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Workforce Flexibility and Government Incentives in times of Covid-19 - Georgia

Short-Term Work State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

Yes

If YES on question 1, please describe which type of regulation. Please confirm if and to what extent such leave can be supported by state aid and/or other extra-ordinary governmental support.

Labor Code of Georgia (“Code”) does not envisage the right of the employer to unilaterally initiate the part-time work or the temporary leave of the employee on the grounds of the pandemic outbreak such as COVID-19.However, employer and employee may mutually agree on part-time work/temporary leave and the remuneration for such period thereof.

Additionally, the employee may take a temporary leave on the grounds that the employee is (a) infected with COVID-19; (b) in a quarantine/self-isolation.

(a) If an employee is infected with COVID-19, such employee is deemed to be in state of „temporary occupational disability“. Тhe “temporary occupational disability” is the ground for temporary leave (temporary suspension of the labor relations), if an employee obtains a medical certificate from the relevant medical establishment, proving that an employee is infected with COVID-19.

(b) If an employee is not diagnosed with COVID-19, but is in a quarantine/self-isolation, because he/she has visited a foreign country, or has had a contact with infected person, such employee may be similarly deemed to be in state of “temporary occupational disability”, if he/she obtains the certificate issued by issued by the Ministry of Internally Displaced Persons from the Occupied Territories, Labor, Health and Social Affairs of Georgia, having the same legal consequences as the medical certificate mentioned above.

(c) Similarly, a medical certificate on occupational disability can be issued to one of the parents (guardian) for the purposes of taking care of a healthy child under the age of 7, if quarantine is announced for preschool establishments or preschool aged children. The said certificate may be issued for the whole period of quarantine.

if YES on question 1, please describe which contacts that may need to be initiated with trade unions and/or works councils. Must a special process be followed?

No special regulations exist in relation to initiation of contacts with trade unions and/or work councils. See answer to the question above.

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

In order to mitigate the negative impacts caused by COVID-19, the Government of Georgia plans to implement following supporting measures to economy:

  • the banks shall restructure loans of the businesses, which may face repayment problems;
  • the citizens, who wish to postpone the payment of the loan, will be offered 3-month grace period by the banks;
  • the Government of Georgia will postpone payment of property and income taxes to the companies engaged in tourism-related activities during following 4 months (until 1 November). Such companies are hotels, restaurants, travel agencies, transportation companies etc.
  • According to the statement, the Government of Georgia will double VAT return and the Ministry of Finance of Georgia will return GEL 1,200 million to the companies until the end of the year.

Please note that abovementioned supporting measures are not yet fully implemented in laws of Georgia, therefore details of regarding the necessary prerequisites and application procedure are yet unknown. We will describe such details of one of the supportive measure which has been implemented already.

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

Co-financing Mechanism for Supporting Small, Medium and Family-Type Hotel Industry

In light of the above-mentioned supporting measures, the Government of Georgia has approved the State Program - Co-financing Mechanism for Supporting Small, Medium and Family-Type Hotel Industry.

The Program is aiming at supporting the entities of small, medium and family-type hotel industry in Georgia, who cannot pay interest accrued on the loans taken at the commercial banks, due to the circumstances caused by the pandemics of novel coronavirus.

The business entities, who wish to participate in the Program, shall apply to commercial banks.

The Program covers co-financing of annual interest accrued on the loans issued to the business entities within the framework of hotel industry, by LEPL Produce in Georgia.

Co-financing of the accrued annual interest will be calculated on the loan existed as of 1 March 2020, for the following 6-month period. Herewith, LEPL Produce in Georgia will perform co-financing as follows:

  • In case of the loans disbursed in national currency - in the amount of 80%;
  • In case of the loans disbursed in USD and EUR - in the amount of 70%;As at the time of inclusion in the Program, a business entity shall comply with other criteria listed below:
  • Amount of the loan approved by the commercial bank shall not exceed GEL 1.000.000. In case of the loan issued in foreign currency - USD 300.000 or EUR 250.000.
  • Commercial bank shall have the loan issued before 1 March 2020;
  • Purpose of the loan agreement signed by and between the business entity and the commercial bank shall be construction, extension, equipment, repairing or/and reconstruction of the hotel.

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

Please see our answer on question 2 and 3.

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 27 March 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.