Is there any financial support from the European Union for companies suffering from a decline in business due to the COVID-19 crisis?
The EU provides a temporary framework for State aid paid by Member States to companies located on their territory, allowing support for the economy while limiting the disruption of competition conditions within the Single Market.
On 19 March 2020, the European Commission adopted a temporary framework allowing Member States to grant State aid to companies in accordance with the rules of the Treaty to deal with the economic and financial consequences of the COVID-19 health crisis.
In addition, on 21 March the Commission authorised the implementation of three aid schemes notified by France, which had already been announced by the Government several days earlier:
- Two schemes enabling the French Governmental Investment Bank called Bpifrance to provide state guarantees on commercial loans and credit lines for firms with up to 5 000 employees ;
- A scheme to provide State guarantees to banks on new loan portfolios for all types of companies. This is direct aid to companies, which will enable banks to provide liquidity quickly to any company in need.
Has the French government issued official guidelines specific to COVID-19 workplace contamination?
Yes. Most of the governmental recommendations relate to the general population and are inspired by the World Health Organization guidelines.
The French authorities have also issued a few general governmental guidelines specific to COVID-19 workplace contamination under the form of a Q&A document available here.
Do French employers have a general health and safety obligation?
Yes. As a matter of principle, French employers are bound by a wide and strict obligation to take all necessary measures to ensure the safety and health protection of their employees (article L4121-1 of the French Labour Code).
The violation of this obligation could trigger both a financial and a criminal liability.
Do French employers have an obligation to repatriate their French employees based in affected regions?
Yes. Based on their obligation to take all necessary measures to ensure the safety and health protection of their employees (article L4121-1 of the French Labour Code), French employers must promptly offer repatriation to their employees based in foreign affected regions, and must take drastic preventive measures concerning their employees based in bordering areas of such regions, such as extending the holiday period or prohibiting inter-provincial travels.
Expatriate employees are often employees for whom the employment contract with the home country is suspended. This could mean that the employee cannot be forced to accept the repatriation offered by the home employer.
Can an employee refuse to travel to affected regions?
Yes. French employees have a legal right to withdraw from working when facing a danger or a potential danger, and they can exercise this right without any sanction, penalty or withholding of wages (article L4131-3 of the French Labour Code).
As a consequence, not only can employees legitimately refuse to travel to affected regions, but their employers cannot require them to travel to these regions. On the contrary, an employer’s duty is to cancel or at least postpone such trips. Employers could be held liable if it appears that they tried to impose such travel on their employees.
What is the consequence of quarantine or isolation on an employee’s salary?
If the quarantined or isolated employee works from home, their quarantine status has no impact on their salary.
If the quarantined or isolated employee is put on paid vacation leave, their status has no impact on their salary.
If the employee technically cannot perform any work at home, and the employer did not offer to maintain their salary in some form, the employee can receive government compensation for their loss of salary. This right to a specific allowance is based on a regulation dated 31 January 2020, by virtue of which, under certain conditions, employees identified by the Regional Health Agencies can benefit from allowances in lieu of salary during the isolation period for a maximum of 20 days (without the usual three-day waiting period).
The company will also be required to pay additional compensation to these employees from the first day of absence, based on a regulation dated 4 March 2020.
These two exceptional measures will enable each employee concerned to receive 90% of their gross salary.
What measures should French employers implement in France to protect their employees from the COVID-19 threat?
Under French employment law, employers must take all necessary measures to ensure the health and safety of their employees, including preventive actions, training actions, and the establishment of an adapted work organisation and means. The French Employment Code specifically provides that these measures must be adapted to “take into account the changing circumstance” and “improve current situations”.
An employer’s first step should be to inform its employees of the governmental recommendations regarding the coronavirus:
- Frequent handwashing with alcohol-based soap
- Elbow coughing/sneezing
- Use of single-use tissues
- Avoiding close contact with anyone who has fever and cough
- Avoiding the consumption of raw or undercooked animal products.
Next, an employer should assess the level of risk incurred and implement additional measures accordingly:
- Increase in use of telework (which is specifically authorised by the French Employment Code in case of an epidemic threat)
- Specific coordination with the occupational doctor to handle employees who display signs of contamination (bearing in mind the employees’ privacy rights)
- Provision of disposable masks and other hygiene protective equipment or products.
What instructions should a French employer give to employees on international or domestic business trips?
During the containment phase, business travels should as much as possible be cancelled/postponed.
Employers may consequently request their employees to:
- Avoid travel as much as possible (by conducting phone or video conferences instead)
- Increase use of telework
- Wear FFP2 masks in international airports and train stations
- Practice systematic hygiene, including frequent hand washing or disinfection with hydro alcoholic gel.
Must the employer consult with the employee representatives?
Yes, especially since most prevention measures will require amendment of the company’s internal regulations, which per se requires consultation with the works council.
This consultation process also serve as a forum for the employer to inform, and be informed by, the employee representatives. It also provides an opportunity to train employee representatives so that they can efficiently contribute to safety communications and programs.
Must French employees comply with specific health and safety rules of conduct in their private life?
Yes. Although French employers are not entitled to impose rules of conduct on their employees in their personal lives, employees (as citizens) can be held liable for the prejudices resulting from their behaviour.
For example, an employee who is requested to work from home for safety reasons could be held liable if they meet with their colleagues after working hours and this gathering results in contamination of members of the staff.
Can an employee decide to withdraw from their working obligations?
Yes. Any employee may withdraw from a situation of work if they have reasonable cause to believe that it poses a serious and imminent danger to their life or health.
However, this right is limited in times of outbreak, as long as the employer has implemented the provisions of the Labour Code and national recommendations to protect health and to ensure the safety of its employees, and has informed and prepared its employees, in particular the works council.
Can employers release employees from work or put them on garden leave as a precaution measure?
Employers have the obligation to provide actual work and pay their employees, unless an employee is subject to quarantine or isolation following the issuance of a special notice of sick leave from the French Health Agency (see question 12).
However, it is possible to put an employee on garden leave (i.e., release the employee from work with salary continuance) subject to the employee’s approval. The employer should be cautious to avoid any suspicion of discrimination.
Is there state financial aid for companies suffering from a decline in business due to the COVID-19 crisis?
Yes. The government has announced business support measures (for all sectors):
- Delayed payment of social security and/or tax contributions: companies may apply for delayed payments of social security contributions by e-mail sending from their personal space on urssaf.fr;
- In the most difficult situations, direct tax remissions may be granted on a case-by-case basis;
- Support from the State and the Banque de France (credit mediation) to help companies negotiate their bank loan repayment schedules;
- Involvement of Bpifrance to guarantee bank credit lines that companies may need because of the outbreak;
- “Partial activity” allows employers to temporarily close all or part of the company or reduce working time. Applications are processed within 48 hours and the State fully reimburses unemployment hours.
- Mediation support for any conflicts with customers or suppliers;
- COVID-19 would be considered a force majeure, but only for government procurement contracts. COVID-19 is not qualifying as a force majeure on which dismissals could be based.
How can employers suffering from a decline in business or economic difficulties adapt their activity?
In the event of economic difficulties, the legal framework of partial activity allows the employer to temporarily close all or part of the company, or to diminish the duration of the work applicable in the company.
In compensation for each hour of unemployment, the employer must pay employees a minimum salary equal to 70% of their hourly remuneration.
- Informs and consults the works council and sends its opinion to the Labor Authorities up to two months after the application for partial activity
- In the absence of a works council, informs the employees of the project to set up partial activity. Information must include the contemplated estimated length of partial activity and the number of impacted employees;
- Submits its request for the administration’s authorization on https://activitepartielle.emploi.gouv.fr/;
- prior to the actual placement of employees in partial employment or within a reasonable period of 30 days after the start of such placement;
- the request is processed within approximately 48 hours.
- Displays the new working hours in the workplace;
- Submits a reimbursement claim to the « Agence de services et de paiement » still on https://activitepartielle.emploi.gouv.fr/;
- Pays a compensatory allowance to each employee for each unworked hour equal to at least 70% of the employee’s previous gross remuneration;
- When the partial activity allowance is paid, a document indicating the number of compensated hours, applied rates and sums paid for the period in question will be given to each employee;
- The employer may choose to indicate these points on the payslip;
- Benefits from a State allowance for each unworked hour of 70% of the employee’s gross remuneration, up to maximum 70% of 4.5 SMIC (SMIC is the minimum wage in France – in 2020, the minimum hourly gross wage is €10.15 – 70% of 4.5 SMIC is approximately €31.97 gross per hour).
Examples of possible requests based on exceptional circumstances such as the COVID-19 outbreak are:
- Administrative closure of an establishment
- Prohibition of public demonstrations following an administrative decision
- Massive absence of employees who are essential to the company’s activity
- Temporary interruption of non-essential activities
- Suspension of public transport by administrative decision
- Decrease in activity related to the outbreak
The government has provided for a calculation tool in order to estimate the amount of the allowance that employers can obtain and the amount of their remaining expenses. http://www.simulateurap.emploi.gouv.fr
/!\ Employees under an annual fixed-rate agreement in days worked or hours worked cannot benefit from partial activity except in the event of temporary closure of the establishment. As soon as the decree is published, these employees will be able to benefit from partial activity even if the establishment is not shut down.
/!\ Only the reduction of working hours below the legal working time (35 hours) can be compensated.
/!\ Subscription to specific commitments to maintain employment in the event of a new application for partial activity less than 36 months after previously using this measure.
/!\ This scheme can be implemented for a period of up to 6 months (this should soon be 12 months) and a quota of 1000 hours per employee.
Is the employer entitled to dismiss an infected employee?
No. Such dismissal would be deemed discriminatory by a French labour court, since the dismissal would be related to the employee’s health status. In such an instance, the employee could claim damages corresponding to the prejudice suffered.
Could the employer invoke force majeure to terminate the employment contract?
No. Force majeure is an event unforeseeable at the moment of conclusion of the contract, external to the parties and unavoidable. If these conditions are met, the employer may terminate the contract. However, these conditions are construed very strictly by French courts.
The COVID-19 crisis likely could not be construed as force majeure, since such event is not unavoidable—i.e., employees can be put to telework or in quarantine/isolation (see question 12). In addition, such dismissal could be construed as discriminatory.
Should redeployment leave be suspended due to the COVID-19 crisis period?
No. There is no requirement for the employer to accept a suspension of the redeployment leave. Employees continue to receive their redeployment leave allowance until the scheduled end date.
However, it could be envisaged to use “force majeure” with the outplacement firm, depending on the terms of the contract, to postpone the outplacement measures after the COVID-19 outbreak. This would result in a disconnect between the redeployment leave allowance and the redeployment support measures, but would avoid employees losing the benefit of the support, due to the unavailability of many services in this crisis. Employees would therefore leave the workforce and would receive their balance from all accounts on the scheduled date, but the outplacement measures would be delayed.
The outplacement measures could also be adapted (phone contact, web…).
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