Cyprus: Guide On The Extraordinary Measures For The Restriction Of The Proliferation Of Covid-19 To Businesses And Labour Relations (updated, September 2020)

Full Suspension of Operations

Companies the operations of which were mandatorily suspended, pursuant to the pertinent Decisions of the Council of Ministers and decrees of the Minister of Health may benefit from the Full Suspension of Operations Scheme, pursuant to which 90% of the employees may benefit temporarily from the special unemployment benefit (which is equal to 60% of the regular salary, subject to a minimum of Euro 360 and a maximum benefit of Euro 1.214) until the business ensues and they may return to work. 10% of the employees, including directors-shareholders, partners that hold more than 20% of the share capital, general managers and managerial staff shall not be entitled to this benefit; if this category of employees exceeds 10% of the personnel, some may be eligible for the benefit. Further, in case that the business employs 9 employees or fewer, all employees shall be entitled to this benefit.

It is provided that no employees must have been terminated as of 01.03.2020, in order to be eligible for this Scheme, and must not terminate any employees, on economic/financial grounds, during the period of participation in the Scheme until December 2020. The employer may still terminate on the following grounds: conduct rendering the employee subject to summary dismissal, and conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue, commission of a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules.

Please note that businesses the operations of which have been suspended, pursuant to the said decrees, still have the ability to perform administrative tasks necessary to the business.

This Scheme is in effect until 31.10.2020.

Businesses in Specific Economic Activities Scheme

This Scheme concerns companies that have suffered a loss of turnover beyond 40% in the period 13.06.2020 - 30.06.2020, in comparison to the same period in 2019, and the loss is precisely because of the Covid-19 pandemic (if the business did not operate last year, the comparison will be with the period preceding the relevant reference period but not taking into account any loss of turnover from 16.03.2020 onwards). Some categories of businesses, exhaustively listed in the relevant decree, cannot benefit from this Scheme, such as supermarkets, utility providers, doctors, retail sector etc,

Where the business employs up to three employees, a special unemployment benefit equal to 60% of the salary (subject to a minimum of Euro 360 and a maximum of Euro 1.214 for an employee per one-month period) shall be granted to up to 100% of the employees, and if the business employs more than three employees, up to 50% of the employees may be granted the benefit. It is provided that directors-shareholders, partners that hold more than 20% of the share capital, general managers and managerial staff shall not be entitled to the abovementioned benefit, where they belong to the 50% of the employees for whom the benefit shall not be granted.

The employer is not obliged to pay any salary to persons that receive the special benefit, unless the employee continues working in which case the employer must complement the salary along with the relevant contributions to the Social Insurance Fund.

It is also provided that no employees must have been terminated as of 01.03.2020, in order to be eligible for this Scheme, and must not terminate any employees, on economic/financial grounds, during the period of participation in the Scheme until December 2020. The employer may still terminate on the following grounds: conduct rendering the employee subject to summary dismissal, and conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue, commission of a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules.

This Scheme is in effect until 31.10.2020.

Hotel Units and Tourist Accommodation Scheme

Any hotel or tourist accommodation can be included in this Scheme provided that it has not re-operated or has or projects a 40% loss of turnover in comparison to the corresponding period of last year and the loss is exclusively related to the situation arising from the Covid-19 pandemic; in case the company did not operate during the previous year, then the comparison will be made with the period preceding the relevant reference period, without taking into account any loss of turnover from 16.03.2020 onwards.

A basic obligation of hotel units and tourist accommodation taking part in this Scheme is to provide attractive offers to attract domestic tourism, in cooperation with the Deputy Ministry of Tourism, which is tasked with examining these throughout the term of the Scheme.

? special unemployment benefit equal to 60% of the salary (subject to a minimum of Euro 360 and a maximum of Euro 1.214 for an employee per one-month period) shall be granted to up to 80% of the employee?t is provided that directors-shareholders, partners that hold more than 20% of the share capital, general managers managerial staff and the higher-paid staff in order shall not be entitled to the abovementioned benefit, where they belong to the 20% of the employees for whom the benefit shall not be granted.

The employer is not obliged to pay any salary to persons that receive the special benefit, unless the employee continues working in which case the employer must complement the salary along with the relevant contributions to the Social Insurance Fund.

It is also provided that no employees must have been terminated as of 01.03.2020, in order to be eligible for this Scheme, and must not terminate any employees, on economic/financial grounds, during the period of participation in the Scheme until December 2020. The employer may still terminate on the following grounds: conduct rendering the employee subject to summary dismissal, and conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue, commission of a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules.

This Scheme is in effect until 31.10.2020.

Economic Activities related to the Tourist Industry or Economic Activities affected directly by Tourism or Economic Activities connected with Businesses under Mandatory Full Suspension Scheme

This Scheme concerns any business (i) whose economic activity is related to the tourist industry, or (ii) carries out economic activity directly affected by tourism, or (ii) carries out economic activity associated with a business which is subject to mandatory full suspension, in accordance with the most recent Decrees of the Ministry of Health and/or the relevant Decisions of the Council of Ministers, provided that it has or projects a loss of turnover exceeding 40% compared to the corresponding period of the previous year and the loss of turnover is due exclusively to the situation of their business because of the Covid-19 pandemic (If the company did not operate in the previous year, then the comparison will be made with a period preceding the relevant reference period, not taking into account any loss of turnover in the period from 16.03.2020 onwards. The undertaking shall be deemed to be affiliated with the said economic activities under the condition that the turnover is due at least 40% to such economic activities.

Where the business re-operates and employs up to three employees, a special unemployment benefit equal to 60% of the salary (subject to a minimum of Euro 360 and a maximum of Euro 1.214 for an employee per one-month period) shall be granted to up to 100% of the employees, and if the business re-operates and employs more than three employees, up to 65% of the employees may be granted the benefit; in cases of businesses that shall not re-operate, up to 80% of the employees may be granted the benefit. It is provided that directors-shareholders, partners that hold more than 20% of the share capital, general managers and managerial staff shall not be entitled to the abovementioned benefit, where they belong to the 35% or 20% of the employees for whom the benefit shall not be granted (not applicable to businesses with up to three employees).

The employer is not obliged to pay any salary to persons that receive the special benefit, unless the employee continues working in which case the employer must complement the salary along with the relevant contributions to the Social Insurance Fund.

It is also provided that no employees must have been terminated as of 01.03.2020, in order to be eligible for this Scheme, and must not terminate any employees, on economic/financial grounds, during the period of participation in the Scheme until December 2020. The employer may still terminate on the following grounds: conduct rendering the employee subject to summary dismissal, and conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue, commission of a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules.

This Scheme is in effect until 31.10.2020.

Specific Categories of Self-Employed Persons Scheme

This Scheme concerns self-employed persons that are not employers and are registered with the Social Insurance Services as either photographers, rental car owners, tour guides, taxi drivers, tourist bus drivers, street food sellers, or street sellers, provided that they have or project a loss of turnover exceeding 40% compared to the corresponding period of the previous year and the loss of turnover is due exclusively to the situation of their business because of the Covid-19 pandemic (If they were not self-employed in the previous year, then the comparison will be made with a period preceding the reference period, not taking into account any loss of turnover in the period from 16.03.2020 onwards).

The special benefit will be equal to 60% of the insurable income, subject to a minimum of Euro 300 and a maximum of Euro 900 per four-week period.

This Scheme is in effect until 31.10.2020.

Special unemployed persons' support allowance

Persons registered as regular unemployed persons that have exhausted their right for payment in February, March, April, May, or June 2020 are entitled to a special allowance of Euro 500 per month until 31.10.2020.

Small and Very Small Enterprises and Self-Employed Persons Subsidy Scheme

This Scheme applies to businesses and self-employed persons that employ up to 50 persons, which partially or wholly suspended their operations and which enrolled in the fiscal support schemes of the Ministry of Labour, Welfare and Social Insurance for the period 13.04.2020 - 12.05.2020. Beneficiaries are entitled to one-time grants as follows: for employing up to one person, Euro 1.250; from two to five people, Euro 3.000; six to nine people, Euro 4,000; 10 to 50 people, Euro 6.000.

It is also provided that no employees must have been terminated as of 01.03.2020, in order to be eligible for this Scheme, and must not terminate any employees, on economic/financial grounds, during the period of participation in the Scheme until December 2020. The employer may still terminate on the following grounds: conduct rendering the employee subject to summary dismissal, and conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue, commission of a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules.

Tourism and aviation sector

The government has allocated in total Euro 15.7 million in incentive schemes for the tourism and aviation sectors for year 2020, including credit, as well as subsidies, for flights to Cyprus, and a further Euro 10 million for joint advertising with tourist agents promoting Cyprus as a safe tourist destination, both in the summer and winter.

Department of the Registrar of Companies and Official Receiver

The Department has announced the below measures to assist liquidity of Cyprus-registered companies:

· Suspension until January 2021 of the publication in the Official Gazette of the Republic of the quarterly notice prior to deregistration of companies not complying with their obligations to the Department;

· Extension of the obligation to pay the annual levy of Euro 350 to 31.12.2020;

· Extension of the obligation to submit the Annual Report to 28.01.2021; and

· Extension of the imposition of a charge for late submission of statutory forms to the Department to early 2021.

On 23.06.2020, the VAT was reduced to 5% for the following services: (a) hotel/tourist stays, (b) restaurant and catering services, and (c) taxi and tourist bus transfers,

Extension of deadline for submission of tax returns for employees to the end of October 2020.

Penalty

Write-offs

Write-off of penalties for not submitting tax returns in time for the period that ended on 10.04.2020 and 10.05.2020

Suspension of instalments

Suspension of payments of instalments and interest for loans to financial institutions (including loan management companies, insurance companies and the Cyprus Land Development Corporation) for a period of nine (9) months, until 31.12.2020, including business, natural persons and self-employed persons that have been consistent with their obligations (after written request to the financial institution). Companies and self-employed persons may also, by written request, be exempt from the obligation to submit financial statements to financial institutions for the year 2019.

Pan-European Guarantees

Participation of the Republic of Cyprus to the Pan-European Guarantee Fund with a contribution of Euro 32.5 million in the form of government guarantees.

European Investment Bank

Cyprus Government guarantees of Euro 500 million in total to the European Investment Bank for the provision of low-interest loans to Cypriot small- and medium-sized enterprises with up to 3.000 employees.

Cyprus Entrepreneurship Fund

Businesses with up to 250 employees may benefit with a low-interest loan of up to Euro 1.5 million, with a maturity of up to 12 years, through the Cyprus Entrepreneurship Fund, where the loan is co-financed by the Government and the Credit Institutions that take part in this Scheme (50% – 50%). The Government has taken a loan of Euro 400 million to cover its 50% part from the European Investment Bank.

For undertakings that use this Scheme, as well as the Subsidised Interest Scheme, it is provided that they may not terminate more than 2% of the employees, excluding the following cases: conduct rendering the employee subject to summary dismissal, and conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue, commission of a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules

Business Loan Subsidised Interest Scheme

This Scheme covers businesses as well as self-employed people who are cash-strapped due to the pandemic. It relates to loans granted, or to be granted, from 01.03.2020 - 01.12.2020 (subject to certain restrictions as to the maximum loan allowed). These loans cannot be used to cover existing performing or non-performing credit facilities or otherwise loan restructuring.

Valid for four years, the Scheme breaks down as follows: during the first two years the interest rate will be subsidised to up to 3.5%; for the third and fourth years, the subsidy will be at 2% for small- and medium-sized enterprises and 1.5% for large corporates. The maximum interest rate limit for the total of the loan cannot exceed 4.25%,

For undertakings that use this Scheme, it is provided that they may not terminate more than 2% of the employees, excluding the following cases: conduct rendering the employee subject to summary dismissal, and conduct making it clear that the relationship between employer and employee cannot reasonably be expected to continue, commission of a serious disciplinary or criminal offence, indecent behaviour, or repeated violation or ignorance of employment rules

This Scheme relates to mortgage loans granted, or to be granted, between 01.03.2020 - 01.12.2020, of up to Euro 300.000, with a maximum interest rate for the total loan at 2.3%. Valid for four years, the Scheme may subsidise up to 1.5% of the interest. These loans cannot be used to cover existing performing or non-performing house loans.

Evaluation and risk assessment

Employers have the statutory obligation to continuously evaluate the employment environment and undertake the necessary actions in view of possible risks, including the proliferation of the coronavirus SARS-CoV-2. Particular focus should be given to pregnant employees, persons with disabilities or particular health issues, persons over the age of 60, and other higher-risk groups. To this effect, the necessary measures must be taken with a view to securing health and safety at work. For example, free and abundant provision of antiseptics, antibacterial cleansers, disinfectants and alike products in the workplace, as well as regular cleaning and disinfecting of the workplace.

In addition, the provision of the technical capacity and facilities to work remotely and meet virtually (e.g. videoconferencing), rather than physically, wherever possible, are measures that should be explored by businesses.

There is also a pertinent announcement of the Ministry of Health to this effect, which suggests that the number of persons in each workplace, including both employees and clients that may be visiting, must be such that it ensures a minimum of 8 sq.m. for each person and a secure distance of 2 metres should be kept between persons.

Prohibition of entry

Employers should not allow persons found positive to the coronavirus SARS-CoV-2 or have come into contact with a confirmed case or have travelled abroad in the last fourteen days, regardless of destination, to enter the workplace, pursuant to the latest directions of the Ministry of Health. These persons shall be entitled to sickness benefit from the Social Insurance Fund.

In addition, employers may deny entry to personnel that may have been infected, to protect the health and safety of the rest of the personnel, and request of the employee to work from home and undertake all necessary medical examinations.

Reasonable adjustments

Our suggestion is for employers to follow the most stringent and conservative of measures and guidance issued by the Ministries of Health, of Foreign Affairs and of Labour, Welfare and Social Insurance, as well as the World Health Organisation.

Employers should make all reasonable adjustments, as required, to safeguard vulnerable employees, and regular updates and guidelines should be communicated to the workforce, particularly in cases where the physical presence of the employee is required in the workplace. Preferably, a specific person with a responsible position should be chosen as a focal point within the company to communicate to the workforce all matters concerning containment, health and welfare, as well as matters concerning remuneration, given the disruption to business operations and given the fact that a number of employees may be temporarily suspended from employment or may be requested to take out leave, as long as the business disruption persists.

A competent individual within the firm may also be tasked with ensuring compliance with company health and safety policies and liaising with the competent public health authorities for further guidance, particularly in cases of incidents or suspected incidents of infection in the workplace.

Flexible and remote working conditions, including working from home and/or flexible working hours allowing staff to travel out of rush hour, wherever possible, are the most recommended of measures to maximise temporary social distancing, as far as the current situation continues, as well as minimising business travel and limiting visitors to the workplace.

Other HR considerations

Employers should keep regular contact with their employees and communicate to them regularly company policy in the present extraordinary situation, as well as the relevant Business Continuity Plan.

Employers may ideally cross-train and create cross-disciplinary teams (particularly with members from the practice areas where workload is expected to increase, such as tax, employment, regulatory compliance, immigration, data protection and technology)

It should also be clarified that people working remotely and people with whom annual paid leave has been agreed are distinct and their situations considered accordingly. In particular, people working remotely may be considered as available for communication, at least during the agreed office hours, as usual, while persons on agreed annual leave must be treated as such.

A Business Continuity Plan should be issued the soonest (if not already prepared) and the possibility that some employees may get infected or may have already gotten infected should also be taken into account as part of the Plan; equally, it is possible that persons already infected and treated may in fact be re-infected, since the precise extent and/or time period of immunity to SARS-CoV-2 after treatment is still unknown.

Termination of employees should be treated as a measure of last resort, given that a termination under the present circumstances may cause reputational damage and may even be viewed unfavourably by a court in case that the lawfulness of the dismissal is under question. Alternatives should first be explored, such as striking an agreement with employees for temporary wage reduction, reduction in number of hours, working on a rotational basis, and taking out accrued untaken annual leave. Equally, the abovementioned state support schemes should be considered.

In case that a business proceeds with redundancies, they should make sure to follow a fair redundancy process and they are advised to follow the seniority principle and to make redundant employees only in sectors of the business that have indeed been affected in order to avert risk of liability in damages for unfair dismissal. If the business will proceed with a collective redundancy, it should consult its legal advisors for the necessary information and consultation requirements.

Confidentiality

The right to private life is a constitutional right, but it may be qualified in cases of public health considerations. Equally, the European Data Protection Board in its recent guidelines states that data protection rules, such as GDPR, do not hinder measures taken in the fight against the coronavirus pandemic. However, the data controller must ensure the protection of the personal data of the data subjects and, in particular, personal medical data must always be treated cautiously and not disseminated to a larger number of people than absolutely necessary.

Therefore, a number of considerations should be taken into account to guarantee the lawful processing of personal data, including health data, such as information collected through temperature check of an employee or a visitor. Recording of such sensitive data (special categories of personal data) is prohibited as a rule, unless one of the legal grounds provided in Article 9(2) of the General Data Protection Regulation (GDPR) can be demonstrated. It is possible that the lawfulness of a temperature check policy may come on the basis that processing is necessary for employment, social security and social protection law obligations, such as securing a healthy and safe working environment, for the purposes of preventive or occupational medicine, for the assessment of the working capacity of an employee, or because processing is necessary for reasons of public interest in the area of public health, such as protecting against serious cross-border threats to health. Of course, basic principles always need to be complied with, including necessity and proportionality.

It is advisable to regularly follow the latest national, EU and WHO medical guidance, in order to decide on such matters of privacy and, at the same time, advise employees that exhibit symptoms, or if any other persons in their household do, to stay home and undertake testing the soonest. In addition, implementing enhanced cleaning and hygiene policies may achieve the same objective without being intrusive.

Regardless of the decisions taken pertaining to privacy concerning the coronavirus SARS-CoV-2 matter, businesses should strictly follow storage limitation and integrity and confidentiality obligations, as well as communicating the pertinent policy to employees, visitors and any other data subjects (depending on the categories of data subjects whose health data is processed).

Data integrity

Given the shift to teleworking for many business, companies should look into the matters of adequacy of IT infrastructure, software licensing, bandwidth, and clear communication of company policy to the personnel as to the obligations of the employees for use of the equipment solely for professional purposes, confidentiality obligations to clients, data security, and restriction of local storage and hard copying facility, in order to minimise the risk of data breaches. In addition, password protection of communications and work product is highly recommended.

Cybersecurity

Personnel should be provided with clear guidance on authentication and secure access process and additional checks should be implemented concerning financial transactions, such as verification from two sources (e.g. e-mail and follow-up phone call). Businesses should also be aware of increased activity in spam emails intended to breach security on the pretext of providing "further information" on SARS-CoV-2.