New legislative solutions for flood recovery
On 9 August 2023, the National Assembly of the Republic of Slovenia adopted an amendment to the Natural Disaster Recovery Act[1] (hereinafter: ZOPNN-F), the fundamental objective of which is to ensure the possibility of rapid and effective elimination of the consequences of natural disasters. The amendment was adopted under the urgent procedure in the light of the recent catastrophic floods in the Republic of Slovenia. Accordingly, the adopted legislative solutions entered into force on the day following their publication in the Official Gazette of the Republic of Slovenia. Below is a set of key intervention measures to address the consequences of the August 2023 floods.
As previously mentioned, these are intervention measures the validity of which is limited in time, namely until 31 December 2023. Thus, notwithstanding the provisions of Public Holidays and Work-off Days in the Republic of Slovenia Act, in 2023, the ZOPNN-F sets an additional public holiday, namely 14 August 2023. Workers will be entitled to be absent from work on that day, with the right to 100% wage compensation, and if they work on that day, they will be entitled to an allowance for public holidays or work-off days, as determined by the relevant collective bargaining agreement.
As one of the temporary measures, the amendment also provides for the possibility of deferring the payment of obligations under facilities agreements provided by a public fund established by the Republic of Slovenia. The deferment of repayment of the obligations for a maximum period of 12 months is achieved by the borrower by means of an application, which must be submitted by 31 December 2023 at the latest. It should be emphasised that the measure applies only to obligations which have not yet fallen due by the date of entry into force of the respective amendment.
The amended legislation also introduces a prior programme of emergency measures to deal with the consequences of natural disasters, which allows for advances of aid to be granted to local authorities, other direct State budget users and, as an intervention measure, to companies to deal with the consequences of natural disasters before the damage assessment has been certified. As an aid to the economy, this will allow advances to be made to beneficiaries that are unable to operate their business or the operations of which are hampered by a natural disaster, up to 10% of the preliminary damage assessment.
ZOPNN-F also provides for the inapplicability of provisions on contractual penalties and the extension of contractually agreed deadlines for the duration of the consequences of natural disasters in contracts for the supply of goods and the provision of services concluded between private-law entities and the public sector in the broader sense, except insofar as they relate to the supply of goods constituting equipment necessary to deal with the consequences of floods.
In the area of the labour market, ZOPNN-F introduces the following temporary measures:
(i) an increase in the compensation for workers who are unable to perform their work due to force majeure;[2] the compensation will thus amount to 80% of the base and may not be lower than the minimum wage in the Republic of Slovenia (i.e., EUR 1,203.36 gross), with the measure being valid from 3 August 2023 until 31 December 2023,
(ii) full reimbursement of the wage compensation of workers who are unable to work due to force majeure, for the period from 3 August 2023 to 31 December 2023, based on electronic application submitted by employers to the Employment Service of Slovenia,[3]
(iii) employers who are established no later than 2 August 2023 and are temporarily unable to provide workers with work due to the consequences of the floods[4] may place workers on temporary standby for the period from 3 August 2023 to 31 October 2023; the Government of the Republic of Slovenia may extend this measure by a resolution, however for a maximum period of the duration of the intervention measures, i.e., until 31 December 2023,
(iv) workers who are placed on temporary standby in accordance with the previous measure will be entitled to compensation equal to 80% of the base wage, but not less than the minimum wage, and employers will be entitled to reimbursement of the compensation paid for temporary standby, equal to the amount of 80% of the wage compensation, up to the maximum amount of the average wage in the Republic of Slovenia in May 2023 (i.e. EUR 2,208.15), whereby the employers can claim the reimbursement on the basis of an electronic application submitted to the Employment Service of Slovenia,[5]
(v) notwithstanding the provisions of the Employment Relationships Act, volunteers who carry out voluntary work within the framework of a volunteer organisation are entitled to paid leave of absence from work for a maximum of seven working days for the purpose of flood relief, the wage compensation of the said volunteers being fully covered by the Republic of Slovenia, and
(vi) an increase in the one-off solidarity grant, which does not count towards the taxable amount of income from employment, to EUR 10,000.00, provided that the employer pays the said grant to the employee as a result of the severe damage[6] caused by the floods in August 2023.
Even if it is not an intervention measure aimed solely at eliminating the consequences of the floods in August 2023, it is nevertheless worth mentioning, within the framework of the novelties introduced by ZOPNN-F, the possibility of financial engineering in the form of loans or guarantees aimed at eliminating the consequences of natural disasters, which will be provided by SID banka, d. d., Ljubljana.[7]
[1] Official Gazette of RS, no. 75/2003, 98/2005, 90/2007, 102/2007, 40/2012-ZUJF, 17/2014, 163/2022, 18/2023 - ZDU-1O, 88/2023.
[2] Absence from work due to force majeure because of a natural disaster under ZOPNN-F includes inability to report for work, inability to perform work due to carrying out emergency actions to repair damage or to carrying out emergency actions to protect human and animal life or health and to prevent and avert damage, or other circumstances of inability to perform work as a result of a natural disaster. In the event of absence from work due to force majeure because of a natural disaster, the worker must notify the employer no later than three working days after the entry into force of ZOPNN-F or within three working days of the onset of the circumstances giving rise to the force majeure.
[3] It should be noted that during the period of reimbursement, the employer may not: i) initiate the procedure for the termination of the employment contract on business grounds against workers who are placed on temporary standby and for whom the employer has claimed reimbursement of the wage compensations, or ii) dismiss a large number of workers, unless the proceedings have already been initiated before 3 August 2023. Such employer may also not pay out profits, make purchases of its own shares, or pay bonuses or performance bonuses to management as from 3 August 2023. In the event of a breach of these obligations, the employer is obliged to repay the funds received.
[4] This measure is not available to (i) employers who are direct or indirect users of the budget of the Republic of Slovenia or the budget of a municipality, (ii) employers who carry out financial or insurance activities falling under group K according to the Standard Classification of Activities and who have more than ten employees as of 2 August 2023, and (iii) foreign diplomatic missions and consulates, international organisations, and the institutions, bodies and agencies of the European Union in the Republic of Slovenia.
[5] During the period of receiving the reimbursement of the wage compensations, the employer may not: i) initiate the procedure for the termination of the employment contract on business grounds against workers who are unable to perform their work due to force majeure and for whom the employer has claimed reimbursement of the wage compensations, or ii) dismiss a large number of workers, unless the proceedings have already been initiated before 3 August 2023. Such employer may also not pay out profits, make purchases of its own shares, or pay bonuses or performance bonuses to management as from 3 August 2023. In the event of a breach of these obligations, the employer is obliged to repay the funds received.
[6] In accordance with ZOPNN-F, serious damage is damage that endangers health and causes an unsuitable living environment for habitation.
[7] This measure is limited in time and value. The Loan Fund can therefore be set up to the maximum amount of EUR 100 million and the funds will have to be used within two years of its creation. The Guarantee Scheme may also not exceed EUR 100 million and will be available until the funds are used up or until two years after its creation.