Introduction of social measures in support of businesses facing the COVID-19 crisis

The health crisis linked to Covid-19 is exposing firms to economic difficulties which may have serious ramifications. In this context, the government’s aim is to preserve jobs, whilst reducing costs incurred by firms.

For this purpose, the government is currently carrying out necessary amendments to the partial activity mechanism already in place (1), whilst asking employers to maintain their employees’ jobs and adapt working conditions in light of recent health restrictions (2).

Payment of social charges has been postponed in order to preserve firms’ cash flow (3). With regard to disputes, those subject to employment law and social protection law have been suspended (4). Employment protection plan (PSE) procedures and collective termination by mutual consent (RCC) procedures are also impacted (5).

Lastly, on 22 March 2020, the French parliament definitively adopted a bill allowing the government, through the passing of orders, to take a certain number of measures in order to amend employment law and laws related to social security. This law was published in the French Official Journal (Journal Officiel) on 24 March 2020 (hereinafter the “Emergency Law”). The first orders were published on 26 March 2020 in the French Official Journal (Journal Officiel) (6).

1. PARTIAL ACTIVITY MECHANISM (SHORT-TIME WORK)

The developments set out in this section reflect announcements made by the government and the President of the French Republic. Conditions relating to partial activity were announced by a new decree n°2020-325, published in the French Official Journal (Journal Officiel) of 26 March 2020 and came into force the same day.

In addition, a draft order was presented to the Council of Ministers (Conseil des ministres) on 27 March 2020. The final version of the order came into force on 28 March 2020. The measures it provides for have will apply for a period to be fixed by decree later but will end at the latest on 31 December 2020.

The cost to the State of such measures is estimated at 8 billion euros, over a period of 2 months.

This “widespread” implementation of partial activity must however be seen in perspective. The most recent feedback from the authorities indicates that firms where remote working is not impossible and where barrier gestures can be implemented are obliged to resume work, unless it can be clearly demonstrated that the firm is suffering from a significant drop in activity.

Firms are therefore obliged to provide solid reasons in order to be eligible for the application of the partial activity mechanism, the current health crisis alone is not sufficient grounds. Those reasons are, in particular: the majority of employees are infected or confined and therefore forced to remain at home, the majority of employees are absent due to the suspension of transport, an almost complete absence of clients causing a drop in activity, administrative closure, etc.

The aim is to ensure that the economic health of the country is not seriously damaged. This turnaround is also justified by measures taken with regard to paid holidays and days of rest.

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  https://www.jdsupra.com/legalnews/introduction-of-social-measures-in-99945/