Following the rapid spread of the novel coronavirus (“COVID-19”) that was first reported in Wuhan, China at the end of 2019
the World Health Organization declared COVID-19 to be a pandemic on March 11, 2020.
The Government of Cameroon is taking immediate, significant and decisive action to help Cameroonians facing hardship as a result of the COVID-19 outbreak.
On March 17, 18 and 24, 2020, the Prime Minister announced a new set of healthy guidelines to help stabilize the spread of the Coronavirus in our country. These measures, delivered as part of the Government of Cameroon’s COVID-19 Response Plan are mainly:
Systematic closing of drinking places, restaurants and places of leisure from 6 pm;
Prohibition of human gatherings of more than fifty (50) people;
Prohibition of overloads in buses, taxis and motorbikes;
Restriction of urban and interurban travelling;
Restriction of consumers flows in markets and shopping centers;
Compliance with the rules of hygiene and the measure of social distancing decreed by the World Health Organization.
It should be remembered that the coronavirus spreads quickly in places of high human concentration, and through close contacts.
In this note, we consider how force majeure provisions in the performance of employment contracts may be engaged in the context of the COVID-19 outbreak. We also suggest steps that parties may take to safeguard their positions in view of the evolving situation.
I- WHAT ABOUT FORCE MAJEURE?
A force majeure event refers to the occurrence of an event which is outside the reasonable control of a party and which prevents that party from performing its obligations under a contract.
Included in contracts, Force majeure clauses are contractual clauses which alter parties’ obligations and/or liabilities under a contract when an extraordinary event or circumstance beyond their control prevents one or all of them from fulfilling those obligations.
Such clauses may have a variety of consequences, including: excusing the affected party from performing the contract in whole or in part; excusing that party from delay in performance, entitling them to suspend or claim an extension of time for performance; or giving that party a right to terminate. We talk principally below about parties being entitled to suspend the performance of employment contract.
II- COVID -19: A FORCE MAJEURE EVENT JUSTIFYING THE SUSPENSION OF EMPLOYMENT CONTRACTS.
Considered as an events which is outside the reasonable control of the parties affected and which deal with physical risks that might impact a business or a project, it seems fairly clear that a pandemic such as COVID-19 would be qualified as force majeure under such circumstances.
It is important to bear in mind however that the relevant force majeure event need not be COVID-19 itself. It is the consequences of COVID-19 and its impact upon the ability of the affected party to fulfil its contractual obligations that will be relevant. For instance, a highly likely scenario with COVID-19 would be the inability to perform a contract due to having to self-isolate an office or a team due to the outbreak of COVID-19 at the workplace.
Cameroonian labour code provides as a mean to manage some crisis like COVID- 19, temporal lay off which can be used by employers instead of terminate employees for economic reasons.
III- LEGAL PROVISON TO IMPLIMENT SHUTDOWN
Article 32 k of the labour code states that employment contract can be temporally suspended during a period of lay off not exceeding six (6) months.
This shall mean “the collective interruption of all or part of the work by the personnel of an undertaking due to accidents or force majeure or an unfavorable economic situation”
During this period, employees will be paid as per the guidelines of decree n ° 001 / CAB / MTPS of February 14, 1995 fixing the rates of compensation/allowance during the period of suspension of the employment contract due to that temporal lay off.
Therefore, temporal Lay off employees are entitled to the following allowances:
50% of their base salary for the first month
40% for the second month
35% for the third month
30% for the Fourth month
25% for the fifth month
20% for the Sixth month
However, depending on the policy of each companies, the workers can be entitled to more favorable conditions.
IV- PRACTICAL SUGGESTIONS FOR CLIENTS
In order to be prepared for different scenarios as the situation continues to unfold, we recommend that clients consider taking the following proactive steps:
Review your contract to determine whether the contract includes a force majeure provision and, if so:
Carefully review the definition of force majeure in that contract to determine whether there is any express event incorporating events such as COVID-19 and, if not, whether the general language is sufficient to include COVID-19 and its consequences. If in doubt, it may be helpful to seek legal advice early in the process.
Consider those aspects of the relevant contract that you are not able to perform and satisfy yourself that the inability to perform is due to the consequences (direct or indirect) of COVID-19 and not a different reason.
Consider and review what steps you are taking as a business to avoid or at least reduce so far as possible the effects of COVID-19 upon your work force and your ability to continue to perform contracts. It will be important to be able to show that you have taken all reasonable measures and followed all official guidance. Remote working and other steps such as adopting a “clean” team structure may be helpful in this regard.
Determine whether insurances, such as business interruption insurance or force majeure insurance, may cover any of the expected losses.
Intel HR Consulting takes this opportunity to reiterate, during this crisis, its desire to offer to all its clients a quality service and to assist you in this fight against the CORONAVIRUS pandemic.