Part 1. The entrepreneur's situation in the face of the coronavirus pandemic.

Ladies and Gentlemen ,
in view of the situation in our country related to the spread of the SARS-CoV-2 virus, the Minister of Health, by the regulation of 13 March 2020, introduced a state of epidemic threat in the territory of the Republic of Poland.

Since the decision of the Minister of Health has a direct impact on our rights and obligations, and therefore on the functioning of each of us, it is worth presenting the legal consequences of the above-mentioned state of epidemic threat and the resulting effects on everyday life.

Issues related to the state's anti-epidemic activities are regulated by the Act of 5 December 2008 on the Prevention and Control of Infections and Infectious Diseases in Humans. This Act grants specific powers to individual administrative bodies, including the ability to issue specific restrictions, orders, and prohibitions, thus imposing obligations on the addressees of the law, namely us as citizens: individuals, but also all entities conducting business activities, i.e., legal entities.

Pursuant to Article 46, Section 4 of the aforementioned Act, the Minister of Health is authorized to introduce, among others: restrictions on the manner of movement, restrictions or prohibitions on the trade or use of certain items or food products, restrictions on the operation of institutions or workplaces, a ban on organizing shows and other gatherings of people, an obligation to perform certain sanitary procedures if their implementation is related to the operation of production, service, commercial or other facilities, as well as an order to provide access to real estate, premises, areas and means of transport for anti-epidemic activities provided for in anti-epidemic plans.

The regulation introduced:

1. From March 14, 2020, until further notice, there is a state of epidemic threat in the Republic of Poland due to SARS-CoV-2 virus infections.
2. The obligation to provide a border guard officer with information about the address of residence or place of stay, contact telephone number and the obligation to undergo a 14-day quarantine when crossing the state border.
3. A temporary restriction on business activity has been established:
   
   1. related to the organisation, promotion or management of events such as fairs, exhibitions, congresses, conferences, meetings, including activities consisting in the management and provision of staff to service the areas and facilities where these events take place;
   2. related to the consumption and serving of beverages;
   3. catering and entertainment in shopping malls.

However, as the epidemic threat increases, the Minister of Health, pursuant to Article 46a of the aforementioned Act, may, by way of a regulation, introduce, at least temporarily, restrictions on certain scopes of entrepreneurs' activities, as well as rationing the supply of certain types of items, or even restrictions on the use of premises or areas and the obligation to secure them.

In practice, the above means that there may be restrictions on certain types of activity, as is currently the case with the catering, entertainment and trade industries, but also restrictions on freedom of movement, which currently apply to air and rail transport.

It is therefore worth knowing that the actions of state services in this respect are fully legitimate, and therefore we are obliged to comply with such restrictions, as well as with all individual decisions of authorized administrative bodies.

It should be emphasized here that, due to the dynamics of the epidemic, the legislature has stipulated that these provisions will enter into force on the date of their publication , and therefore, from that moment on, they will apply to all of us. As the Senate and the Bar Association have proposed amendments to the draft bill, we will keep you updated on their possible adoption.

At the same time, we would like to emphasize that any property damage resulting from the actions of administrative bodies, including legal actions, should be compensated by the State Treasury through fair compensation. Should such an eventuality arise, we remain at your disposal.

If you have any further questions, please contact us:
Trainee legal counsel Izabela Cybul: i.cybul@kglegal.pl • +48 502 469 739
Trainee attorney Michał Świętosławski: m.swietoslawski@kglegal.pl • +48 22 856 36 60

Part 2. How to protect yourself from problems with your company's current operations?

Doubts arise, in particular, regarding the performance of contractual obligations. The Polish legal system recognizes the concept of force majeure (vis maior), which is defined in case law as unforeseeable, external in nature, and resulting in consequences that cannot be prevented.

When concluding a contract, pay attention to the wording of the clause concerning force majeure and its consequences for the contract.
The current situation is not the only one in which it may apply.

The current situation meets all the criteria outlined above. This was further legally confirmed by the Minister of Health in the Regulation of the Minister of Health of March 13, 2020. Businesses should pay attention to the contractual provisions regarding liability for the effects of force majeure in their contracts. It is worth examining the issues related to mutual obligations and ascertaining whether taking additional action would be justified in the current situation. Contracts typically stipulate, in the event of a force majeure event, that the contractor be informed of the impact of the force majeure on the performance of the obligation.

If you are having trouble meeting your obligations, it is worth collecting evidence to support your claims about the difficulties you have encountered.

In the absence of a contractual provision regarding force majeure, it is possible to invoke the provisions of the Civil Code. If you are affected by this situation, we recommend immediately initiating discussions with your business partners regarding current and past possibilities of fulfilling your mutual obligations.

What to do?

• review the contract provisions regarding force majeure clauses,
• ensure contact with the contractor and fulfillment of mutual obligations,
• document the impact of force majeure on the current functioning of the enterprise,
• determine what we can do in light of applicable regulations,
• monitor the situation in the country on an ongoing basis,
• beware of "fake news".

If you have any further questions, please contact us:
Attorney Mateusz Grosicki: m.grosicki@kglegal.pl • +48 506 367 109
Attorney Trainee Anna Zaleska: a.zaleska@kglegal.pl • +48 22 856 36 60

Part 3 Annual meetings of housing communities

Pursuant to Art. 30 of the Act of 24 June 1994 on Ownership of Premises (Journal of Laws of 2019, item 737, as amended), annual reporting meetings of housing communities should be held by the end of March of the current year. Furthermore, information about the date, time, place and agenda of the meeting should be provided to the owners of the premises at least one week before the planned meeting. This means that the community boards have already sent or intend to send notifications of such a meeting in the near future.

However, due to the introduction of a state of epidemiological threat in the Republic of Poland and the recommendations of the Chief Sanitary Inspector to avoid large gatherings, it will not be possible to hold meetings within the legally mandated timeframe. It should also be noted that many annual meetings are often held in school buildings or university classrooms, which will be closed until at least March 25, 2020.

So what should housing association boards do in this situation?

In the Office's opinion, housing association meetings scheduled during the state of epidemiological threat should be postponed. The Ministry of Development also expressed this sentiment in a press release dated March 13, 2020.

It should be emphasized that adopting a resolution at the annual meeting at a later date will not invalidate these resolutions. The sanction for failing to convene a meeting on time is that this right is transferred to each member of the housing community. It appears that, given the current state of epidemiological threat, no community member will convene such a meeting.

In cases where the community board has already entered into agreements related to the organization of the annual meeting of the housing community (e.g., renting a room), we recommend terminating or amending the agreement, specifying that after the epidemiological threat has passed, the parties will establish a deadline for fulfilling such obligation. In our opinion, force majeure clauses will also apply in the current situation (see Part 2 for more details).

The current situation suggests that it may be time to consider conducting community meetings remotely via electronic means, for example, as an online video conference where property owners can freely express their opinions or ask questions. Housing communities are already using IT systems to conduct voting, replacing or in addition to the so-called circular voting system. Such solutions can be useful not only during times of epidemiological threat but also for increasing attendance at meetings.

The legislature does not explicitly specify the format in which annual meetings should be held. Therefore, in the Office's opinion, housing communities would need to adopt a resolution allowing participation in the annual meeting via electronic means. Additionally, such a resolution should specify, among other things, the method for verifying the identity of those participating in the online meeting and the method for collecting and counting votes (primarily in the case of secret ballots). This seems like the right time to engage in discussion on this matter.

If you have any further questions, please contact:
Attorney Dr. Joanna Barzykowska: j.barzykowska@kglegal.pl • +48 502 677 504
Trainee legal counsel Aleksandra Jastrzębska: a.jastrzebska@kglegal.pl

Part 4. Employer and Employee Rights in Connection with the Introduction of an Epidemic Threat.

What rights does an employer have?

The employer may instruct an employee to perform remote work, i.e. to perform duties arising from the employment contract for a specified period of time, outside the place of permanent performance (Article 3 of the Act of 2 March 2020 on special solutions related to the prevention, counteraction and combating of COVID-19, other infectious diseases and crisis situations caused by them (Journal of Laws of 2020, item 374). In such a situation, the employee performs their duties under the existing conditions, with the difference that in a place other than the one specified in the employment contract. In order to use the remote work order, we recommend that clients provide employees with written instructions to perform remote work or an appropriate order in the event of the introduction of remote work for the entire workplace.

Furthermore, it should be remembered that an employer has the right to entrust an employee with work other than that specified in the employment contract for a period of up to three months in a calendar year. This right arises from Article 42 § 4 of the Labor Code and may be exercised, for example, in a situation where the employer's activities have been restricted to prevent the occurrence of coronavirus infections by decision of the state authorities.

What rights does an employee have?

For employees with small children, if the child's nursery, children's club, preschool, or school is closed, the employee who is excused from work due to the need to personally care for the child is entitled to an additional care allowance for up to 14 days. This applies to employees caring for children under the age of 8. To do so, a declaration must be submitted to the employer.

However, if an employee is quarantined or isolated by decision of a sanitary inspector, the employee is entitled to sick pay and then sickness benefits.
Currently, lawmakers are developing a package of legal changes that will impact the situation of employers and employees. Announcements include deferring the payment of social security contributions and introducing solutions for businesses forced to suspend operations.

If you have any further questions, please contact us.

|