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 are still in operation, but due to the shut-down of public transport (available only for healthcare staff and aid services, police etc.), the transport of persons is 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. At the time of writing, it is possible to walk in the streets only between 5:00 – 13:00.

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

The Government expects the employers to continue paying salaries under normal conditions, and for such purpose, it has 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 do 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 are considering 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.

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.

Government Support to the Economy

The financial measures taken by the Government to fight the impact of the COVID-19 pandemic, are as follows:

  • 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 and 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:

  • 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.
  • 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.
  • 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 installments due between March 13 2020, 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.


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 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.

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.


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.

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:

1. 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.

2. 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 Alert/Emergency Situation (Odluka o proglašenju vanredne situacije, “Official Gazette of RS” no. 25/2020), 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 returning prices to the previous level, dated 16 March 2020 (Odluka o vraćanju cijena na prethodni nivo), 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.

Further, FBH Government and the representatives of the FBiH Banking Agency have entered into negotiations concerning moratoriums, i.e. deferring the payment of loans to all natural and legal persons affected by the economic effects caused by the coronavirus. The FBiH Government will instruct the FBiH Development Bank, in cooperation with the competent ministries, to prepare a proposal for a decision to establish a credit line for improving the liquidity of companies found to be endangered by the spread of coronaviruses.

In addition, one of the measures is the establishment of a Coordination Board for stabilizing the economy and repairing the effects of the coronavirus pandemic in order to support export companies that are facing business problems due to the effects of the spread of the coronavirus in export markets. In addition, this fund would support companies from other sectors, especially transport and tourism.

Financing for this fund would be secured through intervention loans / donations from international financial institutions, as well as through borrowers on the domestic capital market.

These fund resources would mainly be used to secure financial resources to overcome disruptions in business and settle liabilities by providing adequate collateral etc. Moreover, a guarantee fund will be set up to maintain and improve the liquidity of companies found to be endangered by the spread of coronavirus.


Brcko District authorities have not adopted yet any measure to support the economy but have held meetings announcing that the Indirect Taxation Authority will be asked to postpone payment of VAT so business entities can endure this situation.

They also will support the discussion with representatives of all banks regarding the consideration of the possibility of reprogramming loans to business entities and citizens.


On 13 March 2020, the RS Government has appointed the Crisis stab for monitoring the situation in the RS economy. Measures have been proposed to mitigate the adverse effects of the coronavirus on economic operators in RS. The proposed measures are as follows:

  • Postponement of payment of corporate income tax and all liabilities in the final account for 2019 until 30 June 2020
  • Urgent repayment of tax refunds and contributions for increased salaries in 2019
  • Holding the meeting with all the representatives of banks in Republic Srpska in the RS Government in order to provide a grace period for corporate loans
  • Reduction of para-fiscal levies will be implemented in April 2020
  • For the most vulnerable economic operators working with the countries most severely affected by the coronavirus, a state-by-state analysis will be carried out
  • Moratorium on repayment of a loan by the Investment and Development Bank for a period of three months is introduced for business entities in RS.

The RS Government has announced more measures to be adopted in order to support the economy.


Labor Law Issues

In general, there are no mandatory workplace virus protection measures envisaged in the labour legislation. In view of the complicated epidemic situation, however, on March 13, 2020 the Minister of Health ordered the following mandatory measures for employers: “All employers, depending on the specifics of the respective work activity and wherever possible, shall introduce a remote form of work for their employees.

Where this is not possible, employers shall tighten up the preventive anti-epidemic measures in the workplace, including: filtering, disinfection and ventilation, shall brief and educate employees on personal hygiene and shall not allow employees or visitors with symptoms of acute infectious diseases.”

In addition to the mandatory measures imposed by the Ministry of Health (MoH), as well as any potential follow-up emergency measures which competent public authorities may implement, the Bulgarian labour legislation imposes certain general obligations on employers for ensuring healthy and safe working conditions and for taking measures to prevent and reduce the spread of common diseases (including COVID-19).

It is at the employer’s discretion to decide how exactly to fulfil these obligations taking into consideration the specifics of the activity, as well as the organisation of work at the undertaking.

Under the Bulgarian legislation employers may not order employees to work from home even in epidemic situations. Working remotely (also known as “home office”, “telework”, work from home) is regulated in the Labour Code and is defined as voluntary, therefore the employers may not on their own order work from home to employees whose employment contracts do not contain the relevant clauses.

This is related to the need to regulate the conditions, rights and obligations when working remotely – in particular with regard to the safety of work performed at the employee’s home, as well as with regard to the procedure for assigning and reporting remote work, the content, volume, results achieved, and other specifics of the work, which are related to reporting the completed tasks.

In view of the above and in observance of the order issued by the Ministry of Health, employers are advised to introduce remote work mode by amending the employment contracts of their employees.

In addition, there are no legal grounds for employers to have the right to apply measures in order to find out whether an employee is ill in the current legislation; at the same time, the Bulgarian Commission of Personal Data Protection has not yet come up with an explicit opinion on this matter. Health authorities or other competent authorities may introduce such measures with clear instructions in emergency situations, but such have not been currently announced. For certain industries, such as the food industry, such measures are considered standard and mandatory.

There are no legal grounds in the labour legislation for employers to rely on in order not to pay remuneration even in a situation where employees may not go to work.

Employers may exercise their powers in case of a stoppage by ordering employees to use their paid annual leave (for a stoppage of more than 5 business days) or to temporarily assign the employee to other duties in the same or another undertaking. In such a case, the other undertaking must be situated within the same settlement or region; there is no restriction on the minimum number of working days of stoppage prior to taking this measure, and it may continue for as long as the stoppage continues.

Employers may also introduce part-time work, but it may not be less than half of the statutory duration established for the respective period of calculation of the working time, for example, a minimum of 4 hours with normal working time of 8 hours per day. Part-time work can be introduced for a period of up to 3 months. In the latter option, employers shall owe lower remuneration.

If keeping all employees at work would lead to serious losses, employers may consider closing down the whole undertaking, closing part of it, reducing permanent positions or dismissing employees on the basis of a work reduction or stoppage of more than 15 working days.

In case an employee has decided to stay at home at their own discretion, they may either work remotely, if it is expressly provided for in their employment contract, or additionally agree on such an option with the employer, or use their paid or unpaid leave.

Labour legislation allows employees to refuse to perform the work assigned if their life or health is exposed to a serious and imminent danger. Given the unprecedented situation, it is arguable whether and under what specific circumstances a pandemic may be considered to create an imminent danger to the life and health of employees at their workplace.

Where the employee is quarantined by the health officials, the standard procedure applies – the employee is required to provide medical certificate confirming the quarantine.

Contractual Issues

According to the Bulgarian legislation, force majeure is ground for suspension of a contract (temporary cessation of its performance) in case the contract provides for a continuous or periodic performance.

Examples of such contracts include the lease agreements for premises which have been closed as a result of emergency measures; supply contracts with periodic commitment the performance of which has become impossible due to measures imposed, etc.

Should the nature of the contract allow it, and if due to force majeure the creditor is no longer interested in its performance, the contract may be terminated. Classic examples of such contracts are those where performance is required on a specific day, hour or time (such as obligations relating to pre-planned and pre-arranged events).

Failure to fulfil obligation under such contracts at the exact time specified therein is equivalent to a complete failure to fulfil obligations. In general, this type of contracts is terminated ex lege (by virtue of law) upon the occurrence of a force majeure event.

However, due to the duration of the force majeure event, it is possible that the creditor may no longer be interested in the performance under other types of contracts as well. For instance, if the creditor needs to be supplied with raw materials in order to fulfil its obligation to a third party within an agreed period, the creditor may not be interested in receiving the raw materials later as it would result in his/her delay towards the third party.

Should the creditor be no longer interested, either party may terminate the contract by notifying the other party.

It is worth noting that while the COVID-19 situation might be defined as force majeure, there is a legal provision under which the fact that the debtor does not have the financial resources to fulfil the obligation does NOT exempt the latter from liability.

Debtors, therefore, may not rely on emergency measures and refuse to pay for the time of the state of emergency, despite the fact that the ban on certain activities would inevitably affect the cash flow forecasts each trader has made upon the conclusion of their contracts.

Each case needs to be assessed as to which particular event has affected the performance, when it occurred and whether it has actually led to an objective impossibility to perform, as well as whether the event conforms to the definition of force majeure as a whole.

For example, if during a pandemic a factory cannot fulfil its obligation to supply a certain amount of products, this may be due to the measures introduced by the Minister of Health on March 13, 2020, but it may also be due to a workers’ strike provoked by concerns about health as of March 20, 2020.

It would, therefore, be a matter of a factual case-based assessment of whether a contract concluded on March 15, 2020 is covered by the doctrine of force majeure, what the reason for its non-performance is and when it occurred.

The debtor is obliged by law to notify the other party in writing within a reasonable time of the force majeure and its potential consequences regarding the performance of the contract.

It is worth noting that the amendment or termination of the contract on the grounds of “hardship” is to be done only by the court or by arbitration court (in case the parties have included an arbitration clause covering hardship disputes in the contract). Such a proceeding could be both time-and cost-consuming. It should also be noted that as part of the emergency response to the pandemic, commercial litigation by the courts was severely restricted during the state of emergency.

This means that even if a claim for hardship is brought before court, it is highly likely that the claim will be considered after the cancellation of the emergency measures.

Furthermore, it should be noted that the amendment or termination of the contract due to hardship is effective for the future; i.e. even if the claim is upheld, the party affected by the hardship would not be able to claim compensation or reimbursement of the payments it made under the contract prior to its amendment or termination by the court.

Therefore, the most appropriate approach in this situation is to resolve the issue through negotiations between the parties and to amend or terminate the relevant contract by mutual agreement.

Government Support to the Economy

  • 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. It is not yet clear which companies and under what conditions can benefit from this measure.
  • 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.


Labor Law Issues

Ministry of Labour and Pension System publishes daily 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

Situation which has globally developed in last few weeks as well as the ones expected in the upcoming period, it is 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.

Government support to the economy

On 17 March 2020 Croatian Government has announced the list of different measures aimed to support and assist the employers in overcoming the crisis caused by COVID-19 pandemic, which among others include:

  • Public contributions postponement and/or payment in instalments (with additional public contributions/taxes in especially vulnerable industries such as tourism and catering industry)
  • Postponement of payment of credit obligations
  • New loans favourable credit conditions to the companies for the purpose of liquidity
  • Monetary support  to the employer 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).



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.

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.

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 is one of the available options.

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.

North Macedonia

Labor Law Issues

N. 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.

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).

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:
  1. Micro-companies (up to 10 employees) – EUR 3k – 5k
  2. Small companies (10-50 employees) – EUR 10k – 15k
  3. Mid-size companies (50-250 employees) – EUR 15k – 30k.

The loans will be granted with:

  1. 0% interest
  2. 6 months’ grace period
  3. 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.



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 Saturday, 21 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 (In Serbian: 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.

Order on Limitation and Prohibition of Movement of Persons in the Territory of the Republic of Serbia (Naredba o ograničenju i zabrani kretanja lica na teritoriji Republike Srbije, “Official Gazette of the Republic of Serbia”, no. 34/2020) prohibits movement in public places, i.e. outside apartments, premises and residential objects, namely for:

  • Persons with the age of 65 or older – in populated areas over 5000 inhabitants
  • Persons with the age of 70 or more – in populated areas up to 5000 inhabitants

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

The aforementioned prohibitions shall not apply to persons to whom the Ministry of Interior issued a movement permit.

In this respect, if certain employees are working between 8 pm and 5 am, please note that the employer is obliged to fulfil the form-table with the data of employees working in a night shift, published on the web site of the Chamber of Commerce and Industry of Serbia: The fulfilled form-table has to be delivered to Ministry of Economy on the following e-mail address:

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
  • 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

2. Measures according to the proposal of the intervention laws:

  • Subsidized waiting for work at home
  • Subsidized salary compensation in the event of ordered quarantine
  • Deferral of loan payments
  • Extension of the deadline for submission of tax returns and payment of taxes

 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”)

*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.

Leave a Reply

Your email address will not be published. Required fields are marked *