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COVID-19 and Continued Activity

Reconciling Economic & Regulatory Imperatives

27/04/2020

Governmental intervention in the management of dismissals, work organisation and other measures

Information on the latest employment measures envisaged by the Monaco Government

On 24 April 2020, Monaco Government filed bill No 1014 "prohibiting unfair dismissals, making teleworking compulsory in jobs that allow it and introducing other measures to deal with the COVID-19 epidemic".

This bill contains provisions of utmost importance in employment matters as regards conditions of performance and termination of employment contracts during the health crisis.

Our Employment team summarises below the provisions that will have to be complied with by employers, should the bill be voted as it stands, which may well be the case very soon.

With regard to the performance of the employment contract (article 4 of the bill) 

The proposal made to employees to work remotely would remain mandatory until 18 June 2020:

  • in all cases where the nature of the employee's activity is compatible with this type of work; and
  • if the employer "is able to provide the necessary technical means".

Failure to comply with this obligation may lead to criminal sanctions.

It should be noted that, in practice, the mandatory nature of the proposal to work remotely could, however, come up against the requirement to obtain the employee's approval, which has been maintained in the bill. Working in the employer's premises also raises a number of issues with regard to the work conditions to which it is subject.

With regard to the rules applicable to the termination of employment contracts (articles 2 and 3 of the bill) 

Grounds restrictively allowed

The text limits the grounds for dismissal (for permanent contracts) and early termination (for fixed-term contracts) on which the employer could rely during the health crisis and subjects their implementation to the prior approval of the Labor Inspectorate.

Thus, from the entry into force of the text and until the end of the period referred to in article 3 of Act No 1.485 of 9 April 2020 (i.e., to date, 18 June 2020), only the following types of termination of contracts may be "pronounced or notified":

  • dismissals on grounds of serious misconduct on the part of the employee;
  • redundancies "planned and initiated" prior to the health crisis;
  • dismissals on grounds of "disappearance of the object of the employment relationship"; or finally 
  • dismissals in the event of definitive unfitness of the employee and impossibility of reclassification.

With regard to the termination of fixed-term contracts, these may only be considered in the event of: 

  • serious misconduct on the part of the employee; or
  • disappearance of the object of the employment relationship. 

Prior approval of the Labor Inspectorate

In addition, the notification of dismissals or early dismissals envisaged by the employer on grounds restrictively listed in the text, will be subject to the prior approval of the Labor Inspectorate, which will have to ensure that the dismissal envisaged is not related to the health crisis. 

To this end, the Labor Inspectorate will have a time period of 14 days, which may be extended, to study the file and notify the employer and the employee of its decision. 
 
Again, failure by the employer to comply with these provisions may lead to criminal sanctions.

Entry into force

Finally, a clarification of interest brought by the bill: the provisions it contains will be enforceable against employers only from their entry into force (i.e. the day after their publication in the Official Journal).

No retroactivity is therefore envisaged, contrary to the wish expressed by the Conseillers Nationaux (the Monaco Members of Parliament) in the draft bill No 249 adopted by the Assembly on 6 April, a text on which we did not communicate due to the substantial amendments it required in light of the legal uncertainty that it would have led to. 
 
In the current state of bill No 1014, redundancies notified before the entry into force of the Act, if it were to be adopted as it stands, should not be affected, either in their effectiveness or in their performance conditions, by these new provisions. 
 
Dismissals notified under the Ministerial decision of 1 April 2020 would thus remain subject to the provisions of the latter and dismissals pronounced prior to this decision would be governed solely by the legal provisions in force on the date of their notification.

While this draft law seems to reconcile the Monegasque Government's desire to implement exceptional measures in light of the current health crisis and the need for legal certainty in which the normative power must continue to be exercised, it does not fail to raise legal and practical questions for employers, particularly with regard to the need to reconcile regulatory imperatives and economic challenges. 
 
It should be put to the vote very soon. 

Authors

The picture of Sophie Marquet
Sophie Marquet
Avocat Associé | Partner
Monaco
The picture of Florence de Guzman de Saint Nicolas
Florence de Guzman de Saint Nicolas
Senior Associate
Monaco
The Picture of Sophia Bernardi
Sophia Bernardi
Middle Associate
Monaco