The outbreak of Novel Coronavirus (COVID-19) is a worldwide pandemic and the World Health Organization has declared that this is a public health emergency of international concern. Understandably, this may be creating great concern and unrest for you and amongst your workforce. Below we answer some key questions to clarify employers' legal obligations and support you in protecting your business and people.
What are employers' obligations in respect of COVID-19?
At the time of writing, (25 June 2020) there are several specific state-induced mandatory obligations for certain employers in respect of COVID-19:
- • All hair salons, nail salons and other businesses delivering services in the field of beauty/external care where close contact between individuals is unavoidable were permitted to resume operations from 11 May 2020. However, social distancing rules should be observed as much as possible (i.e. keeping a 1.5 metre distance) and such businesses are obliged to work by appointment and conduct quick surveys with customers to check for symptoms of COVID-19;
- All secondary schools re-opened on 2 June 2020 (albeit not in full force, given that social distancing rules must be observed); After the summer break, secondary schools will fully re-open. Pupils are not obliged to socially distance amongst each other, but social distancing rules between pupils and teachers will remain in force;
- All bars, cafés and restaurants were permitted to resume operations from 1 June 2020, provided that social distancing rules are observed and the businesses conduct quick surveys with customers to check for symptoms of COVID-19. Further, no more than 30 people are allowed on the premises at any one time, excluding staff. This is due to be raised to 100 people from 1 July 2020. However, there will no longer be a maximum number of guests if there is fixed seating, guests make reservations, businesses conduct surveys with customers for symptoms of COVID-19 and social distancing rules are being observed. Terraces can also re-open subject to social distancing rules, but discos and clubs must remain closed until 1 September 2020;
- Cinemas and cultural institutions re-opened on 1 June 2020. Social distancing rules must be observed and no more than 30 people are allowed on the premises at any one time, excluding staff. This is due to be raised to 100 people from 1 July 2020. However, there will no longer be a maximum number of guests if there is fixed seating, guests make reservations, businesses conduct surveys with customers for symptoms of COVID-19 and social distancing rules are being observed);
- Museums re-opened from 1 June 2020. Tickets must be sold upfront to control visitor streams and ensure that social distancing rules are observed;
- Gyms, saunas, sex clubs, coffee shops and casinos will re-open from 1 July 2020. Numbers of guests allowed is 100 people from 1 July 2020. However, there will no longer be a maximum number of guests if there is fixed seating, guests make reservations, businesses conduct surveys with customers for symptoms of COVID-19 and social distancing rules are being observed;
- From 1 July 2020, the number of visitors of outdoor events (e.g. festivals) shall not exceed 250 people. Social distancing rules should be observed at any time;
- All shops, markets and public transport services that do not take sufficient measures to ensure that customers comply with social distancing regulations (see below) on their premises (e.g. by applying a door management policy) must be closed.
For various industry-sectors, employers’ associations have published protocols assist businesses in implementing the necessary measures. Please see https://www.mijncoronaprotocol.nl/ for the relevant protocols (in Dutch).
At the time of writing (25 June 2020), the Dutch government and the National Institute of Public Health and Environment (RIVM) are advising to work from home if possible. Employers should consider this to be an obligation to facilitate employees to work from home (if possible).
Additionally, the Dutch government and the National Institute of Public Health and the Environment (RIVM) are advising (among other things):
- if an infection is suspected, the person in question must be isolated at home or in a hospital;
- to stay home, if you have a cold, a cough, fever or a sore throat;
- to stay home, if a member of your household (1) has a cold and/or a cough, and (2) develops a fever or stuffiness. Exceptions apply for people working in crucial sectors (e.g. healthcare, emergency services, public transport), provided that they are not sick;
- to keep at least 1.5 metres’ distance from each other (‘social distancing’);
- to work from home, if possible, or (as an alternative) to work in shifts to avoid as much contact with others as possible, if possible;
- for vulnerable people (the elderly and those with weakened immune systems) to avoid public transport; and
- to only use public transport if strictly necessary and to wear (non-medical) face masks on public transport (mandatory from 1 June 2020). From 1 July 2020, however, public transport can be used for non-essential travel again.
Additionally, employers should ensure that they are taking any necessary steps to protect their employees. Under the Dutch Working Conditions Act and the Dutch Civil Code, all employers have generic health and safety obligations to keep employees informed about health risks that may arise in carrying out their duties and ensure that working practices do not create undue risks to employees. However, we note that the extent of such obligations is to some degree vague and depends on the (developing) situation.
Under the generic health and safety obligations, employers should carry out ongoing risk assessments and consider any factors that may make employees particularly susceptible to infection at the workplace. Employers should enforce ‘social distancing’ on the work floor (e.g. 1.5m distance between employees). Employers should also consider circulating up-to-date information on good hygiene practices and provide any necessary equipment to facilitate this, such as hand sanitisers. For example, we recommend issuing a reminder on actions employees can take to help stop viruses like coronavirus spreading. Such advice may include:
• cover your mouth and nose with a tissue or your sleeve (not your hands) when you cough or sneeze;
• cut used tissues in the bin immediately;
• wash your hands with soap and water often – use hand sanitiser gel if soap and water are not available;
• try to avoid close contact with people who are unwell.
We further recommend notifying employees where they can access more information if they are concerned.
Can employers request or require information from an employee about potential or actual exposure to the virus?
In the Netherlands, an employer may instruct an employee to see a company doctor if there are legitimate grounds for doing so (such as the employee having a fever). Although an employer can require an employee to see a company doctor, they cannot physically force them to do so. Having said that, failing to follow such an instruction may result in disciplinary action.
The question of whether an employee can be asked to sign a declaration about where they have been, their exposure to the virus, or be required to provide information to an employer in order for the employer to provide confirmation to a customer, sits firmly in the crossover between data privacy and employment laww.
Any such data must be processed in line with the applicable privacy requirements. Information about an employee's health (such as whether the individual has been diagnosed with the virus or is experiencing any symptoms) is sensitive personal data and accordingly additional requirements and obligations apply to the processing of such data. Despite the GDPR being EU-wide legislation, the position is complex from a European data privacy perspective. Employers will find that the type and extent of the information they can compliantly process, and the legal basis for doing so, varies from country to country.
On 20 March 2020, the EDPB (the European data protection advisory body, formed of representatives of national data protection authorities) published a formal statement in relation to COVID-19. In relation to whether an employer can disclose that an employee is infected with COVID-19 to their colleagues, the EDPB advises that this should be done only where necessary (e.g. in a preventive context) and where national law allows this. In such case, the concerned employees shall be informed in advance and their dignity and integrity shall be protected.
In the Netherlands:
- The processing of 'health data' by employers is highly restricted.
- Employers could seek to rely on an exemption to this restriction for preventive or occupational medicine under art. 9(2)(h) GDPR together with art. 30(3) of the Dutch Implementing Act GDPR (Uitvoeringswet AVG, UAVG).
- However, this exemption may only apply to (i) social services / healthcare workers, institutions or facilities, or (ii) insurance companies. Employers cannot rely on this directly.
- It may be possible to have a company doctor or occupational health and safety service (arbodienst) ask employees health related questions under this exemption.
Employers may also face situations where a customer/client requires travel or health information relating to their employees when visiting the customer/client's site. In such cases, it should be explored whether there is a legitimate interest in requesting employees to provide their travel information for this purpose.
Further to the above, the position regarding European data privacy rules and how they impact information relating to COVID-19 is developing. A number of EU governments have issued further guidance and more still are considering whether emergency legislation may be required, particularly as the situation escalates. The position will need to be kept under review as the situation evolves and further guidance becomes available.
What should employers do if an employee is absent or infected?
If an employee has been diagnosed with or is suspected to have contracted the virus, then the employer will have reasonable grounds to request them to stay at home. It is probable that this employee would be quarantined regardless. Employees will be entitled to paid sick leave as per contractual terms or absent those, statute.
Refusal to work or attend work
Employees can refuse to attend work if they have a 'legitimate and concrete concern' of contracting or spreading the virus. This will vary from one situation to another and will depend on the level of escalation of the virus, but the employee cannot simply refer to the general national circumstances. Rather, the legitimate or concrete concern must directly relate to (i) the (physical) work environment; (ii) the use of necessary means of (public) transport to attend work; and/or (iii) other personal circumstances (e.g. the employee’s spouse is a medical doctor).
This may also be affected by the necessity of the employee attending the regular workplace, for example, ‘vital professions’ are generally expected to continue their activities. In contrast, if the employee can perform his duties at home, it is more likely that their concern should be considered ‘legitimate and concrete’.
What are employers' obligations where offices are partially or fully closed?
There is no obligation for an employer to close its facilities where, for example, the Government has closed some its own departments. However, employers should take whatever measures are reasonable to mitigate the spread of the disease and keep employees safe. We have seen a marked increase in companies closing their physical locations (mainly shops) voluntarily, i.e. without any specific government order to do so.
If the employee cannot perform his/her duties for reasons relating to the COVID-19 virus (other than being sick), prima facie the employee shall remain entitled to pay, but this is a grey area and very much in flux. There is no case law yet giving any specific guidance. One of the factors will likely be the extent to which the employer controls the reason for not performing duties (e.g. voluntary shut down). Conversely, in the event of a state-induced mandatory shut down, it is perceivable that the company would not be obliged to continue paying salaries. The answer to this question will also depend on whether the employer qualifies for NOW compensation (see below).
What measures have been taken to support employers during this crisis?
Reduction of working hours arrangement abolished
The Dutch government announced several measures to support companies during this crisis. Earlier, employers had the option of applying for a permit to reduce the working hours within the company. The government, however, abolished that arrangement with immediate effect on 17 March 2020, as part of emergency legislation.
In substitution of the abolished ‘hours reduction’ scheme, the government adopted the “Temporary Emergency Bridging Measure for Sustained Employment” (Tijdelijke Noodmaatregel Overbrugging voor behoud van Werkgelegenheid) (“NOW”), offering companies an aid package aimed at compensating employers’ wage costs over March, April and May 2020 (rather than a scheme allowing the reduction of working hours).
The below information is a very high-level overview.
To qualify for NOW-compensation, the following conditions apply (among others):
- a decrease in net revenues of at least 20 per cent in a consecutive three-month period between 1 March 2020 and 31 July 2020. The revenue during this three month period must be at least 20 per cent lower than 25 per cent of the companies' annual net revenues in the 2019 calendar year (i.e. representing revenue over a three month period). We note that the decrease in revenues may need to be assessed at group-level for companies that are part of a group;
- the employer should keep the level of wages equal during the compensation period (we believe that this is a rather vague way of saying employers should continue paying the employees’ wages);
- the employer should use the compensation only for the purpose of continuing paying the employees’ wages;
- the employer shall not resort to dismissal of the employees on economic, technological or organizational grounds (during the period for which the employer receives compensation); and
- the employer should inform the Works Council or Personnel Representative Body of its intention to submit a NOW application (or, absent any of such bodies, the Town Hall).
If the request for compensation is granted, the employer will receive compensation for up to a maximum of three times the actual employers’ wage costs incurred in January 2020, including a surcharge for social security contributions and pension contributions. Compensation will thus be given for a three-month period (initially). The actual level of compensation will depend on the level of the drop in revenues:
- if revenues drop by 100 per cent, employers will be compensated for 90 per cent of the employers’ wage costs; and
- if revenues drop by 50 per cent, the employer will be compensated for 45 per cent of the employers’ wage costs (i.e. the level of compensation of employers’ wage costs is equal to 90 per cent of the per centual drop in revenues).
Compensation for each individual employee’s wage is capped at EUR 9,538 (gross) per month. Further, if the employers’ average wage costs per month during the compensation period is less than the employers’ wage costs in January 2020, the level of compensation will be reduced by the decrease in employers’ wage costs. Lastly, if the employer does not fully meet its obligations under the NOW scheme, their application may be rejected (to the extent relevant, with retro-active effect) or a lower entitlement to compensation may be provided (e.g. in case the employer petitions the Employment Tribunal for permission to issue notice of termination on economic, technological or organizational grounds).
The government will make an advance payment for 80 per cent of the estimated amount of compensation based on the expected/forecasted drop in revenues and the employers’ actual wage costs in January 2020, to be paid in maximum three instalments. After expiry of the period for which the NOW compensation has been granted, a final settlement will be made, and any remaining compensation will be paid (if applicable). The level of the remaining compensation – if any – will depend on (among other things):
- the actual drop in revenues compared to the expected/forecasted drop in revenues;
- the employers’ average wage costs per month during the period for which the employer receives compensation, compared to the employers’ wage costs in January 2020;
- whether or not the employer met all other conditions under the NOW scheme (e.g. did the employer petition the Employment Tribunal to dismiss employees on economic, technological or organizational grounds?); and
- submission of a statement by an (external) auditor on the actual drop in revenues (required if the advance payment exceeds EUR 100,000 and/or the actual entitlement to NOW Compensation exceeds EUR 125,000). If an external auditor’s statement is not required and the advance exceeds EUR 20,000 and/or the actual entitlement to NOW Compensation exceeds EUR 25,000, a similar statement from another professional third-party (e.g. an employers’ association or a financial advisor) is required.
As from 6 June 2020, applications to NOW (1.0) can no longer be submitted.
Update: NOW 2.0
The Dutch government has adopted a four month extension of the NOW Scheme, providing compensation for the employers’ wage costs over June, July, August and September 2020 (“NOW 2.0”). NOW 2.0 shows great resemblance to NOW (1.0), and as such the information provided above remains relevant, albeit with certain exceptions. A short summary of NOW 2.0 is provided below.
The eligibility criteria under NOW 2.0 is similar to that of NOW 1.0, i.e. a drop in revenues of at least 20 per cent, albeit under NOW 2.0 in a four month consecutive period between 1 June 2020 and 30 November 2020, compared to a third of the 2019 annual revenues (i.e. representing revenues over a four month period). We note that this was one quarter under NOW 1.0, given that the subsidy period was three months under the previous scheme. Different methods to establish the drop in revenues may apply, e.g. for startups and companies that recently acquired or divested a business.
The method to calculate NOW 2.0 Compensation is similar to that under NOW 1.0 -the exact level will depend on the drop in revenues, but shall be no more than 90 per cent of four times the actual employers’ wage costs incurred in March 2020, including a surcharge for social security contributions and pension contributions. (We note that the surcharge has been increased from 30 per cent under NOW 1.0 to 40 per cent under NOW 2.0).
As before, compensation for each individual employee’s wage is capped at EUR 9,538 (gross) per month and the government will make an advance payment of 80 percent of the expected NOW 2.0 Compensation, based on the expected drop in revenues. Corrections to the level of NOW 2.0 Compensation (most of them similar to those applicable under NOW 1.0) will be made if the employer does not meet its obligations under NOW 2.0.
The following obligations (among others) apply to employers, in addition to those that already were applicable under NOW 1.0:
- refraining from petitioning the Employment Tribunal to request permission to issue notice to employees for Economic, Technological and Organizational grounds (“ETO Grounds”). If this occurs, the level of NOW 2.0 Compensation will be reduced by 90 per cent of the March 2020 employers’ wage costs for the relevant employee (the employee for whom the employer petitioned the Employment Tribunal), multiplied by 3. We note that this sanction is lower than under NOW 1.0.
- further, if the employer contemplates dismissing 20 or more employees within a rolling three month period and therefore (i) notifies the relevant trade unions pursuant to the Collective Dismissal Notification Act (“Collective Dismissal”), and (ii) petitions the Employment Tribunal on ETO Grounds during the subsidy period, an additional 5 per cent reduction will be applied to the level of the NOW 2.0 Compensation. This reduction will not occur if the relevant trade unions consent to the redundancies or, absent such consent, if the employer and the relevant trade unions jointly petitioned the Labour Foundation (a committee in which employers' associations and trade unions are being equally represented; Stichting van de Arbeid) to assess the necessity of making the redundancies;
- investing in employee mobility/employability (e.g. through training programs); and•
- if an external auditor’s statement is required (i.e. if the advance payment exceeds EUR 100,000 and/or the actual entitlement to NOW 2.0 Compensation exceeds EUR 125,000), the applying company should provide a statement that the applying company will:
- refrain from payments/grants to (certain categories of) Executives e.g. bonuses / profit distributions / LTI in the period up to and including the date whereon the general meeting of shareholders will adopt the 2020 annual accounts. This obligation seems to include payments made by the applying company to Executives of the ultimate parent company or another parent company within the group, if the applying company is part of a wider group of companies. The obligation relates to e.g. bonuses / profit distributions / LTI over (and thus in respect of) the calendar year 2020 only (i.e. not to bonuses granted over 2019 and paid in 2020);
- refrain from paying dividends to its shareholder(s) in the period up to and including the date whereon the general meeting of shareholders will adopt the 2020 annual accounts, albeit that the obligation excludes among others payment of dividends over (and thus in respect of) the calendar year 2019;
- refrain from repurchasing shares in the period up to and including the date whereon the general meeting of shareholders will adopt the 2020 annual accounts.
The sanction for breaching any of the above statements is that the NOW 2.0 Compensation will be reduced to nil.
Applications to NOW 2.0 Compensation can be submitted from 6 July 2020 and up to and including 31 August 2020 at the Institute for Employee Benefits UWV. If considering applying for the scheme, we recommend consulting your external accountants/auditors to assess the full extent of these new obligations.
Compensation for entrepreneurs in affected sectors (TOGS)
On 27 March 2020, the government launched a scheme to support specific sectors affected by the government’s COVID-19 measures. The below information is a very high-level overview.
Whether or not a company is in a relevant sector will be assessed by a special industry-code (SBI Code), which can be found in the Trade Register of the Chamber of Commerce. The list can be found here.
Companies in the relevant sectors may receive a EUR 4,000 grant, provided that, in the period from 16 March 2020 up to and including 15 June 2020:
- the company expects to suffer a loss in revenues of at least EUR 4,000 due to government measures; and
- the company’s fixed charges exceed EUR 4,000 (after deduction of any other compensatory measures for which the company may be eligible, e.g. the NOW scheme).
To be eligible, the company must not employ over 250 employees and/or have received over EUR 200,000 in government subsidies. Entrepreneurs who work from home will also not be eligible.
The TOGS scheme enters into force with retroactive effect from 27 March 2020. Applications can be made up to and including 26 June 2020, through the Netherlands Enterprise Agency, RVO: https://english.rvo.nl/coronavirus.
The Dutch government announced that it will extend the TOGS scheme, albeit that this scheme will be reflected in an entirely new regulation, which, as before, only applies to certain companies in specific sectors. Whilst the actual text of the regulation has not yet been published, a brief overview of information published to date (25 June 2020) is provided below.
The regulation is open to small and medium-size companies with less than 250 employees. Under the new regulation, companies may be eligible for a grant of up to EUR 50,000 to cover fixed charges (excluding wage costs) for the period of June, July, August and September 2020, provided that they incur a drop in revenues of at least 30 per cent. Given that an entirely new regulation will be adopted, we anticipate that different and further conditions will apply. Applications cannot yet be made. We will provide further information as it becomes available.
The government has also announced several other measures aimed at supporting companies, including allowing companies to postpone tax payments and enforcing an already existing contingency fund which supports companies with difficulties in opening credit lines.
Where can employers and employees access local and national advice?
Last reviewed: 25 June 2020