This is how Europe is helping companies and workers as the coronavirus crisis deepens

von der leyen brussels

Ursula von der Leyen, on the left, and Charles Michel. Co-operators: Photographer: Etienne Ansotte European Union, 2020 Source: EC – Audiovisual Service.

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Johnny Wood, Senior Writer, Formative Content


  • People working in the gig economy may not be able to afford to follow health advice to self-isolate.
  • Some countries have changed the rules around sick pay to ensure universal access.
  • Other governments are providing loans and paying company wage bills to prevent economic collapse due to the coronavirus.

Growing numbers of workers experiencing the symptoms of coronavirus face a stark choice: self-isolate and lose income or keep going to work. So, as the COVID-19 crisis deepens, countries including Ireland, Germany and Denmark are introducing emergency measures to help.

 

While many employees receive full pay when they are sick, for workers in the so-called “gig economy” the situation can be more complicated. People on short-term or freelance contracts may not automatically be entitled to sick pay if they self-isolate, or they might only receive partial payments at less than their usual wage.

This situation – economic necessity forcing people with symptoms of the virus to attend work instead of following medical advice to stay at home – could hamper efforts to suppress the spread of COVID-19 through social distancing, which reduces contact between people, helping to avoid a sudden spike in new patients. Reducing the peak of the disease can lower the overall number of cases and cut pressure on health service resources, which can quickly be overwhelmed if large numbers of people have the virus at the same time.

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The affect mass quarantines have had on the outbreak in Wuhan and Hubei province.
Image: Statista

In China, after aggressive quarantine measures affecting 56 million people were enforced, the number of new COVID-19 infections in Hubei province – where the outbreak originated – fell dramatically, from 1,600 to just 36 a month later.

Other countries are taking note of the role quarantine could play in reducing infection rates.

Incentive for isolation

In a bid to encourage people who feel ill to self isolate, the government of Ireland has relaxed application requirements for people to claim statutory sickness benefits. The changes give everyone, including those working in the gig economy, a temporary income and incentivise them to stay at home if they have symptoms of the virus.

In addition, the usual six-day waiting period to claim illness benefits has been removed for anyone who has COVID-19 or has been advised by health services to self-isolate.

Claimants will also receive a 50% increase in their payments, rising to €305 per week. This applies for two weeks’ medically required self-isolation or for the duration of a work absence once a coronavirus diagnosis has been confirmed.

Employers in Ireland are being urged by the government to continue paying any employee who is unable to attend work or is self-isolating the difference between the newly bolstered illness benefits and their normal wages.

What is the World Economic Forum doing about the coronavirus outbreak?

A new strain of Coronavirus, COVID 19, is spreading around the world, causing deaths and major disruption to the global economy.

Responding to this crisis requires global cooperation among governments, international organizations and the business community, which is at the centre of the World Economic Forum’s mission as the International Organization for Public-Private Cooperation.

The Forum has created the COVID Action Platform, a global platform to convene the business community for collective action, protect people’s livelihoods and facilitate business continuity, and mobilize support for the COVID-19 response. The platform is created with the support of the World Health Organization and is open to all businesses and industry groups, as well as other stakeholders, aiming to integrate and inform joint action.

As an organization, the Forum has a track record of supporting efforts to contain epidemics. In 2017, at our Annual Meeting, the Coalition for Epidemic Preparedness Innovations (CEPI) was launched – bringing together experts from government, business, health, academia and civil society to accelerate the development of vaccines. CEPI is currently supporting the race to develop a vaccine against this strand of the coronavirus.

Sizeable loans

In the UK, similar temporary changes have been made to the rules surrounding statutory sick pay (SSP). Instead of waiting four days to claim, employees who fall ill with the virus can claim from the first day of their absence from work. The application process will also be easier, as sick staff no longer need to obtain a doctor’s note to apply for SSP.

While people working on temporary or freelance contracts are not entitled to apply for SSP, the application process for other state assistance has been streamlined to provide funds for people in the gig economy affected by the virus.

A hardship fund has also been set up to help local authorities support vulnerable people and households. Moves were also announced to help businesses defer payments, to ease pressure on their cash flow caused by the virus outbreak.

Germany, meanwhile, has offered companies unlimited loans to prevent them collapsing because of the pandemic. In a move designed to protect jobs and the economy, loans will be available to both small and large businesses, which will also be able to defer billions of euros in taxes.

“There is no upper limit on the amount of loans that [the state development bank] can issue,” stated Germany’s finance minister Olaf Scholz, according to the Financial Times.

Germany’s state development bank KfW has roughly half a trillion euros available to support the country’s economy, which is the largest in Europe.

Cutting wage bills

Emergency measures have also been implemented in Denmark, where companies hit by the impact of the coronavirus will receive state aid to help them continue to pay salaries.

Denmark’s government has announced moves to cover 75% of wage bills, helping companies struggling in the face of a slowing economy caused by the virus. Employees must take five days of their vacation entitlement or time off from work.

The offer lasts for three months and aims to encourage firms to send home employees rather than fire them.

Sharan Burrow, General Secretary of the International Trade Union Confederation, tweeted her support for countries offering such measures.

“Ireland and Denmark move to give workers paid sick leave #COVID19. Other governments must follow their lead and protect the health and the income of workers and their families,” she states.

Providing access to sick pay for people with the disease means more people can self-isolate without suffering economic hardship.

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