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Legislative changes in view of the Covid-19 pandemic (in some countries there are changes to insolvency law, tenancy law, law on consumer contracts and corporate law)

Within the last weeks, the Austrian parliament passed an abundance of new laws and legal amendments. Below you find a short overview of the most important legal innovations:

-          Corporate Law: As long as the measures to prevent the spread of COVID-19 are effective, meetings of shareholders and members of bodies (e.g. managing directors, supervisory board members, etc.) of capital companies, partnerships, private foundations, etc. can be held even without the physical presence of the participants.

Furthermore, the annual general meeting of a stock corporation can now be held within the first 12 months (instead of within the first 8 months) of the financial year.

  • Labor Law: Employers and employees (or the worker’s council, if any) can agree on short-time-work (see already above).

If a business is closed by public authorities, employees who, as a result, are no longer able to perform their work, are (at the employer's request) obliged, to consume parts of their leave entitlement and time credits during this period.

  • Insolvency Law: If an insolvency is caused by a natural disaster, like a flood, an avalanche, a snow pressure, a land- or rockslide, a hurricane, an earthquake or similar catastrophes of comparable magnitude, the period for filing an insolvency application extends from 60 to 120 days. Epidemics and pandemics have now been added to this list of natural disasters.
  • Enforcement Law: Also in enforcement law, it has now been clarified that the obligor can apply for a postponement of the enforcement proceeding, if he is facing financial difficulties because of the Covid-19 pandemic, provided that there is no risk that the creditors will suffer serious damage.
  • Financial support for entrepreneurs/companies: Austrian government created the legal basis for financial support for businesses, which are effected by the Covid-19 pandemic (grants, credits, guarantees, etc.; see above).
  • Interruption of judicial deadlines: Judicial deadlines are interrupted until April 30th, 2020 and will begin to run anew as of May 1st, 2020. 

Tenancy law has not been changed so far, but according to § 1104 of the Austrian General Civil Code, the tenant does not have to pay rent if the rented object cannot be used due to an epidemic. According to the prevailing opinion, this also applies in cases, where businesses have been closed by public authorities in order to avoid a spread of Covid-19. But be aware: Rental contracts can validly exclude the applicability of § 1104!