caused by consequences arising from the COVID-19 situation);

iii. provides a right to natural persons in execution (enforcement) proceedings to request the court executor to postpone the execution if statutory conditions are met.

The abovementioned is just a brief overview of the many measures introduced by the Amendment. Therefore, if you are interested in a complex comprehensive information, please do not hesitate to contact us at any time.

BBH advokátska kancelária, s.r.o.

In Bratislava, on 23.04.2020

This memorandum may not be relied upon or used by any party without the prior written consent of BBH advokátska kancelária, s.r.o., regardless of whether the use is of private nature, or for civil, administrative, criminal or other court purposes.

The Amendment introduces the right of physical persons-entrepreneurs and small and medium sized enterprises during the COVID-19 pandemic to request from a bank or branch of a foreign bank (or other lenders providing loans within the scope of their business) a postponement of repayment of loan instalments for up to nine months, while the lenders are obliged to grant such requests under conditions set out by law.

In this respect, the Amendment provides for a detailed mechanism for postponement of loan repayment, including:

• specification of borrowers who may request the postponement of loan repayment,

• conditions under which the lender is not obliged to grant such postponement,

• particulars of the application for postponement of loan repayment and the manner of its submission,

• time periods within which the submitted applications have to be approved or rejected by the lenders,

• introduction of information obligations of the lenders (i.e. banks, branches of foreign banks, other lenders), which must be fulfilled as soon as the Amendment enters into force, including the obligation to publish certain information and documents determined by law on its website and in its operational premises.

The postponement of the repayment of the loan in accordance with the Amendment does not deteriorate the credit quality of the borrowers and as its result the total amount of the outstanding loan principal under the concerned loan agreements cannot be increased. The lender shall distribute the unpaid interest for the period of the loan repayment into the remaining loan instalments payable after the expiry of the repayment postponement, unless otherwise agreed with the borrower.

The Amendment introduces similar rules for possible postponements of loan repayments also in relation to consumers.

The aforementioned is only a brief overview of some of the measures introduced by the Amendment. If you are interested in a complex comprehensive information, please do not hesitate to contact us at any time.

BBH advokátska kancelária, s.r.o.

In Bratislava, on April 8th 2020

This memorandum may not be relied upon or used by any party without the prior written consent of BBH advokátska kancelária, s.r.o., regardless of whether the use is of private nature, or for civil, administrative, criminal or other court purposes.

The Act introduces a number of extraordinary measures in the financial area, which aim to rapidly support the financial condition, liquidity and cashflow of businesses and prevent the imminent collapse of the business environment.

Most of the measures resulting from this Act will apply during the pandemic period, i.e. from March 12th 2020 (when the Government of the Slovak Republic declared an emergency situation) until the end of the month in which the Government of the Slovak Republic recalls the emergency situation. However, if the economic, social or health situation requires so, the Government of the Slovak Republic may decide, that the measures under this Act shall continue to be applied after the pandemic period.

Hereby, we would like to briefly summarize the most important changes introduced into the Slovak legal system with immediate effect by the new legislation:

Financial aid to support the maintenance of operations in small and medium-sized enterprises

The law provides for a financial aid scheme aimed at maintaining the employment and operation in small and medium-sized enterprises during the pandemic. Financial aid shall be provided in form of a loan guarantee and/or the payment of loan interests. The provider of such financial aid shall be the Export-import bank of Slovak Republic and the Slovak Guarantee and Development Bank (hereinafter only as the “Bank“).

The provision of a loan guarantee is a form of financial assistance and represents an obligation of the Ministry of Finance of the Slovak Republic to fulfil the obligation of the small or medium-sized enterprise towards the Bank, arising from the loan agreement concluded between the Bank and small or medium-sized enterprise.

The second form of financial assistance is the payment of interest on the loan provided by the Bank from the resources of the state budget (interest bonus), under the conditions defined by the Act.

The beneficiaries of the above forms of financial assistance will be small and medium-sized enterprises meeting the definition of the relevant regulation of the European Commission and other requirements under the Act and related legislation.

The specifics regarding the process of application and approval of the financial aid and provision of loans supported by it are not yet known. However, as there may be high demand for the aid in question given the current situation among small and medium-sized businesses, we recommend that clients, if interested, draw up and submit an application as soon as possible after the official launch of the program.

Measures in the area of taxes, duties, accounting, administrative fees etc.

In addition to the abovementioned, the Act introduces a number of other measures in connection with the pandemic and its consequences for the economy of the Slovak Republic, especially in the areas of taxes, duties, accounting, but also financial market supervision and budgetary rules of public administration.

These include the following measures:

• simplification of the institute of waiver of missing deadlines in tax proceedings;
• suspension of tax controls;
• postponing of due date of tax arrears and non-updating of published lists of tax debtors;
• interruption of running of time periods for expiration of the right to levy tax, recover tax arrears and statute of limitations for the right to recover tax arrears;
• deferral of tax enforcement (execution) proceedings;
• postponing of the deadlines for filing the income tax return and tax return on tax on motor vehicles;
• postponing of the deadlines for compliance with the obligations arising from the Accounting Act;
• waiver of certain administrative charges;
• introduction of certain extraordinary powers of the National bank of Slovak Republic.

The abovementioned is just a brief overview of the many measures introduced by the Law and cannot replace a comprehensive legal assessment of a particular case. Therefore, if you need help with a particular situation, to which the Law applies, please do not hesitate to contact us at any time.

BBH advokátska kancelária, s.r.o.

In Bratislava, on April 3rd 2020

This memorandum may not be relied upon or used by any party without the prior written consent of BBH advokátska kancelária, s.r.o., regardless of whether the use is of private nature, or for civil, administrative, criminal or other court purposes.

The measures in the area of labour law are primarily concerned with the organization of work, the allocation of working time, taking of holiday leave and obstacles to work on side of employee and employer. The mentioned amendments of the Labour Code shall apply only in the time of an emergency situation or state of emergency and within two months after these have been called off (hereinafter only as „crisis situation“).

We would like to briefly summarize the adopted changes affecting the Labour Code below.

1. Performance of work from home (Home office)

Under the legislation applicable outside the crisis situation the employer was not entitled to order an employee to work from home and similarly the employee did not have the right to demand to perform his/her work obligations via means of work from home even in the event of a crisis situation. The employer and employee had to agree on work from home.

Amendment to the Labour Code introduces the possibility for the employer, during the effectiveness of a measure for prevention of occurence and spread of infectious diseases or a measure during endangerment of public health to order an employee to work from home, provided the agreed type of work permits it. The employer may therefore order an employee to work from home in order to prevent the spread of an infectious disease even if the employee refuses it.

At the same time, an employee has been granted the right to perform work from his/her home, if the agreed type of work permits it and there are no serious operational reasons, for which this employee cannot work from home (e.g. requirement of a part of the employees to be present at place of work in order to secure basic operation).

2. Allocation of working time

The Amendment to the Labour Code shortens the time limit for announcement of working time allocation to 2 days in advance, with validity for at least a week, while the employer and the employee may also agree on a shorter notification period (for reasons of legal certainty we recommend to conclude such agreement in written form).

Pursuant to the legislation applicable outside the crisis situation, the employer was obliged to notify the employee on the schedule of working time allocation at least 7 days in advance with validity for at least a week. Employers can thus react flexibly to changes caused by the crisis situation and thus adapt their operation to the new situation.

3. Holiday leave

Pursuant to the legislation applicable outside the crisis situation, the employer had to notify the employee on taking of holiday leave ordered by the employer at least 14 days in advance. Shortening of this period could have been reduced only exceptionally, with the consent of the employee.

On the basis of the Amendment to the Labour Code, the employer must notify the employee on ordered holiday leave at least 7 days in advance. In case of unused holiday days from previous year, the employer is obliged to notify the employee on ordered holiday leave at least 2 days in advance. This deadline can be shortened with the consent of an employee. The abovementioned does not apply to holiday leave, which has not been taken for reasons of maternity or paternal leave, temporary work incapability or the exercise of public office, since taking of such holiday leave is foreseen directly by the Labour Code (after the obstacle has ceased).

4. Protection of an employee against termination of employment

The Amendment to the Labour Code explicitly stipulates, that not only the quarantine and the nursing of family members or caring for a child under 10 years of age, but also an ordered isolation has to be regarded as important personal obstacle on the side of an employee, where the employer is obliged to excuse the absence of an employee from a place of work. Employee is not entitled to wage reimbursement during this time, unless special regulation stipulates otherwise (e.g. Social Insurance Act).

According to the Amendment to the Labour Code, during quarantine, isolation or nursing a family member an employee is considered as temporarily incapable of work for the purposes of termination of employment via means of notice of termination. Such employee is therefore in the protective period and is subject to the statutory provision on prohibition of termination of employment. At the same time, the employer is obliged to assign the employee to the original work and workplace and if this is not possible, to another work corresponding to the employment contract, after the isolation, quarantine or nursing a family member period has ended.

5. Obstacles on the part of the employer – cessation or restriction of activity

The Amendment to the Labour Code explicitly specifies, that if the state prohibits or restricts the operation of some employers due to a decision of a public authority or a crisis situation, it is considered an obstacle on part of the employer. In case of such obstacle, an employee is entitled to a wage compensation in the amount of 80 % of the average earnings of the employee, but at least on the amount equal to the minimum wage. However, this change does not affect the existing agreements with the representatives of the employees, which allow for lower wage compensations (at least 60 %).

The legislator has explicitly stipulated, that the abovementioned does not apply to employees of subjects of economic mobilisation, on which an obligation to work has been imposed. An entrepreneur may as well fall under the scope of the subject of economic mobilisation under specific circumstances, if it has been designed as a subject of economic mobilisation via means of an order of the competent authority.

The summary above provides a basic overview of the changes in labour law adopted in the context of the coronavirus pandemic crisis. The Amendment to the Labour Code also includes amendments to other laws, such as Social Insurance Act, Employment Services Act, Occupational Safety and Health Act and Social Services Act.

We are available in case of any questions related to possible impacts of the aforementioned adopted changes on labour relations in your company.

BBH advokátska kancelária, s.r.o.

In Bratislava, on April 3rd 2020

This memorandum may not be relied upon or used by any party without the prior written consent of BBH advokátska kancelária, s.r.o., regardless of whether the use is of private nature, or for civil, administrative, criminal or other court purposes.

BBH has upheld its top Band 1 ranking in the category of Dispute Resolution. In addition BBH succeeded also in all of our other key practice areas: Restructuring/Insolvency (Band 2), Banking & Finance (Band 3), Capital Markets (Band 3) and Corporate and M&A (Band 3).

BBH Partner František Honsa achieved an unprecedented success in individual rankings whereby he not only retained his Eminent Practitioner ranking in Dispute Resolution, but in addition to that he was named Eminent and Most in the category of Most in Demand Arbitrator in the Czech Republic.

Apart from that other BBH lawyers have marked individual success being recognised as prime advisors in various categories, namely Vladimír Uhde who succeeded in Dispute Resolution (Band 2) and Arbitration Counsel (Band 4), Robert Klenka who succeeded in Insolvency a Restructuring (Band 2) and Dispute Resolution (Band 4), Petr Přecechtěl ranked in Corporate and M&A (Band 3) and Tomáš Sedláček ranked in Banking & Finance (Band 3) and Capital Markets (Band 3).

These unique firm and individual rankings are underlined by the fact that BBH has been shortlisted among the 6 best law firms in the Czech Republic. The final awards will take place this April.

Please see the following link for more information:

https://chambers.com/law-firm/bbh-advokatni-kancelar-sro-europe-7:1427

Please see the following link for publication:

https://indd.adobe.com/view/c2cb9aa1-5e55-435b-b563-aa3a27efb8e0

Temporary limitation of running of time periods and return of time periods

Pursuant to the Covid-19 Act, from March 27th to April 30th 2020, there is no running of limitation periods (In Slovak: premlčacie lehoty) and preclusion periods (In Slovak: prekluzívne lehoty) in private-law relationships – i.e legal relationships arising pursuant to private law regulations, in particular the Civil Code and the Commercial Code.

As a result of the aforementioned, all limitation and preclusion periods in legal relationships governed by Slovak law shall expire 34 days later (if the period set by the Covid-19 Act will not be extended repeatedly), which will have to be taken into account for the next several years when calculating the limitation and preclusion periods.

At the same time, under the Covid-19 Act, the limitation and preclusion periods which have expired between March 12th 2020 (after the declaration of the emergency situation for the territory of the Slovak Republic) and March 27th 2020 shall not expire earlier than 30 days after the entry of Covid-19 Act into force (i.e. April 27th 2020).

The legislator thus de facto renews the already expired legal periods, which may in certain cases have a significant impact on the legal relations of concerned persons. Despite likely a good intention of the legislator, this legislation causes undoubtedly an infringement of the legal certainty of a certain group of concerned persons with consequences which are difficult to estimate.

Temporary limitation of procedural time periods

Under the Covid-19 Act, from March 27th 2020 until April 30th 2020 the procedural periods set by the law or determined by the court for carrying out of a procedural act in proceedings before a court by parties of a proceedings do not run (a special regime applies for criminal proceedings).

In the event that a case cannot be postponed for reasons of threat to life, health, safety, liberty or substantial damage to a party of the proceedings, the court may determine that such limitation of the running of a period shall not apply and at the same time set a new reasonable time limit. An appeal against such resolution of the court shall not be possible.

Among other things, the above limitation shall apply also with respect to appeal periods in court proceedings, which will cause delays in entering of court decisions into effect. It is also not yet clear, how shall the new legislation apply to enforcement (execution) and bankruptcy proceedings, where it will be necessary to observe, how will the decision-making practice of the courts or eventually the Ministry of Justice of the Slovak Republic deal with this issue when interpreting the Covid-19 Act.

Conduct of court hearings in times of emergency situation and state of emergency

The Covid-19 Act sets out, that in times of emergency situation or state of emergency shall the courts conduct all forms of court hearings only in the necessary extent (especially in criminal cases and in cases of custody and care for minors).

It will also be possible, during emergency situation or state of emergency, to exclude the public from court hearings for a reason of protection of health. The court will be obliged to execute and make publicly available a sound recording of such hearing.

Temporary prohibition of the exercise of pledge and refraining from conducting of an auction

Pursuant to the Covid-19 Act, in the period up to April 30th 2020 a right of pledge cannot be exercised and auctioneer, court enforcer and trustee are up to April 30th 2020 obliged to refrain from conducting of an auction, organizing of a bidding proceedings or other competitive process leading to sale of property.

A consequence for the breach of these provisions is that acts leading to the exercise of a pledge right in the relevant period will be ineffective and auctions carried out in the relevant period will be invalid. From the point of view of creditors, it will therefore be necessary to proceed with enforcing their claims in this period in such manner that the validity of their actions in this respect cannot be contested by the debtor and/or third parties in the future.

It is also noteworthy that the Covid-19 Act did not prohibit other methods of sale of assets in bankruptcy proceedings declared against the property of the debtor, therefore such sale is still, according to our opinion, permissible.

Extension of the deadline for filing of petition in bankruptcy by debtor

Pursuant to the Covid-19 Act, the period in which a debtor is obliged to file a petition in bankruptcy over its property is extended from 30 to 60 days. This adjustment is applicable to over-indebtedness of a debtor that occurred between March 12th 2020 and April 30th 2020.

Enabling of per rollam decision-making for legal persons of private law

Collective bodies of legal persons established under regulations of civil law or commercial law (companies, cooperative societies, civil associations, foundations, etc.) may, under Covid-19 Act, in times of emergency situation or state of emergency make their decision per rollam, even if such possibility is not stipulated in their internal regulations, statutes or articles of association.

The provisions on voting at a general meeting of a public joint-stock company shall apply mutatis mutandis on such decisions of company bodies. Failure to comply with the legal rules during voting or failure to fulfil the requirements of subsequent corporate documentation may still cause invalidity of the decisions taken by company bodies.

Exemption from the registration obligation in the Register of the partners of the public sector in public procurement

The Covid-19 Act provided for an exemption from the obligation of registration in the Register of the partners of the public sector in public procurement during the emergency situation or state of emergency for procurement of goods (such as protective face masks, respirators, test kits, etc.) and services (or construction works), if these serve the purpose of ensuring the protection of life and health.

Provision of localization and other data to the Public Health Authority of the Slovak Republic

In times of emergency situation or state of emergency in the healthcare sector, which are caused by the occurrence of a pandemic or the spread of a dangerous contagious human disease, the Public Health Authority of the Slovak Republic will be able to obtain location data and so‑called operational data generated by electronic communications from the mobile operators for the purposes of protection of life and health of the population.

The mobile operators will provide these data to the Public Health Authority of the Slovak Republic only on the basis of justified written requests. The Public Health Authority of Slovak Republic will be able to collect, process and store these data only for the duration of the emergency situation or state of emergency in the healthcare sector, but not longer than up to December 31st 2020. The purpose for processing of these data is the early identification of potential carriers of the disease and prevention of its further spreading.

Part of the abovementioned measures is designed to be applied only in case of emergency situation or state of emergency, in accordance with the applicable legislation (as is currently the case for coronavirus and Covid-19 disease).

The other measures are of a temporary nature (to be applied until April 30th 2020), and their petitioner, the Ministry of Justice of the Slovak Republic, does not exclude their further prolongation. Therefore, it will be crucial to monitor the activities of the Ministry and the entire legislative process in order to be prepared for any upcoming changes in time.

We are available to answer any questions.

BBH advokátska kancelária, s.r.o.

This memorandum may not be relied upon or used by any party without the prior written consent of BBH, advokátní kancelář, s.r.o., regardless of whether the use is of private nature, or for civil, administrative, criminal or other court purposes.

Relevant provisions of loan agreements

Due to adverse consequences of the situation caused by the coronavirus on the economic performance of the borrowers, several types of provisions typically found in loan agreements may be breached by the borrowers:

Material adverse change on the part of the borrower

Negative impacts of the coronavirus and related governmental measures in the business activity and economic performance can cause the so-called material adverse change on the part of the borrower. In relation to the coronavirus, the definition of a material adverse change consisting of the change (i) in income, assets, business activities, operation or financial (or other) situation of the borrower and/or (ii) in the ability to fulfil its obligations under the loan agreement of other financial documents may be fulfilled.

Breach of financial covenants by the borrower

The worsening of the economic situation of the borrower may probably also lead to the inability of the borrower to comply with the so-called financial covenants, the purpose of which is to measure the economic performance or condition of the borrower at a specified date, typically quarterly. In particular, negative impacts on income and hence on EBITDA indicator may be expected.

Other provisions of loan agreements

Due to the negative impact of the coronavirus, other provisions of loan agreements may be breached, in particular due to (i) default with payment obligations (i.e. non-payment of the loan, its instalment, interest or agreed upon charges), (ii) breach of obligations towards other persons (Cross default) (e.g. breach of the payment obligations of the borrower towards other lenders), (iii) bankruptcy/crisis occurring at the side of the borrower, (iv) bankruptcy, restructuring or enforcement proceeding being initiated against the borrower, or (v) the borrower being in breach of its representations and guarantees.

Consequences of events of default

Each of the abovementioned events usually causes or may cause (after expiration of a remedy period) an event of default which generally entitles the lender mainly to stop further provision of financing, accelerate the loan, claim contractual penalties, take steps towards exercise of security, etc. Specific terms and conditions are always stipulated in the individual loan agreements.

In case an event of default occurs or threatens to occur, the borrower is obliged to notify the lender on such event without delay. It is generally recommended to fulfil such information obligation without delay and to enter into negotiations with the lender in order to resolve the event of default in such manner, so that the consequences of a breach of an agreement are as minimal for the borrower as possible.

Possibilities of the borrower to defend itself

Loan agreements usually transfer all risks that may be relevant for the performance of the loan on the borrower. Liberation from liability for damages due to a force majeure event (Section 374 of the Slovak Commercial Code) is therefore not directly applicable in relation to the exercise of the rights of the lender arising from breach of a loan agreement.

It is also theoretically possible to consider, in a particular case, whether the legal regulation on liberation from liability for damages in the event of a force majeure (Section 374 of the Slovak Commercial Code) may be analogically applied to the given situation. In such case it is possible to argue that if the borrower breached the loan agreement as a result of the emergency situation connected to coronavirus (which has the nature of force majeure) and for this reason the loan has been accelerated by the lender, the borrower is not able to repay the loan early again as a result of the emergency situation connected to the coronavirus (force majeure event).

Thus, if the borrower repays the loan later (after this obstacle has disappeared and the economic situation has improved), it can be argued that it could not have been done earlier due to a force majeure event, and thus the borrower relieves itself of liability at least in the extent of the default interest accrued on the unpaid loan over that period. The interest on late payment generally constitutes appurtenances to a monetary claim and not a separate claim for damages. However, it is also the case that the interest on late payment usually serves to compensate for any damages incurred as a result of the delay in the performance of the monetary debt. It can therefore be argued by the borrower that the legal regulation regarding force majeure events may be applied to the interest on late payment per analogiam.

In general, the conduct of a lender during the duration of the emergency situation connected to the coronavirus will also need to be assessed in terms of its compliance with good morals and fair business conduct rules. These are situations, where actions of the lender, despite being formally in line with the loan agreement, would appear to be manifestly inappropriate, illogical or leading to the economic destruction of the borrower, who would otherwise, after the removal of the temporary obstacle, be able to fully restore its economic activity and properly repay its debts.

Such conduct of the lender could be considered in extreme cases as contrary to good morals and/or principles of fair business conduct. The terms of good morals and fair business conduct are not defined by law, and therefore offer relatively wide application possibilities as well as wide range for judicial discretion. Exercise of a right that is contrary to the fair business conduct principle does not enjoy legal protection (Section 265 of the Slovak Commercial Code) and a legal act that is by its content or purpose contrary to good morals is absolutely invalid (Section 39 of the Slovak Civil Code).

Within their loan agreements, the contracting parties may stipulate most issues in a manner different from the law or the market standard. Therefore, it is always necessary to assess the relevant loan agreement directly and not to follow only the general rules resulting from the applicable legislation.

We are available to answer any questions.

BBH advokátska kancelária, s.r.o.

This memorandum may not be relied upon or used by any party without the prior written consent of BBH, advokátní kancelář, s.r.o., regardless of whether the use is of private nature, or for civil, administrative, criminal or other court purposes.

Quarantine

A mandatory 14-day quarantine for employees, who returned from abroad starting from March 13th 2020, 7:00 a.m. (before March 13th 2020 there was a quarantine for employees, who returned from People's Republic of China, the Republic of Korea, the Islamic Republic of Iran and the Italian Republic on or after March 10^th 2020). The procedure is similar to normal sick leave. The documentation in connection with demonstration of the inability to work shall be delivered to the employer by the Social Insurance Agency on the basis of a request of a general practitioner of the concerned employee.

Nursing a (sick) family member

In case of absence of an employee for the reason of provision of care for a child younger that ten years of age due to the interruption of educational process the same procedure shall apply as in a case of ordinary nursing a sick family member. The employee is obliged to inform the employer without delay about the aforementioned. In case of employees with children older that ten years of age it is necessary for a paediatrician to formally order the necessity of personal and full day care for the child.

Holiday

The employer may order an employee to take a holiday leave. The employee should be informed about such order reasonably in advance. At this time, if the employer is limited in the allocation of work to the employee through home office, the employer is entitled to order an employee to take a holiday leave.

If the employer is interested in ordering a holiday leave for a limited time to employees collectively, it is obliged to notify the employees of such ordered holiday leave at least 14 days in advance. Collective holiday leave cannot be ordered for more than two weeks.

Home office

If the type of work of the concerned employee allows for the possibility of working from home, the employee and the employee may agree, that the employee will work from home for an agreed period (home office).

Obstacle on the part of the employer

The employer is under Section 5 of Act No. 124/2006 Coll., on safety and health protection at work obliged to apply the general principles of prevention in implementation of measures necessary to ensure safety and protection of health at work. In the light of the abovementioned, the employer may, on the basis of its sole discretion, arrive to a conclusion (especially if it is not possible to agree on home office or to order a holiday leave), that in order to ensure protection and health of the employees, it is necessary to order the employees to leave the workplace. This will be then considered as an obstacle on the part of the employer and the employee is entitled to wage compensation equal to his average earning during its duration.

Special arrangement for obstacles on part of the employer

Where representatives of employees are present (trade union, works council, employee trustee) in a company, the employer may conclude a written agreement with such representatives of the employees, the subject of which is (i) definition of serious operational reasons, for which the employer cannot allocate work to employees; and (ii) the amount of wage compensation, to which the employee is entitled during the duration of such obstacle (in any case at least 60 percent of the average earnings of the employee). This agreement may be concluded only with the representatives of employees and cannot be replaced by a decision of the employer. If the employer has established a working time account by means of a collective agreement with representatives of the employees, the employer may, for serious operational reasons, not observe the weekly working time schedule, valid at least one week in advance.

Closure of certain establishments

Via measure of the Public Health Authority of the Slovak Republic a duty to close all retail and services establishments (with the exception of specific establishments, such as pharmacies drugstores etc.) has been introduced. If, as a result of this measure, the employer is unable to allocate work to employees (for example employees performing personal customer service – sellers, dealers, operators etc.), it is possible to address this situation temporarily through an agreement on change of working conditions, whereby the employer and employee agree on performance of work different from that, which is stipulated in the employment contract or agree on different working hours. Such agreement must be executed in written form, otherwise it is invalid. If the employer could not allocate work to the employee, it would be considered as an obstacle on the part of the employer and the employee would be entitled to wage compensation equal to his average earnings.

Agreement on shorter working hours and shared jobs

In case of decrease in workloads resulting from the crisis and the impact of government measures, the employers may utilize the following institutes in order to preserve job positions:

• an agreement with employee on shorter working hours;
• an agreement on the placement of an employee to a shared (part-time) job position in case of an agreement on shorter working hours.

Allocation of other work

The employer may, in order to preserve job positions and at his own discretion, allocate an employee to a different kind of work or place of work than agreed in the employment contract, if the terms of employment or other internal regulation of the employer indicate, that present situation may be considered an emergency situation that can be averted by relocation of employees. For the sake of legal certainty, it is recommended to include a definition of an emergency situation in the internal company regulations.

Unpaid leave

If the application of the aforementioned is not possible, another option is to agree with the employee on taking a time off work without wage compensation.

Arbitrary absence of employee from work

In view of the unpredictability of the current situation, the possibility that an employee refuses to appear at the place of work of his own volition cannot be excluded. In such case, if the life or health of the employee in the workplace is not endangered, such conduct of the employee may be considered as a breach of work discipline. However, the employer is obliged to provide the workplace with sufficient protective equipment, otherwise existence of a health risk could be argued by the employee.

The list above cannot cover all eventualities which may arise, including the occurrence of other obstacles barring performance of work (e.g. the employee cannot come to work because of border closure, inoperative traffic etc.). In spite of the crisis situation, all issues of labour law must always be dealt with in accordance with legal regulations, thus avoiding the risk of negative consequences for the employer.

We are at your disposal to address all of the above and other situations arising from the coronavirus crisis and COVID-19 disease in labour-law relations.

We are available to answer any questions.

BBH advokátska kancelária, s.r.o.

This memorandum may not be relied upon or used by any party without the prior written consent of BBH, advokátní kancelář, s.r.o., regardless of whether the use is of private nature, or for civil, administrative, criminal or other court purposes.