The National Council and the Federal Council unanimously adopted the Second COVID-19 legislative package on Friday and Saturday respectively, most of which entered into force yesterday. As a result, 39 existing laws were amended and five new laws were enacted. In addition to enhancements to the special provisions of the First COVID-19 legislative package, a hardship fund was created and numerous other new provisions were introduced in response to the COVID-19-crisis. The following is an overview of the most important new regulations for companies.
Working-time reduction model (Corona-Kurzarbeit) – new provisions.
The Public Labour Office (Arbeitsmarktservice – AMS) will now also refund the employer’s contributions to the social security provider. It is not a binding prerequisite anymore for employees to consume remaining vacation and overtime entitlements; instead, consumption of overtime and vacation entitlements may be regulated by company agreement. The Act also clarified that working-time reduction can also apply to apprentices and members of the executive body, if they are covered by the Social Security Act (Allgemeines Sozialversicherungsgesetz – ASVG). There are also slight changes regarding the application procedure. Employers shall send the company agreement or individual agreement(s) (in companies without a works council) directly to the competent social partners, together with a statement regarding the economic necessity of the working-time reduction. After the social partners have signed the agreement(s), the employer has to fill in the new application form for working-time reduction and send all of the documents to the AMS. Moreover, the Second Act on COVID-19 has raised the fund for the working-time reduction measures to EUR 400 million.
Businesses with entry-ban – consumption of vacation entitlements.
Art. 10 of the Second Act on COVID-19 concerns businesses affected by an entry-ban or operating restrictions based on the First Act on COVID-19. It provides that employees can be requested by their employer to consume remaining overtime entitlements, as well as vacation entitlements of past years. Overtime entitlements based on the conversion of monetary entitlements as stipulated in collective bargaining agreements are excluded, as well as vacation entitlements arising in the current year. An employee can be asked to consume the latter to the maximum amount of two weeks. Overall, an employee can be requested to consume vacation and overtime entitlements to a maximum extent of eight weeks.
Deferrals of an employer’s social security contributions.
Businesses affected by an entry-ban or operating restrictions based on the First Act on COVID-19 may defer contributions for the months of February, March and April 2020 without late payment interest fees. Other businesses may also apply for a deferral, if they can show that the contributions cannot be payed due to the COVID-19-pandemic, and the resulting threat to the company’s liquidity.
Further employment law amendments.
For the public sector, the Act provides that if it is in the public interest, public servants and contract staff can be requested to consume remaining overtime and vacation entitlements to a maximum extent of two weeks. Other changes include provisions on pre-retirement part-time-work (Altersteilzeit), the extension of mandates of employee representatives, and the special care leave (Sonderbetreuungszeit), which can now also be requested to care for persons with disabilities. Apart from this, the Act contains provisions regarding the extension of legal time-limits.
Establishment of a hardship fund.
Sole proprietorships, freelancers, non-profit organizations and micro businesses may in future apply for a federal subsidy to deal with the legal and economic consequences of COVID 19. For such hardship cases, the federal government will set up a hardship fund and provide a maximum of one billion Euro for this purpose. The Federal Minister for Finance, in agreement with the Vice-Chancellor and the Federal Minister for Digital and Economic Affairs will adopt a directive, which will regulate the further details (e.g. funding level, personal and factual conditions, procedures, duration of validity). The Austrian Chamber of Commerce will manage this support program.
Measures regarding company law.
Along with the second COVID-19 legislative package, the new COVID 19 Corporate Law Act (COVID-19-GesG) entered into force, which will expire at the end of 31 December 2020. The law provides for the following new regulations in the area of company law: For the duration of measures taken to prevent the spread of COVID-19 according to the COVID-19 Measures Act (COVID-19-Maßnahmengesetz), meetings of shareholders and members of corporate bodies of a corporation, a partnership, a cooperative, a private foundation or association, a mutual insurance association or a small insurance association may be held without the physical presence of the participants (e.g. by means of a video conference) in accordance with a regulation to be issued by the Federal Ministry of Justice. In addition, notwithstanding Sec. 104 para. 1 of the Austrian Stock Corporation Act, ordinary general meetings of a stock corporation may be held within the first twelve months of the financial year of the company concerned. Both the provisions regarding the holding of meetings of shareholders and members of corporate bodies and the longer period for ordinary general meetings take precedence – as special statutory provisions – over any deviating provisions in articles of association.
Interruption of time limits in court proceedings.
In court proceedings (civil proceedings, non-contentious proceedings, land register and commercial register proceedings, execution proceedings and insolvency proceedings), pending statutory and judicial time limits are interrupted until the end of 30 April 2020. The time limits shall restart on 1 May 2020. In addition, the period from 23 March 2020 until the end of 30 April 2020 shall not be included in the period in which an action or application is to be brought before a court or a declaration is to be made. This concerns in particular limitation periods.
Reduction of court operations.
For the period of the general measures to prevent the spread of COVID-19, consultations and oral hearings shall only be held under certain conditions (prevention of danger to life and limb, security and freedom, etc.). Urgently required consultations or oral hearings can also be held using suitable technical means of communication (e.g. video conference).
Suspension of deadlines in tax and fiscal penal law procedures. As further facilitation for taxpayers in connection with the COVID-19-pandemic, the Austrian Parliament adopted a suspension for certain – explicitly defined – deadlines in tax as well as fiscal penal law procedures. This includes, in particular, deadlines for filing appeals (“Beschwerden”), objections (“Einsprüche”), requests of referral (“Vorlageanträge”), etc. Furthermore, the deadline for tax returns 2018, that have not yet been filed, will be extended until 31 August 2020. Not included – according to the current level of information – are deadlines for filing an application for deferred payment as well as the deadline for filing an application for the annulment of a tax assessment pursuant to Sec. 299 Austrian Fiscal Code (within one year after notification). Whether or not additional measures in this connection will be announced, remains to be seen. Further details regarding the included deadlines can be found in the Article from 20 March 2020.
Modified time limits in tax and fiscal penal law procedures.
The interruption of time limits is applicable for all mentioned deadlines that were still open on 16 March 2020, or which started/start running between 16 March and 30 April 2020. The concerned deadlines will be suspended until end of 30 April 2020 and will restart on 1 May 2020. The Ministry of Finance can prolong the special regulations, if necessary. Please note that under specific conditions the tax authorities as well as the fiscal penal authorities may exclude certain deadlines from the special regulations. In such case the authorities have to notify the respective parties as well as order a new, reasonable deadline. Further details regarding the special regulations in connection with time limits can be found in the Article from 20 March 2020.
Interruption of time limits in other administrative procedures.
On 22 March 2020 the Federal Act on accompanying measures to COVID-19 in administrative proceedings, in proceedings of the administrative courts and in proceedings of the Administrative Court and the Constitutional Court entered into force, which will expire at the end of 31 December 2020. The act provides for the following regulations regarding the interruption of time limits in administrative proceedings: In pending administrative proceedings of the administrative authorities to which the administrative procedure acts (AVG, VStG and VVG) are applicable, all time limits whose triggering event falls within the period after the entry into force of this act, as well as time limits which have not yet expired by the time this act enters into force, shall be interrupted until the end of 30 April 2020. The time limits shall restart on 1 May 2020. This also applies to limitation periods (Sec. 31 VStG), but not to maximum periods laid down in the Constitutional Law and to periods under the Epidemic Law. In certain cases (averting a danger to life, safety and freedom or to prevent a substantial and irretrievable damage to a party, etc.) the authority may declare in the respective proceedings that a period is not interrupted. At the same time, the authority must set a new reasonable time limit. The time from the entry into force of the act until the end of 30 April 2020 shall not be included in the period in which an application to initiate proceedings (Sec. 13 para. 8 AVG) is to be filed. The Federal Chancellor is authorised to extend or shorten the interruption of time limits or to provide for further general exceptions to the interruption by regulation, insofar as this is necessary to prevent and combat the spread of COVID-19. These provisions shall also apply to the proceedings of the administrative courts, if at least the AVG is also applicable to the respective proceedings, as well as to the proceedings of the Administrative Court and the Constitutional Court.
Extension of the time limit for petitions for insolvency.
Pursuant to Sec. 69 of the Austrian Insolvency code (IO), a debtor is obliged to apply for the opening of insolvency proceedings no later than 60 days after the occurrence of illiquidity. In the event of illiquidity caused by a natural disaster, this period is extended to 120 days. In § 69 IO it is now expressly clarified that an epidemic and a pandemic also fall under the term natural disaster. This extends the period for applying for the opening of insolvency proceedings to 120 days after the event of insolvency if caused by the COVID-19-pandemic.
A new section provides for a comprehensive exemption from fees and federal administrative charges for all documents and official acts that are carried out directly or indirectly based on the necessary measures in connection with the management of the COVID-19 crisis. This new Sec. 35 para. 8 GebG entered into force on 1 March 2020 and will expire at the end of 31 December 2020.
Facilitation of the service of documents.
As long as procedural deadlines are interrupted due to the COVID-19 pandemic, certain facilitations apply to the service of judicial and administrative documents. These facilitations aim at reducing the personal interaction between the deliverer and the addressee of the document (abandonment of the requirement for the counter-signature of a return receipt by the addressee).
Merger Control (Austria).
For merger filings that are submitted to the Federal Competition Authority before 30 April 2020, the (four-week) review period will commence only on 1 May 2020. For Phase II procedures which are pending on 22 March 2020 or which will be initiated on or before 30 April 2020, the (five-months) review period will commence on 1 May 2020.
Merger Control (European Commission).
The Commission encourages to delay merger notifications originally planned until further notice, where possible. We currently understand that this will last for at least two weeks. In addition, the Commission plans to continue accepting paper submissions, but will temporarily also accept electronic submissions.
EU Export Controls.
Implementing Regulation (EU) 2020/402 imposes a license requirement for the export of personal protective equipment from the EU. The license requirement entered into force on 15 March 2020 and will remain into force for at least six weeks.
Adaptions in criminal proceedings and the penitentiary system.
The Federal Minister for Justice will be authorized to issue regulations adapting the Austrian Code of Criminal Procedure (StPO) and the Austrian Penitentiary System Act (StVG) for the duration of the measures to prevent the spread of COVID-19. In criminal proceedings, for example, the local jurisdictions may be adapted more easily, the appeal deadlines are extended (attention: the appeal deadline pursuant to Sec. 294 para. 2 StPO might not be included!) and the visitation rights may be limited to telephone contact only. Furthermore, detention hearings may be suspended and decisions with regard to the possible continuation of pre-trial detention shall be taken in writing within the legal time limits. With regard to the penitentiary system, among other things, the persons infected with COVID-19 and any contact persons shall be considered unfit for detention and contact with the outside world shall be restricted (e.g. contact only by telephone). Also, the time limit for re-entering detention shall be interrupted.
The new “Public Warning System”.
In order to stem the spread of COVID-19 infections, the federal government now is entitled to oblige providers of mobile communication services to send their customers public warnings via SMS with regard to major emergencies and disasters. These warnings are to be transmitted with nationwide or regional restrictions. In order to make this possible in a simplified way, the mobile communication service provider will be allowed to process the necessary master and location data of their customers. The processing of this data is thus justified in accordance with Art. 6 para. 1 lit. c GDPR, as it is necessary for compliance with a legal obligation. However, the above-mentioned data may only be processed to the extent that this is done exclusively for providing targeted information to customers.
Facilitating data protection in communications for health service providers.
Amendments to the Health Telematics Act (GTelG) intended to make it easier for health service providers to communicate with data subjects. The newly created Sec. 27 para. 12b and para. 14 GTelG specify that health data and genetic data may be transferred by e-mail to data subjects or named persons, despite the confidentiality provisions of (already existing) Sec. 6 GTelG. Health and genetic data must be classified as highly sensitive, whose processing therefore according to Art. 32 GDPR requires the highest possible level of security. An unencrypted e mail transmission definitely does not meet this criteria. Although the European legislator provides in Art. 9 para. 4 GDPR that Member States may introduce their own conditions or restrictions for the processing of health data, this only refers to stricter requirements then those requirements already set forth by the GDPR. Due to the primacy of application of European Union law and the European law effect utility, the admissibility of Sec. 27 para. 12b and para. 14a GTelG is more than questionable. Despite these simplifications, health service providers are well advised to send such health and genetic data only encrypted by e-mail using a sufficiently secure procedure.
With the Second Act on COVID-19, the legislator has made numerous legislative changes and enacted some new laws. Your Deloitte or Jank Weiler Operenyi | Deloitte Legal contact person will be happy to answer any questions you may have and can provide comprehensive legal and tax advice from the relevant experts.
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