In the context of the economic difficulties that employers encountered last year either due to temporary suspension of activities imposed by the administrative authorities or due to a decision taken by the employers themselves to completely discontinue certain activities in the enterprise as a last resort and due to the inability to provide employment to their staff, a substantial number of employers have resorted to termination of employment due to downtime.

In practice, it is common for employers to resort to termination of the employment due to downtime on the grounds of Article 328(1)(4) of the Labour Code, without taking into account all relevant circumstances, ‘misled’ by the fact that they are not obliged to recruit replacement staff and ensure that the employee is protected from dismissal when applying this ground.

However, account should be taken of the fact that termination on the grounds of downtime has its pitfalls, which are clearly outlined in the case law of national courts and of the supervisory authorities responsible for reviewing compliance with labour law. 

There is no doubt that prior to terminating an employment contract on this ground the employer must have first issued an order establishing the period of suspension. The order as a formal requirement for the lawfulness of subsequent dismissal is not sufficient as the suspension of operations may be due to a variety of internal, economic, production, technical or other reasons but must, in any event, be real and affect the activity of the entire undertaking, or a particular division, workshop or another structural unit of the undertaking. The reasons that may prompt the employer to suspend the operations at the undertaking are not for the court to examine beyond the assessment of the existence of an effective suspension of the activity as an objective fact, which has caused certain employees engaged in the suspended operations to be idle.

The cessation of the work of individual employees in a department or another unit that continues to operate with reduced staff and in that sense has not entirely ceased operating but handles a lower volume of work is not sufficient to proceed to dismissal on the ground in question. In this case, depending on the circumstances and the reasons that triggered the cessation of the work carried out by some of the employees of the unit, the employer is required to proceed to dismissal on other grounds that are better suited to the situation (for example, termination due to redundancy, reduction in workload, etc.).

With a view to optimising work processes at the undertaking and ensuring the continued utilisation of the employees affected by the period of suspension, the employer is entitled, subject to the requirements of the Labour Code, to assign them to the performance of other work or, if they are unable to perform other tasks, to pay them salaries during the period of suspension at the rate provided for by law.

Particularly in the situation where employees working in the unit affected by the suspension cannot effectively be assigned to perform other work, the employer is entitled to decide unilaterally to grant paid annual leave. An additional possibility to unilaterally “send” employees on such leave was provided by the law in the amendments introduced in the wake of the state of emergency declared last year and the ongoing epidemic emergency in the country.

The fact that employees are on leave – paid, unpaid, including leave due to temporary incapacity for work – during the duration of the employer’s declared work stoppage does not in itself render the dismissal unlawful. The case law now appears to be relatively unanimous on this point, which has in fact overcome the views held in the past that only the existence of an effective stoppage of work and inactivity on the part of the employee is a prerequisite for the application of the ground of termination in question. Consequently, failure to report for work due to the taking of leave during the period of suspension of activities is not a bar to the termination of the employment relationship on that ground. 

Of course, with regard to employees taking leave, it is necessary to take into account whether that leave began before the suspension or whether it continues after the suspension, in order to avoid applying this ground to employees taking, for example, long-term parental leave or the like, who in any event do not work during the period in which the suspension actually occurs and are not effectively affected by it.

The case law also holds that it is sufficient for the lawfulness of the dismissal if the effective suspension of the whole or part of the undertaking has lasted for at least 15 working days, irrespective of whether the suspended activity had already resumed at the date of termination. There is also no obstacle to the termination of an employment contract where the activity which was initially suspended is permanently discontinued. In that case, the employer undoubtedly has other grounds for termination in addition to the grounds mentioned, for example, closure of part of the undertaking, redundancy.

Notwithstanding the existence of a relatively uniform opinion of the courts on a number of issues concerning the factual circumstances on which the existence of a cessation of activity as a ground for termination of the employment relationship is argued, there are also hypotheses in which a different interpretation may be given by the courts in litigation.

Therefore, the correct application of the ground for termination, the prerequisites for which are set out in Article 328(1)(4) of the Labour Code, requires an analysis of the specific facts in the context of the reasoned opinions expressed in the acts of the courts and supervisory authorities, in order to assess whether the existence of the ground in question can be sufficiently justified in the particular case.

Such an analysis is also necessary in order to avoid possible abuses by employers, which would undoubtedly have negative consequences for both parties to the employment relationship.

Radost Georgieva