Covid-19 The French Health Emergency Act
Enactement of the French Health Emergency Act
The French Health Emergency Act of 23 March 2020 (No. 2020-290) was published this morning in the French Official Gazette.
Under this Act, the Government is authorized to issue ordinances, with retroactive effect from 12 March 2020 until 23 June 2020, to take any measure to deal with the economic, financial and social consequences of the Covid-19 outbreak.
These measures must make it possible to prevent the closing down “of natural and legal persons engaged in economic activities, and associations”.
The measures covered by the Act are provided for information purposes and will be the subject of specific implementing legislation.
For better information, we have grouped these measures into 3 topics and specified, as far as possible, the practical decisions that were expected.
- Financial measures
Direct or indirect aids, in the case of “questioned viability”, in particular by:
- Cash flow support measures;
- Creation of a support “fund” financed mainly by the regions
- Employment law measures
- Partial unemployment
- Facilitating and reinforcing the use of partial activity for all companies, whatever their size, and extending it to new categories of beneficiaries;
- Improve the compensation paid to beneficiaries.
- What should be decided: 70% of the monthly gross salary within the limit of 4,5 “SMIC” (French minimal legal wage), minimum of €8,03 per hour;
- Adapt the social scheme of the allowances paid.
- Currently the allowance is exempt from social security and employer’s contributions and is subject to “CSG” and “CDRS” (French taxes) at 6.7% on 98.25% of the allowance paid. This social regime could evolve to take into account, in particular, the negative consequences in terms of pension rights due to the compensation duration;
- Promote the links with training initiatives.
- What should be decided: it is planned that the State will pay all training costs, in addition to the partial activity allowance, the employer would no longer be obliged to pay 100% of the salary;
- Alternative measures to partial unemployment
- Allowing the employer, within the framework of a industry-wide or company agreement, to impose the dates of paid leaves, within the limit of 6 working days, without notice. Days of leave already taken must be taken on the dates defined, but the employer may change the date, again within the limit of 6 working days, and without delay. The wording of the text is confusing, but we consider these two measures to be cumulative and not exclusive.
- Impose or modify, without any condition, employees’ RTT (reduction of working time scheme) days, rest days provided for in fixed agreements and rest days assigned to a time-saving account.
- Measure for business continuity
- To allow companies in sectors “of special importance for national security or for the continuity of economic and social life” (not defined but in our opinion they cover medical, food activities, energy sector ...) to derogate from the public order rules in employment and collective bargaining agreements rules relating to working hours and Sunday rest;
- For incentive and profit-sharing agreements: authorise the modification of the deadlines and the terms and conditions for the payment of the sums paid;
- For the exceptional purchasing power bonus: authorise the modification of the deadlines and the terms of payment of the sums paid (in this case, no longer making the payment of this bonus conditional on the conclusion of a profit-sharing agreement);
- Amend the arrangements for informing and consulting staff representative bodies, in particular the company employment and economic committee, to enable them to deliver the required opinions within the defined deadlines, and to suspend the electoral processes of the employment and economic committees in progress.
We will keep you regularly informed of future developments as soon as possible!
Thierry Cheymol
Employment law team
Lmt Avocats