Legal Insights

One of the Ordinances adopted in furtherance of the Emergency Law of March 23, 2020 to deal with the Covid-19 epidemic provides – for a limited period of time – for (i) the suspension of the effects of clauses sanctioning contractual non-performance, and (ii) the extension of contractual deadlines for the termination or renewal of contracts.

How long does the suspension period last? Which contracts are concerned? What happens with periodic penalty payments and clauses aimed at sanctioning non-performance?

The current Covid-19 pandemic is affecting many economic operators operating in a variety of industrial sectors and raises questions about their ability to meet their contractual obligations.

While some wonder about the mechanisms that could be invoked to escape or adjust obligations, the performance of which has become difficult, excessively expensive or even impossible, others would like to block the implementation of such mechanisms.

The possibility for an economic operator to evade compliance with any of its obligations, to adapt it and, more generally, to be exposed to the risk of being held liable in the context of the current pandemic must be analyzed in the light of the contractual provisions and the specific features of the relationship.

More than a year after the Take Eat Easy decision in which the Labor Chamber of the Cour de Cassation (French Supreme Court) had for the first time ruled on the legal classification of the contract between a deliverer and a digital platform and recognized the existence of an employment contract, it recently took position once again on the issue of platform workers, this time in a case concerning the very famous company Uber.

The Labor Chamber reiterated its position in a decision dated March 4, 2020 and upheld the ruling of the Paris Court of Appeals of January 10, 2019: the contract between Uber and its 28,000 drivers in France is to be analyzed as an employment contract!

The Emergency Law to deal with the Covid-19 epidemic empowers the Government to take, by means of Ordinances, the adaptation measures intended to put in place health emergency arrangements.

As a result, the Government adopted 25 Ordinances on March 25, 2020. In judicial matters, several Ordinances were issued to govern the organization of courts and procedures during this crisis.

Regarding specifically the rules of civil procedure, two Ordinances have been adopted and have a significant impact on (i) applicable time-limits and the conduct of civil proceedings, and (ii) the organization/operation of courts ruling in non-criminal matters.

Three Ordinances on labor and employment matters adopted in furtherance of the emergency health law to deal with the Covid-19 pandemic were published in the Official Gazette on Thursday March 26, 2020.

These Ordinances concern (i) derogations, subject to certain conditions, regarding paid vacation, working hours, rest days and work on Sundays, applicable until December 31, 2020, (ii) extension of the deadline for payments under mandatory and optional profit-sharing schemes to December 31, 2020, and (iii) extension of the scope of employees eligible for the supplemental allowance paid by the employer in the event of medical leave until August 31, 2020.

In the context of the coronavirus health crisis, an emergency health law to deal with the covid-19 pandemic (the “Law”) was definitively voted on Sunday March 22, 2020 and published in the Official Gazette on March 24, 2020.

The Law empowers the Government to amend, by means of Ordinances and within 3 months from its publication, any measures in order to deal with the economic, financial and labor-related consequences of the spread of the pandemic, in particular with regard to labor law and social security.

The Law indeed includes a whole set of measures that are aimed at adapting labor law and that are of direct interest to employers.