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News

Competencies of Czech state authorities towards Czech companies regarding protection against the spread of coronavirus SARS-CoV-2, after a state of emergency has been declared

19.03.2020
Company: bpv Braun Partners s.r.o.

On 12 March 2020 the Czech government declared a state of emergency (in Czech “nouzový stav”), valid from 12 March 2020, 14 pm, for thirty days (can be prolonged), in line with its competences under the Czech Constitutional Act No. 110/1998 Coll., on security of the Czech Republic, as amended. Additional measures such as home quarantine except for travel from and to the place of employment are in effect as of 16th March 2020.

 

Government Measures related to businesses

The mentioned Act No. 110/1998 Coll. and Czech Act No. 240/2000 Coll., on crisis management, as amended, give large and wide-spread competencies to the Czech government, in particular with the competence to:

a) temporarily limit the right of legal entities (i.e. entrepreneurs) to perform a business activity which would endanger the performed governmental crisis measures or would disturb or void their performance; and or

b) to order legal entities (manufactures, in particular due to the specific subject of its business activity producing medical and pharmaceutical materials) to perform any work duties, assistance or to provide any products or other means to the government.

Orders/ prohibitions imposed by the government/ other authorized public entities in the regime of the state of emergency cannot be appealed. By not following the orders/prohibitions imposed in the regime of the state of emergency, the trespassing person can be subject to sanctions for committing misdemeanors or even criminal acts, depending on the character of the obligation not followed.

Please note that the competency defined above in letter b) is considered as an extreme solution, which would be used particularly if stocks of medical supplies in hospitals would be exhausted or there would be a severe danger. In such a case, the respective state authorities would impose a mandatory production of designated medical supplies to the manufacturers (operating in the field of production of medical supplies), probably for fixed prices. 

Government Measures related to employees

Above that, please note that special measures are in force from 15 March 2020, concerning free movement of public within public areas. The strict quarantine still applies only to concrete individuals. Other individuals shall minimize walking out of their dwellings (except for travels to work, necessary purchases of basic needs, etc.), under the latest government measure announced on 15 March 2020. 

For employees whose employment starts on 15 March 2020 or later:

a) health card according to Section 19 Act No. 258/2000 Coll., Public Health Protection, and

b) medical assessment about job applicant´s fitness under the law 373/2011 Coll. on specific health services

may be replaced by affidavit. 

In addition, there is time limited suspension of the obligation to perform periodic medical examinations.

Finally, the validity of work permits and residence permits and visas issued until 15 March 2020 to persons in employment relationship with job agencies, shall be extended for a period of up to 60 days after termination the state of emergency, provided that they are in force on 15 March 2020. 

Mitigation of economic impacts

To mitigate economic impacts of the governmental measures described above, the government has among others decided to grant a special interest-free loans to small and medium-sized businesses in the total amount of CZK 600 million. From 16 March 2020, all small and medium-sized businesses, whose business activities are influenced by 
government measures related to epidemic of coronavirus, are entitled to apply for a specific loan from the new "COVID Loan" program. 

The respective loan mount from CZK 500,000 up to CZK 15 million shall be provided to individual entrepreneurs by Českomoravská záruční a rozvojová banka, a.s., whereas no interests and fees shall apply. For more please see (available in Czech only): https://www.cmzrb.cz/podnikatele/uvery/uver-covid/ 

In this relation, the Ministry of Finance has also presented a several tax relief measures (e.g. later submission of the tax return), however their final form has not been officially introduced yet.

Recommendations

The measures which can be taken by the Czech state authorities in the fights against the epidemic of coronavirus are broad and defense against them is quite limited. In order to minimize the chance that such measures would even be necessary, we would recommend to our clients:

a) to fully respect the quarantines if imposed on its Czech employees

b) to agree upon work from home/home office with employees if their work charge/ position enables it and if this seems an appropriate measure;

c) to avoid contact of large groups of employees and to postpone any non-mandatory gatherings/ trainings, if possible and appropriate, in order to limit the epidemic potential;

d) to consider timely loan application, before the government funds earmarked under special loan program are exhausted. 

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