Coronavirus – application for funding relating to extension of the wage compensation scheme and bill on notice of holiday in the extended compensation period enacted

The Ministry of Industry, Business and Financial Affairs has submitted an application for funding relating to extension of the wage compensation scheme from 9 July until 29 August 2020 and the Government has introduced a bill to amend the rules on notice of and changes to holiday during this period.

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We have previously commented on the tripartite agreement relating to extension and wind-down of the wage compensation scheme. According to the agreement, employees who are covered by the scheme in the extended period from 9 July to 29 August 2020 must take 15 days’ holiday (i.e. 3 weeks), unless they have not earned 3 weeks’ paid holiday. Irrespective of whether the employees actually take three weeks of holiday, there will be a 3-week period during which the employer will not be entitled to receive compensation for the employees. You can read the article here

Application for funding relating to extension of the compensation period
The Ministry of Industry, Business and Financial Affairs has submitted an application for funding, which has also been approved by the Finance Committee of the Parliament, relating to extension of the wage compensation scheme. The application specifies, among other things, that it is for the employer to decide whether the employees covered by the extended compensation period are to be given notice of holiday for the 3-week period when the employer is not entitled to receive compensation, or whether the employees will be required to work. Although it is not expressly stated in the application, it must be assumed that the employer can also choose to let an employee be sent home with pay for the full or a part of the 3-week period, even though the employee is not entitled to paid holiday.

This constitutes a change compared to the wording of the tripartite agreement, which laid down the requirement that employees who had been sent home and had paid holiday entitlement available were required to take 3 weeks’ holiday during the extended compensation period.

Bill on shorter notice of holiday and changes to holiday already planned
The Bill proposes to change the rules on notice of and changes to holiday for employees who are covered by the extended compensation period from 9 July to 29 August 2020. The changes will only apply for paid holiday accrued under the Holiday Act.

According to the new rules, the employer will be able to give notice of up to 3 weeks’ holiday in the period from 9 July to 29 August 2020 with a shortened notice of 1 day, notwithstanding the usual notices under the Holiday Act of 3 months for main holiday and 1 month for remaining holiday.

It will also be possible for the employer to change holiday already planned/placed outside the period from 9 July to 29 August 2020 in such a way that the relevant employees can be required to take up to 3 weeks’ holiday during the extended compensation period. Employees who have their holiday changed will still (in accordance with the Holiday Act) be entitled to receive compensation for any financial losses suffered as a result of the changes, such as cancellation of plane tickets, hotel accommodation, etc.

The amendment does not entitle employers to interrupt ongoing holiday.

In situations of notice of holiday with shortened notice as well as changes to planned holiday, the employer will be required to comply with the other provisions in the Holiday Act, applicable collective agreements, etc. This means, among other things, that the timing of the holiday must, as a general rule, be agreed with the individual employees and, with due regard to the employer’s operations, any holiday wishes must be accommodated to the extent possible. Potential notice of holiday must be given as soon as possible and in such a way that, as a main rule, the holiday is taken consecutively (main holiday).

According to the explanatory statements to the Bill, such holiday must be placed in a concrete period. This means that the employer cannot notify an employee that the holiday will be considered as taken at an unspecified date during the compensation period.

The Bill was enacted on 25 June 2020 and Norrbom Vinding will follow up on the continued implementation and application of the tripartite agreement regarding the wage compensation scheme.

The content of the above is not, and should not be a substitute for legal advice.

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