COVID-19: The main issues that can affect your business
The announced pandemic and epidemiological emergency, together with the extraordinary legal measures taken, have placed many of our clients in the face of the need for unprecedented actions and the necessity to face their consequences.
We have in mind COVID-19 potential impact on your business. Therefore, using the experience of our team, we would like to present you with this informative note drawn up from perspective of Polish law, which contains an indication of the most important issues that cannot be forgotten in running a business today.
Considering the extraordinary and unpredicted situation, all recommendations included in the document are the current and existing possibilities but subject to this dynamic situation any measure, proposal or recommendation may change in the following days. We will keep you updated in case of any change or modification will occur.
It is recommended to implement prevention program containing e.g.:
- clear rules on remote working;
- procedure for isolating an infected employee from the rest of the crew until the relevant services arrive;
- places to which people at risk should not be sent on business trips;
- actions necessary in case of detection of coronavirus infection at the workplace;
- ways to keep the company running even in the absence of large numbers of employees.
Employee rights and obligations:
- an employee cannot refuse performing remote working;
- an employee cannot decide for himself (without prior consent of an employer) to perform remote working;
- right to additional attendance allowance for 14 days – for care of child under 8 years of age (does not count towards the general limit of 60 days for the care of a child under 14 years of age);
- right to refuse to work in an unsafe environment;
- If an employee is stuck abroad (in quarantine or if there is no way to get out) during a business trip - payment of accommodation, diet, etc. at the employer's expense.
Banking and finance
The declaration of an epidemic emergency and the emergency measures and restrictions implemented by the public administration shall not be without impact on the economy, businesses and households. In order to mitigate the negative effects of this situation, banks are working on short and long term solutions to relieve borrowers.
16 March 2020 The Polish Bank Association announced the "Communication on aid measures taken by banks in connection with the coronavirus pandemic COVID 19". According to this communication, the package proposed by the banks includes a number of solutions addressed to both businesses and individuals, including the following:
- The banks shall facilitate the deferral (suspension) of the repayment of interest and capital instalments for a period of 3 months,
- For entrepreneurs who were creditworthy at the end of 2019, and their financing expires in the coming months and have been affected by the effects of coronavirus, banks will renew the existing financing for 6 months,
- No fees will be charged for the motions covered with the above measures, the banks will enable filing those motions without extensive formalities, and remotely,
- Similar rules will be applied by leasing and factoring companies which are within groups of the banks.
As many of entities active on the Polish market are governed by persons not physically present in Poland at the moment, it is advisable to develop contingencies in case declarations must be issued, contracts are expected to be signed or executive decisions of any other kind are necessary.
Because of the travel restrictions, entities active on the Polish market, whose representatives are not physically present in Poland, should consider actions to ensure proper representation. Those may include:
- appointment of proxies in Poland,
- executing agreements by exchange of signed copies,
- obtaining qualified electronic signatures
It must be noted that Poczta Polska, the Polish postal operator suspended accepting international consignments, therefore any powers of attorney, contracts or other documents should be sent by messenger/courier service.
As we are nearing the end of Q1 of 2020, making preparations for the ordinary shareholders’ meeting or general assembly may be advisable. As a rule those should take place in Poland, therefore shareholders may consider for example appointing proxies in Poland or reviewing the bylaws to determine whether participation by electronic means of communication is possible.
A COVID-19 pandemic in a contractual relationship may be classified as force majeure (unusual, external, impossible to prevent event, which is not an ordinary accident) or may exclude liability for non-performance or inadequate performance due to lack of fault.
Therefore, we recommend that you immediately commence gathering all kinds of evidence that could in the future prove the occurrence of force majeure or lack of fault on your part. This consists, among other things, of taking note of your performance, as well as the performance of your contractors, recording why any when any dips in performance or faults occur, in a manner which will allow you in the future to be clear whether or not such events were connected with the current pandemic.
The government is working on special law aimed at alleviation of negative financial consequences of coronavirus for the employers / entrepreneurs (so called ‘protective package’). Respective proposal of amendments to applicable acts is planned to be announced in the coming days.
According to the declarations, the preferences will be available for every single company / entrepreneur suffering negative consequences of coronavirus situation and will include the following:
- individual tax reliefs (details have not been agreed so far and are still discussed);
- postponement or redemption of social security contributions for the period of effective suspension of a company’s activity;
- shorter terms for VAT refunds to the taxpayer;
- postponement in implementation of upcoming formal obligations (standard audit file / registry of beneficial owners).
Public procurement law
The Polish government is working on a support package for companies affected by the outbreak. The discussion includes, among other, the introduction of temporary suspension of contractual penalties connected with the delays in the realization of public procurement contracts.
Implementation of the Act dated March 2, 2020 concerning specific solutions related to the prevention, counteract and combating of COVID-19, other infectious diseases and the crisis situations caused by them (“Special COVID-19 ACT”) allowed to introduce some special suspensions in the applicability of public procurement law and construction law.
In the current state of epidemic threat introduced by the Polish government, the Public Procurement Office declared that an online transmission from bids opening is sufficient to comply with the rule introduced by art. 86 section 2 of public procurement law.