The latest government measures in SELA-covered jurisdictions regarding the COVID-19 pandemics and its effect on companies operating in SEE region.

This report provides up-to-date information on labor law issues (employers’ obligations regarding the safety and health of its employees), the measures of the state to support the economy, and on contractual issues (delays in fulfilment or non-fulfilment of contractual obligations due to Coronavirus).


Labor law issues

Due to the situation caused by the COVID-19 pandemic, the Government has ordered a number of non-essential services (bars, restaurants, shopping malls, retail stores – other than alimentary stores and pharmacies) to be closed.

Other businesses remained in operation, and by the end of April the Government has started to reduce the list of closed businesses. However, due to the restrictions in the public transport the transport of persons has been severely restricted.

The transport of goods is allowed, but under specific permits issued by the police, which have been difficult to obtain for many businesses.

Additionally, the Government has issued curfew orders, restricting the ability of citizens to freely circulate in the city only between 5:00 – 13:00. Further restrictions to free circulation during this allowed time frame were introduced, by requiring citizens to apply for ad hoc e-permits that allowed movement for 1 hour to attend essential needs.

Employees could walk to work only between 5:00 – 13:00.

On April 24th, curfew hours have been extended from 5:00 – 17:30, and it is also possible to drive to work during this time frame, subject to weekly ad hoc e-permits.

As such, both employers and employees are facing significant pressure and the working day has been severely restricted.

The Government expected the employers to continue paying salaries under normal conditions, and for such purpose, it promised to issue a sovereign guarantee for loans to be granted to businesses that are objectively unable to pay salaries for their employees.

However, businesses that have seen their activity severely disrupted or shut-down due to the restriction measures taken in relation to the COVID – 19 pandemic did not see this only as a cash flow problem that may be bridged through loans, but as severe risk of going concern due to uncertainties on time and market conditions after the emergency has passed. Many businesses considered firing the employees or even liquidating.

On the legal side, the Albanian labour code (art. 129) obliges the employer to continue paying his employees also if there is no business due to circumstances out of the employers’ control. However, under art. 129(4) this obligation does not apply in case of business interruption due to force majeure circumstances.

On 27 March 2020, the Government approved a monthly financial aid equal to the minimal salary at national level, of ALL 26,000 (or USD 260 approx.) for small business (small business refers to businesses with annual turnover of up to ALL 14 million – or USD 140 thousand approx.), self-employed or employees of small businesses that were ordered to shut down due to the COVID–19 out-break. The aid was not made available to those self-employed / employees that for 2019 had an annual salary / personal income in excess of ALL 2 million (or USD 20 thousand approx.).

On 16 April 2020, the Government approved a one- off financial aid payment equal ALL 40,000 (or USD 400 approx.) for:

  • small business self-employed or employees of small businesses (that were not ordered to shut down due to the COVID – 19 out-break. This aid is not available to those self-employed / employees of small businesses performing alimentary of pharmacy activities, as well as some professional services, such as lawyers, notaries, doctors, architects etc.
  • employees of businesses, other than small businesses, that were ordered to shut down due to the COVID – 19 out-break;
  • employees of businesses, other than small businesses, that despite not being ordered to shut down due to the COVID – 19 out-break, were laid off until the 10 of April 2020;
  • employees of businesses in the tourism sector, operating accommodation units only

Contractual issues

As mentioned, the COVID-19 pandemic situation has caused a number of businesses to be shut- down by the order of the Government. Additionally, other businesses that are formally in operation are facing severe due to Government-imposed restrictions on transport and individual circulation. Consequently, many businesses are currently unable, in full or in part, to meet their contractual commitments.

The Albanian civil code does not explicitly define “force majeure”. However, as a general consideration, art. 476 of the Albanian civil code provides that a party in breach of its contractual obligations shall be labile to compensate the damage caused to the other party, unless he proves that the failure to perform the obligation was not due to his fault.

Additionally, different types of typical contracts provide for specific consequences and remedies in cases of impossibility to perform due to circumstances out of the control of the parties.

Therefore, unless the relevant contract contains specific provisions on force majeure, the party unable to perform due to the COVID-19 pandemic situation may invoke exemption from damage compensation liability on the basis of art. 476 of the civil code (as well as under other more specific impossibility provisions for that type of contract, if any is available under the civil code).

However, businesses must be very careful in invoking exemption from liability due to force majeure, as the mentioned provisos of the civil code will offer safeguards only for failures to perform which are directly and immediately caused by the relevant event.

For example, a business that has been ordered by the Government to shut-down will be entitled to claim the exemption in full from damage compensation due to failure to perform, while a business that is facing difficulties due to restrictions will be only able to claim the exemption for delays, but is still required to perform.

Additionally, the nature of contractual performance is also relevant, and in general, providers of intellectual services (advisory services, IT and other similar services that may be performed remotely) will face limitations to their ability to claim damage compensation exemption for failure to perform, due to the current restrictions.

Finally, as long as the payment systems are in operation, business would not be able to claim damage compensation exemption for failure to make payments, as long as an insolvency filing has not been made.

As regards the contract continuation, unless the relevant contract contains specific prolonged force majeure termination provisions (or there are specific civil code termination provisions for that type of contract) each of the parties may invoke article 488 of the Albanian civil code. Under this article, if in a contract of mutual obligations, the execution of the obligation of a party is made impossible by no fault of either party, then none of them has the right to demand damage compensation, but each of them has the right to demand from the other party to return what was given for the execution of the obligation, which would cause the extinguishment of the contractual relation.

On 2 April 2020, the the Government ordered a blanket stand still for a two-month period (April and May 2020) on the payment of rents by small businesses that were ordered to shut down due to the COVID – 19 out-break. The same applied for residential tenants as well. The rent for this two-month period is to be later paid by instalments, based on the agreement with the landlords.

On 2 April 2020 this two-month stand still on rent payments was extended to all small businesses, irrespective if they were ordered to shut down, or not, due to the COVID–19 outbreak.

These orders raised controversy as to their compliance with constitutional principles. It is to be noted that these orders, together with the legality of other restrictions taken by the Albanian Government becomes even more problematic in light of the suspension of judicial activities in the country.

Suspension of judicial activities

On 25 March 2020, the Government ordered the suspension (until further notice – i.e. during the duration of the state of the epidemic caused by the spread of COVID-19) of all judicial activities in front of the court system and prosecutors´ offices, with the exception of urgent matters, such as criminal or family matters.

During the suspension period, deadlines for filing lawsuits, filing complaints, and conducting any procedural actions in administrative, civil and criminal matters are suspended.

When deadlines begin during the suspension period, they are postponed until the end of the epidemic situation.

A similar order has been issued by the Government on 02.04.2020 for the suspension of enforcement procedures by bailiffs.

It has been rumored that court activity will resume by 27 April 2020, but there is still no published act to this end.

Government support to the economy

The Albanian Government has pledged a number of financial measures to fight the impact of the COVID-19 pandemic in the economy. The pledged measures include:

  • ALL 2.5 billion, or USD 25 million approx., financial support for the Ministry of Health, for medical equipment and materials or support of medical staff;
  • ALL 10 billion, or USD 100 million approx., sovereign guarantee for loans to be granted to businesses that are objectively unable to pay salaries for their employees;
  • ALL 6.5 billion, or USD 65 million approx., financial support (exact measures to be still clarified) for most immediate needs of: most vulnerable members of society, small business, support for unemployment.
  • ALL 2 billion, or USD 20 million approx., financial support to the Ministry of Defence for Humanitarian Operations;
  • ALL 1 billion, USD $ 10 million approx., as a reserve fund to the Council of Ministers for any unforeseen emergencies.

Additionally, the Government has promised that:

  1. late payment interest for overdue payment of electricity bills by active customers (category families and small business) will be erased, with a financial impacts estimated at ALL 15 billion, or USD 150 million approx.
  2. profit tax will be rescheduled for the second semester of 2020 and on, for businesses with an annual turnover between ALL 2 million – ALL 14 million, or USD 20 thousand to 140 thousand approx.
  3. the deadline for the submission of balance sheets to tax authorities will be postponed until the 1st of June 2020 (the current deadline expires by end of March).

The Government and the Bank of Albania have also issued a joint order to lending institutions, for the deferral of 3 months for loan instalments due between March 13 2020 and until May 31 2020, for those borrowers (both individuals and business) whose financial situation is deteriorating from the current situation caused by the COVID -19 pandemic.

The deferral is however not automatic, but based on the application of the borrow and the credit analysis, to be made by lenders within 3 days of the receipt of a deferral application.

Bosnia & Herzegovina


Bosnia and Herzegovina is composed of two self-governed entities, Federation of Bosnia and Herzegovina (“FBH”) and Republika Srpska (“RS”) and one district – Brčko District of Bosnia and Herzegovina (“Brcko District”). The matters regulated on the level of Bosnia and Herzegovina apply to the whole territory of the state.

The matters not conferred to Bosnia and Herzegovina are regulated on the level of the entities and district. Therefore, the legislation in Bosnia and Herzegovina may be adopted on different. In this case, the relevant legislation has been enacted mostly on the entities’ level and is subject to the regulatory regime on the entities’ level.

Labor law issues

As employers in B&H are facing serious issues related to business activities, starting from total cessation of business activities to its reduction to a minimum level, different employment issues arise.


The Republican Emergency Stab issued a Conclusion on restriction and prohibition of movement of persons in the RS which prohibits the movement on the territory of the RS to all persons in public areas from 8pm to 5am save for employees that are supplied with permit for movement regarding their work process, and a conclusion ordering, for the purpose of monitoring the performance of drivers in international carriage of goods in a declared emergency situation, employers based in the RS to issue a certificate of engagement of drivers in the international carriage of goods during an emergency.

Later, the Republican Emergency Stab adopted a decision on ban of leaving the place of residence in the weekends, save persons that are supplied with permit for movement regarding their work process. The same applies for movements in Tuesdays and Fridays from 7 am to 10 am (since in that period only persons who are elder than 65 are allowed to move).

1. Safety and health
Employers are obliged to continuously implement all the recommended measures of the Institute of Public Health regarding the disinfection of its facilities, surfaces and means of transport.

They are advised to organize work from home where feasible, to reduce their working hours and to minimize activities that are not essential for business nowadays.

Due to the state of emergency, it is deemed that a decision of the employer in writing or explicit employer’s instructions in other form should be considered acceptable. It should be noted that employers are not obliged to provide employees to work from home, if a request for such work is submitted by the employee.

Employees who are absent from work due to the implementation of the prescribed measure of mandatory isolation as a carrier or due to the occurrence of an infectious disease in their environment are considered temporarily incapable of working (on sick leave) and are entitled to salary compensation. The same applies to employees who are temporarily unable to work because they are positive on the COVID 19 virus test.

2. Employment issues
Employers whose business activities ceased or decreased in the volume or facing reasons of economic or technical nature are entitled to send employees to paid leave during which time employees receive salary in the amount of 50% of the salary that employees would have earned.

Employers may decide to provide employees with full compensation of salary at their own discretion.

Depending on the possibilities of the employer, employer may consider amendments of terms of employment including:

  • Switching to part-time work
  • Assignment of employees to other employer
  • Termination of employment.

At the moment, the current situation does not imply immediately termination of employment as a measure to which employers should reach out and it is strongly advised to reach out for other measures to save work positions.

Considering all these issues, RS authorities adopted some measures to mitigate a difficult position of employers who pursuant the decisions of the competent crisis staff, did not operate their business, which include covering certain employers’ expenditures from budgetary resources such as:

  • payment of taxes and contributions for employees from the Solidarity Fund for March
  • payment of the minimum salary and contributions for employees for April.


The Federal Civil Protection Stab issued an order on ban of the movement of citizens in the FBH from 8pm to 5am. Employees are allowed to move in this period only if they are supplied with permit for movement regarding their work process.

FBH does not recognize the possibility of a paid leave of employees, which leaves employers with a smaller range of options.

Currently, until employers take steps on amendments of terms of employment listed above, employees should be entitled to a full compensation of salary.

In addition, the government issued recommendations for employers and employees:

  • Employees should be allowed to take annual leave, and to use leave in accordance with regulations
  • Employees who are parents of young children under 10 should be allowed one parent’s leave
  • Cancel meetings with more participants.

The Federal Civil Protection Stab issued an Order to the Cantonal Health Crisis Staffs to redistribute working hours, health employees, health associates and other employees in health institutions. Employees who are absent from work because they are isolated as carriers or due to the occurrence of infections in their surroundings are considered temporarily incapable of working (on sick leave) and are entitled to salary compensation. The same applies to employees who are temporarily unable to work because they are positive on the COVID 19 virus test.

Regarding that, The Federal Ministry of Health has issued a Guideline on the regulation of temporary work disability, with detailed explanations for regulating temporary disability to work.

Contractual issues

In the light of recent coronavirus outbreak and adoption of series of measures imposed by competent authorities in order to prevent negative effects of this outbreak, companies and entrepreneurs may be prevented from fulfilling their contractual obligations in full, in part or in contractually agreed terms.

In order to mitigate the legal consequences that may result from a breach of a contract (e.g. indemnification requests), it is advisable to perform the following:

3. Classic commercial contracts (trade with goods and services)

  • To analyze contractual clauses on force majeure (lat. Vis maior, local language. Viša sila). As a rule, a contracting party is not liable for damages if it proves that it could not: (i) fulfil its obligations or it delays with a fulfilment due to circumstances that arose after the conclusion of the contract; and (ii) prevent, eliminate or avoid these circumstances. The law does not recognize the legal definition of the force majeure, but commercial contracts often contain force majeure clauses. When contracts do not contain these clauses, there are laws, regulations and general rules of the law of obligations, which applies in these cases (changed circumstances, inability to fulfil obligation, general rules on liability for performance of obligations, etc.). However, it is important to know that, by law, a contracting party calling for the release of its liability by force majeure should prove this in the event of a dispute. In this respect it will be necessary to prove all of the following: (i) that circumstances which prevent the performance of the contractual obligation or which delay the performance of the obligation occurred after the conclusion of the contract and (ii) respective circumstances could not have been prevented, remedied or avoided
  • To consider the obligation to inform the other party of the facts that have an impact on the contractual relationship. As a rule, each contracting party is obliged to inform the other party in a timely manner of the facts affecting the contractual relationship. Breach of this obligation entitles the other party to compensation for the damage it has suffered as a result of failure to notify or untimely notify
  • To analyze the clauses of the insurance contract and consider the obligation or need to communicate with the insurance companies. When it comes to property insurance, the insurance contractor is obliged to inform the insurance company of any change in circumstances that may be relevant to the risk assessment. Further, as a rule, the insured party is obliged to inform the insurance company of the occurrence of the insured event within three days from the day when he/she learned that the insured event occurred (this does not apply to life insurance and other specific types of insurance);
  • To analyze the possibility of obtaining appropriate certificates of force majeure from the competent authorities in BiH. According to informal information from the RS Chamber of Commerce: (i) business entities may request in writing that the RS Chamber of Commerce issue a certificate of force majeure; (ii) these force majeure certificates are public deeds and serve as evidence of the inability (in full or in part) of the performance of contractual obligations. Furthermore, the Foreign Trade Chamber of BiH also issues a certificate of force majeure where such certificate enables the affected business entity to prove to its business partners its inability to perform contractual obligations due to the occurrence of objective reasons that could not be remedied or predicted. Moreover, the interpretation of Foreign Trade Chamber of BiH is that such certificate could temporarily or permanently invalidate contractual obligation of affected business entity. However, it should be emphasized that business entities cannot rely on these certificates as deeds that will fully or partially release them of their respective contractual liability in a potential court proceeding. Finally, the FBiH Chamber of Commerce informally confirms that they do not issue such certificates because, according to their informal interpretation, the occurrence of the effects caused by the infection of the coronavirus does not result in the occurrence of force majeure
  • To analyze contractual clauses re liability for contract performance. As a rule, the liability of the contracting party may be extended beyond statutory defined frames. On the other hand, the contract may also narrow the liability of the contracting party – e.g. by stipulating the maximum amount of compensation that the breaching party will be obliged to pay to the other contracting party for damages. Accordingly, in order to properly determine the situation, it is necessary to consider in particular the extent to which the legal provisions and the provisions of a particular contract, favor or harm defaulting party;
  • Analyze the possibility of termination or amendment of the contract due to changed circumstances (lat. Rebus Sic Stantibus). Circumstances that make it difficult for one contracting party to fulfil an obligation that occur after the conclusion of the contract may be grounds for termination or modification of the contract. In such a case, the party who has difficulty in fulfilling the contract may propose to the other party to modify or terminate the contract due to these circumstances or to seek judicial termination of the contract.
  • To analyze the possibility of termination of the contract due to the complete inability to fulfil the obligation. As a rule, when the fulfilment of an obligation of one party becomes impossible due to an event for which neither party is responsible, then the entire contract ceases to exist. It should be noted that the contracting party who has completed something previously given based on the contract, has the right to request the appropriate return of the completed / given one. If a contractual obligation cannot be fulfilled only partially because of an event for which neither party is responsible, then the other party expecting the performance of that obligation has the right to terminate the contract provided that it proves that this partial failure does not meet its needs. Otherwise, if the contract still remains in force, the other party, which receives only partial fulfilment, has the right to request for its obligation to be reduced proportionally.

4. Merger and acquisition contracts (M&A contracts)

  • To analyze the contractual clauses governing the consequences of material adverse events (MAC provisions). In practice, the MAC Provisions authorize the buyer to terminate the M&A contract if, in the period between the conclusion of the contract and the fulfilment of all conditions defined in the contract, occurs a materially negative event defined by the contract. For instance, a buyer may terminate M&A contract  if, before the full payment of reimbursement is due, the turnover of the target company falls more than 20% from its current turnover. In this respect, it is necessary to analyze whether the present disturbances and changed circumstances resulting from the outbreak of the coronavirus can trigger the application of contracted MAC provisions. On the other hand, when drafting new M&A contracts, special attention should be paid on the consequences of an outbreak of coronavirus infection as well as the effects of measures taken by the competent authorities to restrain this infection
  • To analyze clauses stipulating sellers warranties. With respect to the already concluded M&A contracts, it is necessary to analyze the provisions of the seller’s warranties and examine to what extent the current situation regarding the infection of the coronavirus will affect compliance with these warranties and whether due to the inability to respect these warranties customers will be entitled for damages. With respect to new M&A contracts, sellers should insist on provisions that limit or exclude the seller’s liability for the negative consequences of the acquisition of the target company and the consequences resulting from the outbreak of the coronavirus (e.g. this can be done by referring to generally known facts what a buyer had to be aware of, changes in the regulations that the buyer is required to meet, etc.)
  • To consider the risks of insolvency or bankruptcy. Particular consideration should be given to whether the consequences of the resulting coronavirus could lead to the insolvency of the target company and what the consequences would be in that regard;
  • To look at the bigger picture. Depending on the business being conducted by the target company, it may be advisable to pause the ongoing acquisitions (for instance, until the first stroke of the coronavirus epidemic has passed, when things will be much clearer and more predictable). This especially relates to the industries that are significantly affected by the outbreak of coronavirus infection, e.g. tourism, catering, etc.

Government support to the economy

Authorities in RS adopted the Decision on Declaration of State of Emergency (Odluka o proglašenju vanrednog stanja, “Official Gazette of RS” no. 31/2020), while authorities in FBH adopted the Decision on Declaration of State of Accident, dated 16 March 2020 (Odluka o proglašenju stanja nesreće), and authorities in Brcko District adopted the Decision on Declaration of State of Natural Accident no. 01.1-1141SM-001/20 dated 13 March 2020 (Odluka o proglašenju stanja prirodne nesreće zbog COVID-19 (korona virus)).

All these decisions have caused certain economic consequences from their very adoption: reduced volume of work, shortened working hours, suspension of work for some entrepreneurs and business entities, etc.

Among the first consequences of making such decisions is certainly the panic and uncontrolled purchase of basic foodstuffs, as well as disinfectants, which has led to various seller frauds. Namely, many sellers have increased the prices of these products. Thus, competent authorities adopted following decisions that brought prices back to the level they were on 5 March 2020: RS Regulation on returning prices to the previous level (Uredba o vraćanju cijena na prethodni nivo, “Official Gazette of RS” no. 25/2020), FBH Decision on determining the existence of conditions for prescribing direct price control measures dated 9 April 2020 (Odluka o utvrđivanju postojanja uslova za propisivanje mjera neposredne kontrole cijena na području Federacije BiH), and Brcko District Regulation on returning prices to the previous level no. 01.11-0566LO-007/20 dated 18 March 2020 (Uredba o vraćanju cijena na prethodni nivo).


On 19 March 2020 FBH Government adopted Program of activities to stabilize the economy and remedy the effects of the coronavirus pandemic with the aim of preserving jobs, increasing protection in the event of loss of employment, preserving the stability of pension insurance and preserving the stability of the banking sector.

The Government of the Federation of BiH has submitted to the parliamentary procedure an Act on the Mitigation of Negative Economic Consequences Caused by a Coronavirus Pandemic, which includes a set of measures to mitigate the negative economic consequences of a pandemic such as subsidizing contributions for compulsory insurance, suspension of calculation and payment of default interest on public revenues, abolition of the obligation to pay advance payment of corporate income tax and income tax to entrepreneurs, etc.

Further, the Tax Administration of the Federation of Bosnia and Herzegovina has extended the deadlines for filing tax returns.

The FBH Banking Agency has made interim measures for banks and microcredit  financial institutions to mitigate the negative economic consequences caused by the COVID-19 disease, by which banks and microcredit  financial institutions may grant clients specific measures, such as a moratorium or a delay in repayment of loans, the introduction of a grace period for repayment of the principal of the credit obligations for a maximum period of 6 months etc.

The FBiH Government has adopted the Decision on reduction of the rent by 50% of the business premises managed by the FBiH Office for Joint Affairs.

Cantonal authorities also adopted many measures as a support to economy.


On 31 March 2020, the Government of the BD BiH presented the following measures to support the economy:

  • Legal entities and entrepreneurs whose work has been banned will be paid a minimum gross salary (i.e., a net salary of BAM 520 with taxes and contributions) for March 2020;
  • All other enterprises, entrepreneurs and business units in the Brcko District, except for those explicitly exempted, have the right to use the subsidy for paid taxes and contributions to the calculated and paid salaries for the month of March 2020 in the amount of 30%.

Public Invitations for the reimbursement of the minimum gross salary and subsidies are published on 6 April 2020.


In connection with the state of emergency, the President of RS issued a series of legislative decrees which include the following measures:

  • deferral of filing of tax returns based on the final account;
  • postponement of deadlines for payment of certain tax obligations;
  • payment of taxes and contributions from the Solidarity Fund for March, payment of the lowest salary for the April and related taxes and contributions, for employees of legal entities and entrepreneurs who did not operate business as a result of a pandemic; and
  • benefits to gambling operators in connection with the payment of gambling fees during the prohibition of performing this activity, or during a state of emergency.

The Republic of Srpska, and the Republican Emergency Stab adopted:

  • Decision on the urgent payment of tax refunds and contributions to increase salaries in 2019; and
  • Moratorium on repayment of a loan by the Investment and Development Bank for a period of three months for business entities in RS.

The Governing Board of the Banking Agency of the Republic of Srpska has issued a Decision on temporary measures to mitigate the negative economic consequences caused by the COVID-19 related to the clients of banks and microcredit organizations that are directly or indirectly affected by adverse effects.

The City of Banja Luka has adopted a set of measures related to:

  • granting subsidies to business entities for an amount of:

a) utility fees for highlighting a business name,
b) fees for occupying public land
c) regular interest on loans

  • approval of a moratorium in repayment of debt to business entities
  • release of rent payment to tenants of business premises contracted by the City.

Also, the distribution of packages of agricultural sowing material has started in Banja Luka.


Labor law issues

On March 23rd 2020, State of Emergency Act was adopted in relation to the state of emergency declared by decision of the National Assembly of March 13, 2020. The newly adopted Act introduces amendments regarding remote work and accordingly amends the Labor Code to address some of the key challenges faced by employers during the COVID-19 pandemic.

The amendments to the Labor Code set a legislative framework with regards the remote work during the declared state of emergency.

Prior to the amendment, working remotely (also known as “home office” and “telework”) was a possible option only in case it was specifically agreed upon in the employment agreement and with the employee’s explicit consent.

According to the adopted amendment, the employer may now unilaterally order its employees to work from home during the state of emergency. This may be executed by an order changing the workplace. In practice, this means that signing annexes to employment agreements would no longer be required for the purposes of documenting the employer-employee relationships.

It is important to note that the Act specifies a minimum regulatory content of the employer’s order for assigning remote work – issues related to work, technical and other equipment at the workplace, duties and maintenance costs, different terms and conditions regarding supply, replacement and maintenance of equipment, as well as provisions regulating the acquisition of certain equipment items by the employee while remote working remotely.

The latest amendments to the Labour Code provide for broader rights, including “self-quarantine”, for certain categories of employees such as: pregnant employees, mothers or single fathers or adoptive parents of a child up to the age of 12 or of a disabled child, regardless of such child’s age, vocationally rehabilitated employees, persons with permanently reduced work capacity of 50% and above, etc.

These persons have the right, at their discretion, not to go to work, by requesting to use their paid or unpaid leave, and the employer shall be obliged to allow it under the declared state of emergency. The whole time during which an employee uses his/her leave, either paid or unpaid, as descried above, shall be considered length of service.

The Act regulates several new options for employers to cope with the of work reduction or complete cease of operations.

  • Employers are now entitled to unilaterally introduce part-time work for the entire or a part of the state of emergency period – the new paragraph amends the existing regulation to the effect that in the event of a dispute employers will not be required to prove reduction in the volume of work, but will instead be allowed to directly refer to and rely on the objectively existing state of emergency in the country as grounds for introducing part-time work. Moreover, employers are not obliged to conduct consultations with representatives of the trade unions or employees’ representatives prior to introducing the part-time work. The three-month per calendar year restriction for the introduction of part-time work is not applicable under the state of emergency circumstances – as it has already been emphases above, such measure can be introduced for the entire state of emergency period. The restriction regarding the duration of the part-time work, however, remains valid, namely it may not be less than half of the statutory duration, for example, a minimum of 4 hours with normal working time of 8 hours per day. When introducing part-time work, employers shall owe lower remuneration proportionate to the hours worked
  • Employers have the right to suspend the activities of the entire enterprise, part of it or of individual employees for the state of emergency period by issuing an order. Suspension of work for a certain period of time with an employer’s act is a new concept which was not previously present in employment legislation – until now, the law has regulated only the factual situation of work suspension. A company may suspend work if cease of operations during the state of emergency period is more financially advantageous for the company. Suspension of work, however, does not exempt employers fromtheir obligation to pay renumerations – they are due and payable in their full amount. Additionally, for the time of suspension, the employer may grant the entire paid leave to employees without their consent. Possible scenarios to consider include introducing flexible working hours, declaring stoppage, closing down the whole enterprise or part of it, reducing permanent positions or dismissing employees on the basis of work reduction or suspension of more than 15 working days.

Employers still have no right not to pay remuneration during the state of emergency, even after the adopted amendments. As already noted above, even if employers exercise their right to suspend activities of the entire enterprise, of particular units or of individual employees, employers still owe the full remuneration to employees for the duration of the suspension.

If the employers’ activity falls within the economic sectors for which a prohibition or restriction of activity during the state of emergency period has been imposed, they could benefit from the proposed business support measures.

The employers affected by the circumstances will be entitled to a compensation in the form of a financial aid in the amount of 60% of the remuneration of their employees, but for no more than three months, meaning that they will pay 40% of the employees’ remuneration using their own funds and 60% using funds provided by the of the National Social Security Institute. The criteria to be met by employers in order to be eligible for such compensation are to be determined by an act issued by the Council of Ministers.

Important tax amendments

Amendments to tax legislation aimed at economic relief for citizens and businesses during the period of emergency were introduced with the State of 1.

One of the most publicly commented measures was the extension of tax declaration and payment terms. The term for filing the Annual Tax Return for Natural persons for 2019 remains the same – April 30, 2020. In order for a 5% discount to be applied, the annual tax return should be submitted electronically by March 31.

According to the amendment to the Income Taxes on Natural Persons Act, sole traders shall file an annual tax return and a business activity report by June 30, 2020 and shall pay the tax due. In order to benefit from the 5% discount, the said persons should file their tax return electronically by May 31, 2020.

The term for filing the annual financial statements of companies and non-profit associations and foundations in the Commercial Register is extended until September 30.

All terms not expressly extended by the new act remain unchanged. This also applies to the terms under the Value Added Tax Act – the next term for filing the monthly VAT return of the registered persons is April 14. The terms for registration in the cases provided for by law also remain unchanged.

The Act explicitly prescribes that no new enforcement cases for due (established by audit instrument or declared) public receivables shall be initiated during the state of emergency. However, an important exception to this rule is that enforcement can be initiated where it is necessary to protect particularly important state or public interests or where the enforcement is hindered or severely impeded.

The assessment whether these circumstances exist is vested in the revenue administration.

In practice, new enforcement cases for due public receivables may be initiated by a decision of the NRA.

Government support to the economy

One of the business aid measures concerns all employers affected by the crisis, divided into two categories:

  • All employers whose activities fall directly into the economic sectors for which a prohibition or restriction of activity has been imposed during the state of emergency.
  • All companies which have completely or partially suspended their business activity or have introduced part-time work and have at least 20% reduction of revenue.

Тhe affected employers will be able to apply for compensation for the duration of state of emergency, but not more than 3 months and to the amount of 60% of the social insurance income of their employees. The specific criteria which employers must meet in order to benefit from the aid, as well as a number of procedural issues, are set out in two decrees of the Council of Ministers (Decree No. 55/30.03.2020 and Decree No. 71/ 16.04.2020).

The employer owes the full amount of the remuneration to the employees concerned, for whom compensation is granted by the state, as well as the payment of the social insurance contributions due. Companies that have difficulties to keep its employees can pay 40% of their salaries and the government will pay the remaining 60 % during the state of emergency or for a period up to 3 months. The 60% will be calculated on the basis of the social security income for employees for January 2020.

The Council of Ministers also approved the increase of state’s share in the capital of Bulgarian Development Bank AD (BDB) through monetary contributions in the total amount of up to BGN 700 000 000.

The increase of BDB’s capital is aimed at use of these funds to issue portfolio guarantees by BDB to commercial banks for the implementation of specific economic support measures as regards COVID-19 epidemic.

Thus, BDB will provide a guarantee scheme on the portfolios of loans which commercial banks will form in order to be secured for the granting of the loans to their clients. This aims to mitigate the credit risk of the bank concerned, with the BDB bearing a large part of it for debtors who are in difficulty to pay their loan obligations.

The specific parameters of the risk distribution, the procedure and terms of claiming the rights under the guarantees and the final mechanism of the measure application may be discussed after the negotiation of the terms between BDB and commercial banks is finalized.

Entities that can benefit from the measures:

  • BGN 500 million of the envisaged monetary contribution is intended to be used by BDB for issuing portfolio guarantees to commercial banks, which will enable them to provide more flexible business loan terms and conditions for a certain period. No official information has been released yet as to whether the guarantees provided by BDB to commercial banks will be for already granted existing loans or for new ones. It is expected for both existing and new loans to be included. It is not yet known what type of loans this guarantee will cover – those for working capital or for other types of loans.
  • BGN 200 million from the resource provided by the state to BDB will be directed to natural persons on unpaid leave as a result of the pandemic situation. They will be able to take an interest-free loan of up to BGN 1500. The original idea was that BDB would transfer the amount directly to commercial banks.

Employers will not have the right to impose mandatory unpaid leave on employees, however employers may impose up to half of the annual paid leave without the consent of the employee.

Employers may unilaterally impose to the employees to work from home, whenever this is possible.

All public sales are suspended during the state of emergency.

All limitation periods for judicial, arbitration and enforcement proceedings are suspended, except for those in criminal case.

Freezing bank accounts of citizens or hospitals will not be allowed during the state of emergency.

Interest rates for delay will not apply in cases of failure to make monthly payments on time.

The council of Ministers will be able to dispose EU funds without the normal public procurement procedures. 



Since the outbreak of the COVID-19, measures implemented by the National Civil Protection Headquarters (hereinafter: “NCPH”) on 19 and 20th March, for the prevention of further spreading of the COVID-19 virus have been extended (mostly till 4 May 2020 or until 18 May 2020). Some of those measures still in force are:

  • temporary ban of public gatherings, working in stores, services and the holding of sports and cultural events
  • temporary ban of crossing the Croatian border
  • suspension of public transportation
  • temporary ban of entering into seaports in the Republic of Croatia to the vessels obliged to self-isolate or quarantine
  • limited working hours opening hours of the stores.

One of the most important measures were relaxed on 18 April, National Civil Protection Headquarters (‘’NCPH’’) passed decision by which it allows  Regional Civil Protection Headquarters (“RCPH”) to propose to the NCPH derogation of the previously implemented  measure of restrictions travelling between Croatian regions except the one where the residence of the individual is.

Number of RCPHs have proposed derogation of the aforesaid movement restriction on 20 April 2020 and NCPH has accepted those proposals so at this moment e-passes are not required for travelling between Croatian regions.

On 18 April 2020 NCPH adopted the decision on the basis of which the special freight line Zadar – Ancona and vice versa in international liner shipping during the duration of the COVID-19 crisis was introduced.

Labor law issues

Previous measure of financial aid for maintaining employment in the amount of HRK 3.250,00 (approx. EUR 430,00) per employee monthly (for full-time employment) and HRK 1.625,00 (approx. EUR 210,00) per employee monthly (for part-time employment was increased by the Government on 2 April 2020 to HRK 4.000,00  (approx. EUR 530,00) per employee monthly for April and May and the employers using said aid will not be obliged to pay the mandatory contributions   for the employees for which they are using such aid.

Ministry of Labour and Pension System has informed the public that temporary measure of suspending aid for self-employment and employment for securing additional income have been implemented for the purpose of funding for job retention in COVID-19 hardest hit industries.

Ministry also continues to provide regular  opinions concerning the current problems that employer and employees amid crisis caused by COVID-19 pandemic, primarily organisation of work at a separate place of work, health and safety at work (in the employer’s premises and in other premises in case of remote work, salaries, fulfilment of the obligations from the employment contract etc.

The Ministry has emphasized that amid COVID-19 caused crisis, each individual/employee is obliged to immediately inform the employer in case of safety at work and health issues and to act according to obligations from the labour legislation, health and safety legislation and recommendations issued by competent authorities for this situation specifically.

With respect to fulfilment of employees’ employment contract obligations, they are the subject of application of labour legislation as if the situation is regular – the employee is obliged to work (whether at the employer’s premises or at home) and the employer is obliged to record the working time and pay the salary. With respect to health and safety issues – employer is obliged to organize business operations in a manner that safe working conditions are secured for the employees.

Measures that can be implemented by the employers in situations of disruption of the employer’s business activities caused by the COVID-19 crisis in order to save jobs and to protect from virus spread are:

  • Introducing uneven working hours
  • Change the working hours
  • Redistribute working hours
  • Arrange part-time contract with the employees (full-time and part-time)
  • Decide on different organization of working time (i.e. the introduction of shift work, organization of teamwork etc.)
  • Decide on the use of annual leaves

Contractual issues

As in March 2020 the COVID-19 caused crisis continued to expand during April 2020 globally and in Croatia.

Since at this moment is not quite possible to predict almost any developments, it is still expected that fulfilment of contractual obligations will affect numerous business relationships and in many that process is already happening.

Depending on the type of the contracts and respective obligations, nature of disruption, type of industry, impact of the Government measures and probably many other factors which can occur in the upcoming period, institute provided under Croatian civil obligations legislation (primarily Civil Obligations Act; ‘’COA’’) is:

  • Force majeure (Articles 343, 1067 of the COA)
  • Change of contract or its termination due to change of circumstances (Articles 369 – 372 of the COA)
  • Inability for fulfillment of the contract for which neither of the contracting parties is responsible (Article 373 of the COA)
  • Uncertain fulfillment of contractual obligations by one of the contracting parties (Article 359 of the COA)

It is to be seen which of these institutes will be the most suitable for individual contractual relationship, taking into consideration all mentioned factors which will most likely play significant role in the type of their resolution.

Croatian Government proposed amendments to the Enforcement Act and its most relevant proposed amendments are:

  • possibility of postponement of the enforcement procedure in case of extraordinary circumstances (i.e. COVID-19 pandemic/epidemic) financial aid received due to the COVID-19 pandemic/epidemic impacts on economy, cannot be the subject of enforcement
  • enforcement procedures are postponed for the period of 3 months starting from 11 March 2020 (interest cannot be claimed for that period).

It is to be seen whether these legislation solutions will impact to the fulfillment of contracts and to which extent to their enforcement.

Government support to the economy

On 2 April 2020 Croatian Government has announced additional 8 measures by which the measures previously presented on 17 March 2020 have been updated, all aimed to support and assist the employers in overcoming the crisis caused by COVID-19 pandemic. Said amendments include measures from the finance sector providing to taxpayers whose business activities have been aggravated to be fully or partially exempt from paying public contributions and to be provided with the possibility of payment of the VAT upon collecting the invoiced amount. Some of the other measure are:

  • many companies will be partially or completely exempt from their tax liabilities for April, May, and July. This measure depends mostly on the individual company’s revenues – in case that revenue decreases by 20% to 50% company will be entitled to a deferral and payment in instalments for 24 months without interest.
  • deadline for the submission of financial statements was extended from 30 April until 30 June 2020
  • businesses are exempt from paying the Financial Agency a fee for the publication of financial statements.
  • croatian Government has introduced the stand still program, in which the suspension of enforcement of debts from all debtors (legal or natural persons) for a period of three months is proposed.



The Government of Montenegro imposed several measures in order to prevent and limit the spread of COVID-19 including, thorough orders on undertaking temporary measures for stopping entering into the country, suppression and transmission control of the new coronavirus, which particularly refer to prohibition of public gatherings, both indoors and outdoors.

Also, in the entire territory of the Republic of Montenegro, work prohibition of all hospitality facilities (coffee shops, restaurants) is in force, except for those who offer delivery services and all retail shops except for pharmacies and retail shops supplying the essential goods and hygiene products. The shops which are allowed to be open have to display the notice about the number of persons allowed inside and ensure that safety measures are enforced inside and in front of the shop.

Administrative offices providing public services are reduced to minimum work and employers are instructed to organize remote work when possible.

Public, as well as intercity and international transportation, is cancelled except for specially organized arrivals of residents of Republic of Montenegro and departures of foreigners to their home countries. Several border crossings are completely closed down.

Prohibition of movement (curfew hours) is in force for all persons between 11pm and 5am the next day. The prohibition does not apply for persons who perform the work in public interest which is proved by the conformation given by the employer. 

Labor law issues

Considering that all schools and kindergartens in Montenegro are closed the biggest change related to employment is made in the field of paid leave from work for one parent of a child not older than 11 years of age, with the exception of healthcare employees, and employees in certain state institutions.

The government suggested employers to organize remote work where possible. Shortening and redistribution of working hours related to reduced scope of work should also be considered. Suspension of work when employees would be entitled to the compensation of salary amounting to at least 60% of their salary (which cannot be less than minimum salary) is one of the available options.

The Decree for taking temporary measures to prevent the introduction into the country, suppress and prevent the transmission of new coronavirus (Naredba za preduzimanje privremenih mjera za sprječavanje unošenja u zemlju, suzbijanje i sprječavanje prenošenja novog koronavirusa, Official Gazette of the Republic of Montenegro no. 22/2020, 24/2020, 31/2020 i 35/2020) prescribes inter alia, that the obligation of legal and natural persons performing construction work is to organize work in a manner that ensures respecting epidemic measures, especially respecting the social distance between employees and other measures of safety and health at work.

Contractual issues

Given the above-listed measures already imposed by the authorities, which definitely limit certain business activities, the Force Majeure clauses set out in the commercial agreements may be triggered upon fulfilment of certain conditions. The contractual party may not be liable for the non-fulfilment of its contractual obligation if: (i) the Force Majeure circumstance occurred (i.e. the Government already imposed the measure that prevented the party to perform its obligation); and (ii) the obligation has not become due before the Force Majeure circumstance occurred.

Government support to the economy

The Central Bank imposed several economic measures in order to mitigate the negative effect of the pandemic: (i) postponement of the credit repayments of the general population and companies, with all commercial banks, microcredit institutions and Investment Development Fund (IDF)  in the duration up to 90 days; (ii) postponement of the payment of income tax and contribution payments as well as tax obligations of the taxpayers in tax debt rescheduling programs; (iii) new credit opportunities provided by the IDF with the aim of increasing of liquidity of companies in the amount up to EUR 3 million; and (iv) advance payments to the service providers and work performers with the provision of the  advance payment bond, in order to keep their liquidity and continuity of the capital investment projects.

On 9 April 2020 the Government of Montenegro presented the suggested set of measures to support the economy.

The measures include: (i) subsidies for partial amount of minimum salaries for employees in industries that were particularly affected by the epidemic situation (had to cease the activities completely or minimize the work) as well as for the employees who had to stay at home due to child care or quarantine; (ii) subsidies for new employment for entrepreneurs, micro, small and medium-sized companies who register new employees in April; (iii) new credit lines designed by the Investment and Development Fund to compliment the measures; (iv) all state entities to request the postponement of enforcement for a period of 60 days for all economic entities which had to discontinue their activities due to epidemic; (v) exemption of paying the fixed part of electrical bill for April, May and June for companies which had to discontinue their activities due to the epidemic (vi) realization of requested VAT refunds within 45 days and extension of the limit of exposure of the customs guarantee for deferred payments of custom debs from 30 to 60 days for months of April and May by the Customs Administrations for companies which had to discontinue their activities due to the epidemic; (vii) support for agricultural and fishers sectors (one-time assistance, support for purchase, favourable loans); one-time assistance in amount of EUR 50 for all unemployed persons.

North Macedonia

Labor law issues

One parent per family with children up to the age of 10 shall be released from work with the right to receive 100% of his/her salary. The same applies to pregnant women and employees with chronic illnesses. These employees shall consume their outstanding (last year’s) holidays until the end of May and the first part of this year’s holidays (2 weeks uninterrupted) until the end of June.

Mothers using maternity leave that expires during the epidemic shall be able to extend the maternity leave as long as the state of emergency continues.

Macedonian Labor Law provides various tools for (re)organising of the working process that can be applied in the times of COVID-19, such as change of working hours, redistributing of working hours, part-time work, working in shifts, working from home, use of annual leave, etc.

In cases where the operations have ceased, the Labor Law provides the following two options:

  • If operations have ceased due to force majeure event, the employer can pay 50% of the salary to the employees who cannot perform their job due to such event (Please note that ceasing operations in order to comply with the governmental measures for fight against the COVID-19, represents a force majeure event)
  • If operations have ceased due to employer’s business reasons (i.e. not directly as a result from the force majeure event), the employer can pay the employees 70% of the salary for three months during the year.

The Government introduced two measures for supporting employers:

  • Subsidizing the mandatory social contributions for employees for the months of April and May 2020 in the amount of 50% of the contributions (maximum 50% of the mandatory social insurance calculated on the basis of the gross salary per employee in the country)
  • Payment of salary for the months of April and May in the maximum amount of 14.500 MKD per employee for a full-time employment.

The Government furthermore adopted a Decree for supporting independent professions by paying them monthly amounts of MKD 14.500 per month for the months of April and May.

Contractual issues

The spreading of the COVID-19, the recommendations for limitation of social interactions and the safety measures issued by the N. Macedonian Government, as well the declared state of emergency, naturally resulted in significant decreasing, if not ceasing, of the economic activity.

In such circumstances, the performance of contractual obligations is called into question. Macedonian Obligations Law offers solutions for addressing this issue through the following institutes:

  • Force majeure (Article 252)
  • Change in circumstances (Articles 122-125)
  • Inability for fulfillment of the contract for which neither of the contracting parties is responsible (Article 126)
  • Uncertain fulfillment of contractual obligations by one of the contracting parties (Article 112).

The Government adopted a Decree governing the application of the Law on obligations during the state of emergency, under which it decreased by half the penalty interest rates prescribed by the Law.

Government support to the economy

N. Macedonian Government issued the first set of measures for support of the economy, consisting of the following forms of aid:

  • Direct financial support of liquidity of micro, small and mid-size companies: The Government provided a total amount of EUR 5,7 million for crediting of the companies suffering illiquidity due to the COVID-19 situation. The funds will be offered as loans and companies will be eligible for certain amounts of loans depending on the size: a) micro-companies (up to 10 employees) – EUR 3k – 5k, b) small companies (10-50 employees) – EUR 10k – 15k, c) mid-size companies (50-250 employees) – EUR 15k – 30k. The loans will be granted with: 0% interest, 6 months’ grace period and 2 years’ returning term
  • Subsidizing of the employees’ contributions in the tourism, transportation and hospitality industries, for the months of April, May and June. The subsidy amount is 50% of the average salary for 2019. Only the companies that have profit as a financial result from the operations in 2020 will be obliged to return the subsidies in amount of 50% of the profit (before tax). Hence, the measure is intended for companies that had worsened financial results in 2020 due to the virus
  • Decreasing of the basic interest rate of the National Bank of the Republic of North Macedonia to 1,75%
  • Additionally, the National Bank is working on strategy for managing the credit risk to ease the conditions for restructuring of the loans in the most affected industries
  • Releasing of tax advance payment obligation for the months of April, May and June, primarily for the companies operating in the most affected industries, and afterwards for companies operating in other industries that were affected by the preventive measures issued by the Government in its fight against the spreading of the virus
  • Decreasing for 50% of the lawfully imposed interest rate (from 10/8% to 5/4%), as well the penalty interest for public duties (from 0.03% to 0.015%)
  • 100% releasing of customs duties for a list of basic products such as flour, sugar, detergents, protective/disinfection products, etc.
  • The Tourism Fund which is currently assessed to amount of ca. EUR 1.2 million will be used for compensation of the tourism industry.

A decree for the application of the VAT law provides for VAT exemption for the trade of goods and services donated to a budget institution for the purpose of the COVID – 19 crisis management as well as on the trade of goods and services with a budget institution paid by the budget institution from donated funds.



On 15 March 2020, the state of emergency has been declared in the Republic of Serbia in accordance with Article 200 paragraph 6 of the Constitution, which was institutionalized through the Decision on the Declaration of the State of Emergency (Odluka o proglašenju vanrednog stanja, “Official Gazette of the Republic of Serbia”, no. 29/2020).

The Business Registers Agency does not operate with clients, but solely via electronic and regular mail, notaries public perform only solemnizations, while the public bailiffs have stopped operating for the time being.

The Ministry of Justice has issued the decision on the postponement of all the hearings in all legal matters before the courts in the Republic of Serbia, except very urgent ones which are numerus clausus
listed in the decision.

Also, the Government of the Republic of Serbia adopted a decision limiting the prices of basic foodstuffs, protective equipment and disinfectants. Furthermore, the Decision on banning the export of certain goods important for public consumption has been adopted. The Decision concerning the ban on export of medicines has been changed and now the export ban applies not only to medicines manufactured in Serbia, but to all medicines that are in the territory of Serbia.

Due to emergency measures and entry restrictions, international good transport and transit through Serbia has seen some delays. Ministry of International Affairs has issued a note lifting the entry ban in certain cases, including the crews of motor vehicles in international goods transport and transit (up to 12 hours).

As of Sunday, 22 March 2020, 8pm all restaurants, coffee shops, and shopping malls are to remain closed until further notice.

Labor law issues

The Decree on the Organization of Work of Employers During the State of Emergency (Uredba o organizovanju rada poslodavca za vreme vanrednog stanja, “Official Gazette of the Republic of Serbia”, no. 31/2020) imposes an obligation on the employers to enable work outside the employer’s premises (remote work and work from home) at all work posts where such work can be organized.

If the employer’s Work Regulations (srb. Pravilnik o radu) or employment agreements do not regulate remote work and work from home, the employer is required to issue individual decisions on remote work to each affected employee. This decision must determine (i) the duration of work hours; and (ii) the manner of supervision of the work performed remotely. In addition, the employer must keep the record of the employees working outside the employer’s premises.

Where remote work is not possible due to the nature of the work, the employer must mitigate the risk of disease spread by:

  • Organizing work in shifts (if possible and if it does not require additional resources)
  • Replacing physical meetings with virtual meetings
  • Enabling all business meetings to be held electronically or by other appropriate means (video link, video call, etc.)
  • Providing all general, special and extraordinary measures relating to the hygienic safety of facilities and persons
  • Ensuring sufficient protective equipment for those who are in direct contact with clients and sharing the workspace with others.

The Government’s Conclusion Regarding the Limitation of Public Indoors and Outdoors Gatherings (Zaključak u vezi sa ograničenjem okupljanja na javnim otvorenim i zatvorenim prostorima) regulates the manner in which the population may gather in public indoor and outdoor premises.

Outdoors, the distance between the people must not be less than 2m2 while indoors this distance increases to 4m2. All shops and other commercial premises must inform their customers of the maximum persons allowed in the premises given the above obligatory distances, in the form of a notice placed in front of the premises.

This does not apply to the persons who due to their specific working obligations cannot execute this Conclusion.

The Decree on Measures During a State of Emergency (Uredba o merama za vreme vanrednog stanja) prohibits moving in public places, i.e. outside apartments, premises and residential objects for certain categories of population in certain periods of time.

In addition, except for certain exemptions, all persons are prohibited from going outside the apartments, premises and residential buildings between 6 pm and 5 am.

The aforementioned prohibitions shall not apply to persons to whom the Ministry of Interior issued a movement permit. Employers are obliged to issue certificates to employees that their work engagement is necessary in the period from 6pm – 5am.

An employer who has up to 100 employees in a shift that lasts during the period of prohibition of movement issues a certificate on a daily basis, while an employer that has more than 100 employees in a shift that lasts during the period of prohibition of movement issues a certificate on a weekly basis for each employee for whom they obtained consent of the Ministry. The Ministry will also accept certificates in electronic form (scanned receipt on phone, tablet, etc.).

On 20 April 2020, the Government of the Republic of Serbia has adopted the Conclusion no. 53-3259/2020 under which all employers in the field of provision of services (e.g. vulcanizers, car mechanics, shoemakers, tailors, dry cleaners, motor vehicle driver training schools, etc.) and in the field of retail trade (e.g. bookstores, traders of cars, motorcycles, bicycles, nautical stores, technical goods, construction materials, etc.) shall continue to perform its activities as of 21 April 2020 in the largest possible capacity.

Continuing their work, employers are obliged to provide, i.e. to enable its employees and users of services the implementation of all preventive measures that affect the safety and health of employees, i.e. service users, especially those related to the prevention of the spread of the COVID-19 infectious disease caused by the SARS-CoV-2 virus (keeping social distance, disinfection and use of protective means, i.e. masks and gloves), and in this respect to adopt a specific plan of application of measures, which is an integral part of the risk assessment act adopted in accordance with the law and regulations in the field of safety and health at work.

Contractual issues

Given the above listed measures already imposed by the authorities, which limit certain business activities, the force majeure clauses set out in the commercial agreements may be triggered upon fulfilment of certain conditions. The contractual party may not be liable for the non-fulfilment of its contractual obligation if: (i) the force majeure circumstance occurred (i.e. the Government already imposed the measure that prevented the party to perform its obligation); and (ii) the obligation has not become due before the force majeure circumstance occurred. 

Government support to the economy

The Decree on the Tax Measures During the State of Emergency for the Purpose of Mitigation of the Economic Consequences Caused by Disease COVID-19 (Virus SARS CoV-2) (Uredba o poreskim merama za vreme vanrednog stanja radi ublažavanja ekonomskih posledica nastalih usled bolesti COVID-19 izazvane virusom SARS CoV-2) aims to increase the liquidity of the taxpayers in the Republic of Serbia during the state of emergency.

These measures refer primarily to the tax payers in the tax debts rescheduling programs, while the tax debts of all other taxpayers will be burdened by default interest as usual.

Also, the National Bank of Serbia imposed by its decision the moratorium on the obligatory payments of financial obligations to the commercial banks based on the credits and loans in a period not shorter than 90 days. This refers to citizens, agriculture entrepreneurs, other entrepreneurs and companies operating in the Republic of Serbia.


Labor law issues

Due to exceptional circumstances an employer may unilaterally assign an employee to another type of work or another place of work. Such measure can only last for the duration of exceptional circumstances. In addition, employers may invoke some other options provided by ZDR-1.

1. Measures for the cases where the employees are still working:

  • Work from home
  • Performance of other work
  • Temporary redistribution of working time

2. Measures for the cases where the employees are not working:

  • Instructing workers to wait for work at home due to inability to provide work
  • Referring employees to stay at home for preventative reasons
  • Special unpaid leave
  • Collective leave
  • Use of annual leave
  • Termination of employment contract for business reasons

3. Measures taken in agreement between employer and employee:

  • Salary reduction
  • Part-time employment
  • Termination of the contract by offering a new one

The employer is obliged to organize work process in a way that employees are guaranteed safety and health at work in all circumstances and working conditions.

The employer must, therefore, take the necessary measures to ensure the safety and health of employees and other persons present in the work process. It is important to prevent, eliminate and manage occupational hazards and provide information and training of employees, with appropriate organization and necessary material resources.

Contractual issues

Based on the current state of events and their development in the last few weeks it can be expected that the spread of the virus, as well as the measures for its prevention, will significantly impact fulfilment of contractual obligations. The best solution is such cases is to reach a mutual agreement between the parties. Taking into account that amicable solution is not always an option, we are presenting you a few institutes of general contractual law, which will become especially relevant in such situations:

  • Force majeure
  • Change in circumstances (article 112 of Obligations Code)
  • Inability to fulfil obligations (article 116 of Obligations Code)
  • Fulfilment of obligations is uncertain (article 102 of Obligations Code)

Government support to the economy

1. Benefits in tax legislation

  • Tax payment in up to 24 monthly installments or deferral for a period of 24 months
  • Payment in installments or deferral of tax with insurance
  • Payment in installments in the event of preventive financial restructuring or simplified compulsory settlement
  • Request to change the amount of monthly or quarterly installment of tax prepayment
  • Extension of the deadlines

2. Measures according to the currently adopted intervention laws:

  • Measures to assist self-employed
  • Subsidized waiting for work at home
  • Subsidized salary compensation in the event of ordered quarantine
  • Compensation for sick leave during the epidemic
  • Compensation for parents
  • Deferral of loan payments
  • Extension of the deadline for submission of tax returns and payment of taxes
  • Payment of all contributions to the pension scheme
  • Measures to ensure corporate liquidity

3. Other measures and aids:

  • Loans of SID Bank
  • Measures of the Slovene Enterprise Fund (“Slovenski podjetniški sklad”)
  • Subsidies of the Slovenian Tourist Board (“Slovenska turistična organizacija”)
  • Suspension of judicial and administrative deadlines

*Disclaimer: The information contained herein is intended solely for informational purposes and is generally available to the public and obtained from sources believed to be reliable. SELA does not guarantee the accuracy, completeness, or timeliness of the information and shall not be liable for any damages or costs in connection with the use of the content contained herein. Nothing in this document or its updates is to be construed as providing legal advice in any manner. For any inquiries please get in touch with one of our team members.

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