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Can The Covid-19 Epidemic Justify The Termination Of An Employment Contract On The Basis Of Force Majeure?
To say the least, no one in the world had predicted the global shock produced by the COVID 19 pandemic and its global economic repercussions.
Here and there, we hear voices saying that this epidemic would undoubtedly characterize a case of force majeure allowing the termination of current contracts. Moreover, from February 28, 2020, the Minister of Economy and Finance, Bruno Le Maire, did he not declare that the Covid-19 epidemic would be "considered as a case of force majeure" for companies having concluded public contracts with the State?
However, should it be considered that force majeure may be invoked in all contracts intended to be executed in France? this is a big step, which companies would be careful not to take hastily, especially in the area of labor law.
To get an idea of the situation, it is important to return to the definition of force majeure in French law, before deciding on its application in labor law.
What is the definition of force majeure in French law?
Force majeure is defined by article 1218 of the civil code.
According to paragraph 1 of this article, "There is force majeure in contractual matters when an event beyond the control of the debtor, which could not have been reasonably foreseen at the conclusion of the contract and whose effects cannot be avoided by appropriate measures, prevents the performance of its obligation by the debtor".
Force majeure therefore allows the debtor of a contractual obligation to evade his obligation, when an event occurs which:
- Escapes the control of the debtor,
- Was unpredictable when concluding the contract,
- And the effects of which cannot be avoided by appropriate measures.
In addition, article 1218 of the civil code includes a second paragraph written in these terms "If the impediment is temporary, the performance of the obligation is suspended unless the delay which would result from it justifies the termination of the contract. If the impediment is final, the contract is automatically terminated and the parties are released from their obligations”.
A distinction is therefore made, even when force majeure is retained, between:
- Temporary impediment to perform his obligation due to force majeure, which suspends the obligation (in other words, the execution of the obligation is postponed until later, but not purely and simply erased), unless the delay is such that it purely and simply prevents the performance of the contract,
- Permanent impediment to perform its obligation due to force majeure, which will open the possibility of termination of the contract.
We therefore need to be very careful with force majeure, and carry out an analysis in two stages:
- Ask yourself in the first place whether or not the situation is due to force majeure?
- If so, ask yourself if this force majeure causes a temporary or permanent impediment to perform your obligation.
Article 1351 of the Civil Code summarizes the situation as follows: "The impossibility of performing the service liberates the debtor at due competition when it proceeds from a case of force majeure and it is final, unless that he has not agreed to take care of it or that he has been given notice beforehand".
Several jurisdictions have accepted the existence of force majeure in the context of the COVID 19 epidemic, in administrative or judicial proceedings (these are therefore not contractual situations),
- that it is an extension of administrative detention, (CA Colmar, 6th ch., ord., March 12, 2020, n ° 20/01098),
- or an absence from a hearing (Douai Court of Appeal, Order of April 23, 2020, General Directory nº 20/00632; Colmar Court of Appeal, Order of March 16, 2020, General Directory nº 20/01143, Colmar Court of Appeal Order of March 23, 2020, General Directory No. 20/01206).
In terms of professional training (and therefore this time in contractual matters), cancellations of training by an employee as well as by a training organization, occurring since March 12, whatever the cause, are justified by force majeure, according to the Ministry of Labor (Questions and answers of the Ministry of Labor on the CPF during the health crisis, version on March 17, 2020).
To our knowledge, there is not yet a court decision relating to the termination of a contractual relationship due to COVID 19.
It should be noted that even in the event of proven force majeure which is definitive, the debtor still retains the possibility of agreeing to spontaneously perform his contractual obligation, without however the creditor being able to compel him to do so.
How is force majeure in labor law envisaged?
The termination of the employment contract due to force majeure is envisaged:
- For open-ended contracts in the event of termination of the business due to force majeure, termination is then done without notice or compensation (article L.1234-12 of the French labor code) or even in the event of the occurrence of '' a claim arising from a case of force majeure (article L.1234-13 of the French labor code), termination is then accompanied by notice and compensation for dismissal.
- For fixed-term contracts, article L.1243-1 of the Labor Code provides that they can be terminated in advance due to force majeure.
- For temporary contracts, it is article L.1251-26 of the labor code which allows the temporary work agency to terminate an interim contract in advance due to force majeure, without having to propose within three days of this rupture, a new mission contract.
Can the COVID 19 epidemic justify the termination of employment contracts due to force majeure?
In terms of the COVID 19 epidemic, two distinct questions arise:
- First: Can the COVID 19 epidemic characterize a case of force majeure?
To answer this first question, you must answer the following questions:
- Is the COVID 19 epidemic beyond the control of the employer? We can without hesitation check this first box, since the characteristic of an epidemic is to escape the control of doctors, and therefore a fortiori of employers?
- Was the COVID 19 epidemic unpredictable when the employment contract was concluded? The answer to this question is undoubtedly more nuanced. From what date of conclusion of the employment contract, can we reasonably consider that the epidemic has become predictable? The date of the first Chinese statements or their dissident doctors? those of WHO? those of the French authorities? that of containment? And if we assess the situation of an employment contract concluded to be performed abroad, should we take into account the position taken by the State concerned?
- Could the employer prevent the COVID 19 epidemic by taking appropriate measures on his own? This is an essential question at a time when hospitals are unable to fully protect their caregivers and yet they are taking the most appropriate measures possible, and our leaders are failing to agree overnight, on the relevance of such and such a measure. Are we suddenly going to consider that business leaders have the capacity to take the appropriate measures, when the world's top medical authorities are hesitant about what to do? Clearly, if it were possible to take appropriate measures, the epidemic would go away on its own.
Finally, we must not forget to ask ourselves about the other possible cases of force majeure such as, for example, unilateral decisions taken by public authorities which, alone, can characterize cases of force majeure: decisions on confinement, closure borders, refusal to issue entry permits or work permits.
- Second: Assuming that the answer is yes, is the resulting impediment temporary or permanent?
It is clear that the government has increased the number of orders aimed at avoiding breaches of employment contracts, in particular by promoting the use of partial activity.
However, if the containment policy is accompanied by the possibility of placing a certain number of employees in partial activity, what solution for the others?
It therefore remains unlikely that force majeure, even if it can be recognized, can justify the termination of most permanent employment contracts. On the other hand, one can imagine that it could suspend their start of execution.
The situation is more complex for fixed-term employment contracts and temporary contracts.
An impediment to performing a fixed-term or temporary contract may be final, for example a contract which was to be performed on the occasion of a public event (show, reception, congress, etc. .) which no longer stands due to containment measures. These scenarios can particularly affect the hotel and restaurant sectors, as well as those of live shows.
Once again, it will be up to the prudential judge to assess this very delicate question of the possible application of force majeure to situations of breach of the employment contract. And the task is likely to prove difficult, in many situations, and to fuel vigorous debates in the courtrooms.
Philippe Axelroude holds a DEA in Social Law from the University of Paris I - La Sorbonne (1989). He was also auditor of INTEFP (29th promotion). He is a former member of the Council of the Order of Paris (AMCO). He is a member of the National Center for Labor Arbitration (CNAT).
Philippe Axelroude worked as an associate in the De Holmsky firm, before creating his own firm in 1995, then joining Willway Avocats in 2008, as a partner.
He is co-author of the study "Prud’homale Procedure" - (Commented form of Civil Procedure - Editions Lamy Collection ProActa). He works in social law and ethics at the Bar Training School under the jurisdiction of the Paris Court of Appeal (EFB Paris).