At the meeting of the National Council for Tripartite Cooperation (NCTC) on October 1th, 2021, the Union for Private Economic Enterprise (UPEE) supported the proposed measures to support business to maintain employment in connection with the Covid-19 crisis. The President of the organization, Mrs. Violina Nakova, underlined the need to ensure predictability for business in terms of support measures, including employment retention, because the lack of predictability has become one of the biggest challenges for all businesses in time of the Covid-19 crisis. According to this, a format of interaction of the social partners should be sought at an earlier stage in the development of measures so they can be timely and adequate to the current economic situation.
During the meeting, the draft normative acts for two measures were discussed – the measure “60/40” and the measure “Keep me +”.
The Union for Private Economic Enterprise supported the draft Decree of the Council of Ministers amending Decree № 151 of the Council of Ministers of 2020 on determining the terms and conditions for payment of funds for maintaining the employment of employees after the state of emergency declared by a decision of the National Assembly of 13th March 2020, and the extraordinary epidemic situation declared by Decision № 378 of the Council of Ministers of 2020 ( measure “60/40” ).
The organization consistently maintains its position that business support needs to continue not only until the end of 2021, but also with a horizon of 2022 in the context of the Temporary Framework for State Aid to Support the Economy in the Current Covid-19 Epidemic – from March 20th, 2020. This position is based on the analysis of the effects of the measures applied so far to overcome the economic consequences of the crisis, which show stabilization of the labor market during the crisis and some positive dynamics towards its full recovery in the summer months. .
Unfortunately, with the introduction of the new restrictive measures by the Minister of Health, providing for a stronger restriction on the implementation of certain economic activities and the complete cessation of other economic activities, the pressure on the labor market will increase. This requires the continuation of employment support measures.
Additional increased pressure on closed and restricted sectors requires differentiation of support. The organization stated its firm position that a differentiated approach is needed with regard to another business activity – passenger bus urban and suburban transport . Urban and suburban passenger transport services operate on a schedule regardless of the number of passengers on the specific course. They form fixed costs (including for staff that cannot be reduced), which cannot be reduced, even though passenger traffic has decreased. These carriers also perform the so-called “Public service” for the carriage of preferential prices to certain categories of passengers – pupils, students, pensioners, which further negatively affects their sales revenues. Therefore, in this business, a decrease in sales revenue of more than 30%, which is the minimum eligibility requirement under measure “60/40”, mean bankruptcy.
The Union of Private Economic Enterprise has proposed a differentiated approach to the transport sector affected by the crisis by developing a stand-alone measure to support employment in the sector.
In case such a measure cannot be provided by the state budget, the UPEE made an alternative proposal – the activity of bus passenger urban and suburban transport from economic activity 49.31 “Passenger urban and suburban transport” to be included in the scope of Art. 1, para. 1, item 5 of the Council of Ministers № 151/2020, as well as with regard to it to provide a differentiated requirement for a decrease in sales revenues by not less than 20 per cent.
The Deputy Prime Minister, Mr. Galab Donev, undertook to develop an independent measure for urban and suburban passenger transport with a budget of BGN 15 million to support this economic activity in the context of the Covid-19 crisis.
The Union for Private Economic Enterprise also supported the submitted draft Council of Ministers for determining the terms and conditions for payment of compensation to employees on unpaid leave, and to self-insured persons insured in economic activity, for whom temporary restrictions have been imposed by a state body. their period of declared state of emergency or declared state of emergency ( Save Me + measure ).
The organization assessed as a positive step, which the UPEE insists on from the beginning of the Covid crisis, the inclusion in the support mechanism of the self-insured persons under Art. 4, para. 3, item 1 and item 2 of the Social Security Code, namely the persons registered as exercising a free profession and / or craft activity and the persons exercising labor activity as sole traders, owners or partners in commercial companies, the natural persons – members of impersonal companies and the persons who are taxed by the order of art. 26, para. 7 of the Personal Income Tax Act.
According to the experts of the organization, the suspension by the Minister of Health of holding all mass events, such as music and other festivals, fairs, folklore initiatives and others of such nature, significantly affects the activities of craftsmen from the group of folk arts and crafts. of this type of events, which makes it mandatory to include them in the support mechanism.
At the same time, a large part of the micro enterprises in the sectors, whose activity is suspended or limited by the order of the Minister of Health, are registered and carry out activity as sole traders or are working owners of micro and small commercial companies, which are not employed. and the only personal income that these persons receive is from their activity as working sole traders or working owners of commercial companies. For these people, the draft Council of Ministers also provides support under the measure “Keep me +”.
It is important for all employers from sectors whose activity is limited by the order of the Minister of Health that the granted support will not be included in the regime of Commission Regulation (EU) № 1407/2013 of 18.12.2013 on the implementation Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid.
The Union for Private Economic Enterprise insisted that the envisaged obligation of the employers to keep the employment of the compensated PMS under the proposed procedure, and the compensated self-insured persons to keep their activity for a period not less than the period for which they were paid compensation should be abolished or the period of employment retention will be reduced, resp. the activity. According to Mrs. Violina Nakova, the lack of predictability in the course of the health crisis, and hence the economic crisis, prevents some categories of employers and self-employed persons from taking advantage of the measure precisely because of the existence of this condition. In addition, the mechanism is compensatory in nature and should not provide for additional obligations for employers.