Emergency situation as a ground to avoid paying salaries- legal or not?
The employment matters are among the most discussed during the declared emergency situation in Armenia. Lots of companies turned to a remote regime of work process organization in order to protect the employees from risks of getting infected, whereas many of others, like hotels, have to terminate their activities for some period of time as for impossibility to work remotely. And the emergency situation seems to be a ground for not paying salaries.
But is the virus an excuse to avoid paying salaries?
Labor Code of Armenia explains that idleness not caused by the employee at the workplace is the situation when the employer, due to production or other objective reasons, fails to provide the employee with the job envisaged by the employment contract. If the company by its own decision terminates its activities for a certain period resulting in idleness of employees, thus, becomes unable to provide them with their job, it should pay the employees ⅔ of average hourly salary for every hour of idleness.
However, how to act if the terms of emergency situation directly disallow businesses to conduct their activities? For example, how to pay salary to the employees of a shop in shopping mall, if the decision of Government directly terminated their activities for emergency period.
Labor Code answers the question, explaining that the employer shall not pay salary during idleness if it is caused by reasons considered as force majeure in the manner prescribed by the legislation of Armenia.
Though the legislation does not provide the definition of force majeure, however, from the universal analysis of the regulations we see that force majeure event is the emergency and unpredictable circumstances in the given condition beyond the party’s control which could not be expected to be taken into account at the time of conclusion of the contract and which are impossible to overcome. Law also regulates that when the state act makes the fulfillment of obligation fully or partially impossible, the obligation shall be terminated.
Thus, as far as the state act-emergency decree itself terminated the activities of certain businesses, the regulations of force majeure event will apply and release the employers from the responsibility to pay salaries.
Author: Anzhela Abrahamyan, Associate
26/1 Vazgen Sargsyan str, Yerevan 0010, Armenia
Phone: +374 11 520510
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Legelata LLC, 2020