Epidemics Act – what measures does it provide for and what about compensation for the closing of business establishments?
04/08/2020 - Reading time: 2 minutes
Both the Epidemics Act and the COVID-19 Measures Act (COVID-19 Maßnahmengesetz) provide for measures to contain COVID-19. However, there are differences in the compensation rules. Businesses affected by restrictions or closure of their establishments under the Epidemics Act must be compensated for financial losses. This claim for compensation must generally be asserted within six weeks of the lifting of the operational restriction. If the period is still running, it is advisable to submit an application for compensation in the event the business establishment had to be closed due to the Epidemics Act.
In contrast, the COVID-19 Measures Act orders that the provisions of the Epidemics Act concerning the closure of establishments do not apply if the Federal Minister has issued a statutory order under section 1 of the COVID-19 Measures Act. This provision shall enter into force retroactively from 16 March 2020. In principle, however, the Epidemics Act remains unaffected by the COVID-19 Measures Act. The intention of the COVID-19 Measures Act was probably to "lever out" the right to compensation under the Epidemics Act. Subsidies are available, for example, to companies affected by a barring order on the basis of a statutory order under the COVID-19 Measures Act. However, in contrast to the Epidemics Act, there is no legal claim to these funds.
It is questionable whether this differentiation is constitutional; individual motions have already been submitted to the Constitutional Court. In order to clarify whether compensation claims could be made, the following steps are recommended to be taken in any case by affected companies:
- Identify which restrictions ( statuory orders) apply to one’s own company; sometimes several are applicable.
- Set up a deadline management system and observe the deadline for submitting a claim for compensation.
- Prepare a statement of lost earnings.
- Take into account the “pots” from which funds have already been drawn.
With the Sixteenth COVID-19 Act, the Epidemics Act was amended once again and an authorisation to issue statutory orders was added with regard to the amount of compensation. If and to the extent necessary to ensure uniform administrative management, the Federal Minister responsible for public health may, by statutory order, issue more detailed specifications for calculating the amount of compensation or remuneration for loss of earnings.
An amendment was also made which was probably introduced due to the large number of ordinances/statutory orders already enacted on the restriction and closure of business establishments, as well as on compensation claims arising from them, if any. If the scope of application of an statutory order extends to the entire Federal Republic, statutory orders are to be issued by the Federal Minister responsible for public health. A conflicting ordinance of the provincial governor (Landeshauptmann) or of a district administration authority (Bezirksverwaltungsbehörde) shall now cease to have legal effect when the statutory order of the Federal Minister becomes effective, unless otherwise provided therein.
The amendments came into force on 15 May 2020.