Companies and the Coronavirus: information and recommendations

An epidemic, a pandemic or a health crisis is an exceptional and evolving situation during which companies must adapt. They must also take certain steps to limit the spread of the problem and as far as possible avert a major crisis situation for their organisation from a human, functional and financial standpoint.

In a series of articles available on our website, we consider a number of issues relating to the legal uncertainty created by this exceptional situation and make some practical suggestions to help you.

Our staff are ready to answer any general or specific questions you may have, whether relating to employment or contract law, insurance, company law, stock exchange law, health law, criminal law and litigation, administrative law, etc.

Our role as advisers is to provide our clients with information on any economic, political or social situation that directly affects their business. The development of Covid-19 affects all our organisations, and the purpose of this page is to provide you with information on the legal and regulatory aspects of this health crisis.

Clarification of the decree of April 24, 2020 concerning the end of the uspension of certain time limits applicable under labour law

" Remember, a month ago already, the much-commented Order of April 25,2020 on the extension of expired time limits provided for the suspension of time limits for many administrative procedures and specified in its article 9 that a special decree would determine the categories of acts or procedures for which time limits would resume.

Since then, many situations have been blocked, both for companies (e.g. application for approval of current contractual termination) and the administration authority itself (e.g. suspended deadline for companies’ reply or compliance).

After weeks of uncertainty and mixed messages from some DIRECCTE, the decree n°2020-471 of April 24,2020 derogating, in the field of work and employment, from the principle of suspension of deadlines during the state of emergency in relation to the Covid 19 epidemic, whose deadlines suspended on March 12,2020 entered into force this week end.

The purpose of this decree is to list, exhaustively, in the field of labour law, the acts, procedures and requirements whose deadlines suspended on March 12,2020 resume from April 26,2020. .../..."

The impact of Covid-19 on U.S. litigation

" The Covid-19 pandemic has severely impacted courtroom procedures and the conduct of litigation around the world. Due to the decentralized organization of the United States’ judiciary, each state and federal court in the U.S. has adjusted in various ways, including by closing courthouses or restricting their access to essential personnel, rescheduling hearings, allowing remote appearances before the judge, etc. .../..."

The impact of ordinance n°2020-306 on certain company law transactions: TUP, share capital reduction, sale of business

" The application of ordinance n°2020-306 of 25 March 2020[1], as amended by ordinance n°2020-427 of 15 April 2020[2] (the Ordinance), raises many questions about its application to certain company law transactions.

Article 2 of this Ordinance deems as having been carried out within the prescribed time limits "any act, recourse, legal action, formality, registration, declaration, notification or publication prescribed by law or regulation, under penalty of nullity, sanction, lapse, foreclosure, prescription, inopposability, inadmissibility, expiry, automatic withdrawal, application of a special scheme, forfeiture of any right", which should have been accomplished during the "legally protected period", in so far as they are carried out within the required time after the expiry of the "protected period" (and up to a maximum of two months). The "legally protected period" corresponds to the period between 12 March 2020 and the expiry of one month from the date of cessation of the state of public health emergency (the Protected Period). As it currently stands, it covers the period from 12 March 2020 to 24 June 2020 but could still change. .../..."

COVID 19 - Emergency state and labour law : update on the sweeping order of april 15,2020

" This order supplements and amends several Orders issued in recent weeks in order to specify the temporary regulations put in place in response to the state of health emergency.

Review of key labour law provisions…./..."

COVID19 - Postponement of workers' medical visits - Details on the decree of April 8, 2020.

" The Ordinance n°2020-386 of April 1,2020 adapting the conditions of health service missions during the state of health emergency provided the possibility to postpone the medical visits monitoring workers health status and that the conditions of the postponement would be clarified later in a decree.

It’s done with the publication on April 8, 2020 of the decree n°2020-410 temporarily adjusting to the state of health emergency the time frames for medical visits and exams by the occupational health services. .../..."

Private equity players: how can health and economic crisis increase the de facto management risk

" In the context of the current health, economic and social crisis, the temptation for private equity players to increase their involvement with the managers of their portfolio companies may prove to be significant. While this is in line with the legitimate desire of investors to assist their portfolio companies in managing this unprecedented crisis, in particular because the managers are facing high level of pressure, do not wish to act alone and are seeking help from their shareholders, this involvement must be properly assessed and defined in order to avoid the consequences associated with a de facto management qualification. .../..."

Recommendations provided by the CNIL’s President, who was heard by the Law Commission on April 8, 2020, regarding the tracking of individuals in connection with the health crisis.

" On Wednesday, April 8, 2020, the CNIL’s President appeared and was heard before the Law Commission of the French National Assembly about the French Government's work on the use of location-based tracking technologies.

During this hearing, the CNIL’s President indicated that the CNIL has been monitoring continuously the various tools and technologies used around the world in connection with the health crisis since mid-March. .../..."

Covid-19 : New ordinances specify impacts labour law

" Pursuant to the Emergency Law of march 23,2020 five new Ordinances on Labour Law and social security have been published this april, 2nd, 2020.

Feedback on the essential measures …/…"

Covid-19 - The holding of the collective corporate bodies’ meetings of the entities is facilitated: new rules and practical difficulties

" In the continuation of our previous article, following the publication of the law n°2020-290 of 23 March 2020 of emergency to face the epidemic of Covid-19, two orders dated 25 March 2020 concerning the functioning of legal entities and other entities without legal personality were published: (i) order n°2020-321 adapting the rules of meeting and deliberation of the shareholders and governing bodies of legal persons and entities without legal personality under private law due to the covid-19 epidemic and (ii) order n°2020-318 adapting the rules relating to establishment, closing, auditing, review, approval and publication of accounts and other documents and information that incorporated and unincorporated entities under private law are required to file or publish in the context of the covid-19 epidemic. In this context, a guide "holding the shareholders’ meeting and respecting accounting deadlines in the context of the Covid-19 crisis" was published by the Ministry of the Economy on 26 March, to assist the entities in the implementation of these rules. .../..."

Partial Activity Scheme :Relaxation of the Ordinance of march 27,2020.

" The day after the publication in the Official Journal of the decree of march 25,2020,the partial activity scheme has been softened by the Ordinance on emergency measures relating to partial activity.

The provisions of said Ordinance came into force on its publication date march 28,2020 and will remain applicable until December 31,2020 at the latest. .../..."

Data hunting, including location data, in a health crisis situation: addressing the issue of the right of individuals to privacy and the protection of their personal data

"The coronavirus crisis is the occasion to note the emergence of certain initiatives that are either legitimate and controlled or abusive and intrusive, and that come from both private entities and state authorities, involving the use, sometimes massive, of data, including personal data.

Abuses have been observed from private entities: some of them have taken advantage of the health crisis to unfairly collect personal data about individuals, by inviting them to fill out derogatory travel certificates online. The French data protection authority ("CNIL") has warned citizens against this practice, reminding them that only certificates that are available on the French government’s website are valid. .../..."

Impact of the COVID19 epidemic on commercial rents

" The emergency law no. 2020-290 to address the covid-19 epidemic issued on 23 March 2020 (the « Emergency Law ») resulted in the announcement of a state of health emergency across the entire national territory for an initial period of two months as from 24 March 2020.

In addition to several measures relating to movement restrictions of individuals, which are now firmly integrated into the daily life of the French population, the Emergency Law details the domains in which the Government is authorized to legislate in by way of directly applicable regulations or orders (ordonnances), in particular to protect public health and to address the economic, financial and social impact of the epidemic. .../..."

The French Competition Authority at a standstill, the European Commission continues its work (for the time being ?)

" By a press release of March 27. 2020, the French Competition Authority (hereinafter the “Authority”) informs companies what adjustments will be made to procedural deadlines and procedures due to the state of health emergency.

For its part, the European Commission (hereinafter the "Commission"), after a week of adaptation, has returned almost to normal activity. .../..."

COVID-19: Adjustment of the Rules of Public Procurement

" Article 11 of Act no. 2020-290 of 23 March 2020 on emergency measures to deal with the covid-19 epidemic (the "Covid-19 Act") authorises the Government to issue an ordinance within three months following its enactment in order to take all necessary measures to tackle the covid-19 health epidemic crisis. The Government is also entitled to take retroactive measures that may apply as of 12 March 2020.

With regard to public contracts, article 11 of the Covid-19 Act allows the Government to adapt by ordinance "the rules for awarding, delays for payment, performance and termination, in particular those relating to contractual penalties, set in the public procurement code, as well as the provisions of public contracts having such a purpose". .../..."

Volatility of securities, strategic assets and foreign investments

" The European Commission encourages Member States to control foreign direct investments as strategic companies are weakened by the decline of their stocks caused by the COVID-19 crisis

On March 25, 2020, the European Commission (the "Commission"), published, as announced, guidance, concerning mainly foreign direct investments ("FDI") and protection of European strategic assets. .../.."

Partial activity – the decree is finally published !

" The decree relating to partial activity has finally been published on March 25, 2020. It is immediately enforceable and applicable to the requests that has been filed - as from today - regarding the implementation of partial activity for all employees as of March 1, 2020. .../..."

The emergency law of March 23, 2020 relating to the Covid-19 outbreak has been published today: main provisions concerning employment Law

" This law expresses a state of sanitary emergency throughout the French territory for a 2-month period starting March 24, 2020.

In addition to the measures related to the limitation of circulation with which French people are now familiar, this law lists the various areas in which the government is empowered to enact bills, in order to safeguard public health and provides for economic, financial and social consequences of the Covid-19 outbreak.

Under Article 11 of the emergency law the Government is authorized during 3 months to act in order to limit the shutdown of businesses and the impact on employment, on the following : .../..."

Force majeure event: the example of supply and delivery contracts

" As Covid-19 expands and Governments take increasingly restrictive measures, particularly with regard to borders, there are questions about the foreseeable consequences for supply and delivery contracts.

Indeed, the Covid-19 pandemic, by its suddenness and virulence, could in certain cases meet the three criteria of an event of force majeure defined in Article 1218 of the Civil Code: exteriority, unpredictability and irresistibility. If the analysis of previous decisions rendered in the context of other epidemic episodes (dengue fever, chikungunya, SARS) could lead one to believe that this qualification could be rejected, its recognition by judges could on the contrary be facilitated by the novelty and scale of the crisis, as well as exceptional restrictive measures been taken (see our article on this subject). .../..."

Coronavirus - Partial activity should remain the last resort

" On Thursday, March 19th, the President Macron called on "businesses essential to our economy to continue their activity while complying with health and safety rules". He referred to "the companies' civic responsibility to continue their activity whenever possible".

The same day, this position was conveyed by the Medef (French employers’ federation) in a letter sent to all the companies' heads in France to urge them to "imperatively continue to produce during this period of containment".

Many companies have indeed contemplated applying for partial activity, particularly after the Ministry of Labor announced an extension of the partial activity scheme by decree to be published in the following days. This decree should, in particular, provide for an increase of the State's reimbursement of the indemnification paid by companies to their concerned employees. .../..."

French State support to the banking sector

" On March 16th, 2020, the French President announced, during a public conference, that a "State guarantee of 300 billion euros" program to secure loans granted by banks to companies will be set up to cope with the economic and financial crisis resulting from the Coronavirus. However, the scope and effects of this measure had yet to be defined by the French government and the French Parliament. .../..."

State of health emergency: when, why, how?

" The Council of Ministers on Wednesday, March 18, adopted three bills (an organic bill, an amending finance bill and an ordinary bill) aimed at combating the covid-19 epidemic and enabling the Government to smooth the consequences of its decisions related to this crisis in all sectors of activity in the country. These texts were subsequently handed over to Parliament.

Among the various provisions of these three drafts, the creation of a new category of state of emergency, the state of health emergency, alongside those already provided for in Act No. 55-385 of 3 April 1955 on the state of emergency (serious breaches of public order and public calamity), has given rise to many comments. It is included in the ordinary bill entitled "emergency bill to deal with the covid-19 epidemic". .../..."

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Adaptation of the rules for holding meetings of the shareholders and collective corporate bodies of legal persons governed by private law and other entities

" In view of the exceptional situation facing our country and having a significant impact in all areas, including the organization of future annual general meetings of French companies, the emergency law to deal with the Covid-19 epidemic, definitively adopted on 22 March 2020, empowers the Government to take any measure by means of ordinances:

- « Simplifying and adapting the conditions under which meetings and collective management bodies of legal persons governed by private law and other entities meet and deliberate, as well as the rules relating to general meetings. »

- « Simplifying, specifying and adapting the rules relating to the drawing up, approval, auditing, review, approval and publication of accounts and other documents that legal persons governed by private law and other entities are required to file or publish, in particular those relating to time limits, as well as adapting the rules relating to the allocation of profits and the payment of dividends. » .../..."

Respiratory and anti-projection mask: relaxation of the requisition measures on March 21st 2020

" By a decree published on March 21st 2020 in the French Official Journal, the Government relaxed the requisition regime for respiratory and anti-projection masks by excluding, to a certain extent, imported masks of the scope of the requisition.

In less than three weeks, the Government adopted successively three decrees and a ministerial order to rule the requisition of protective and anti-projections masks. .../..."

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Update on the possibility for French private entities whose business is maintained to collect personal health data as part of the fight against coronavirus – March 16, 2020

"The European Data Protection Board ("EDPB") issued a statement on March 19, 2020, in which it goes into more detail on the legal basis (Article 6 of the GDPR) and exceptions (Article 9 of the GDPR) on which data controllers (including employers) could base the processing of data, including sensitive data, in the context of the coronavirus crisis.

regard to sensitive data, the EDPB points out that private entities could base such processing operations (inter alia) on exception 9(2)(i) of the GDPR on grounds of public interest in the area of public health, based on the law of the Member State or of the European Union. .../..."

Coronavirus: How can employers best protect their employees?

The right to withdraw, protective measures, work stoppages, cancellation of travel and gatherings, etc. To help them to adapt to the impending threat of a pandemic, businesses can refer to the questions and answers published on 28 February by the Employment Ministry. They must work with staff representatives and if necessary, amend their uniform document.

Our explanations on the main questions that you may be asking as an employer :

  • 1. The scope of the risk prevention obligation
  • 2. How should risk of infection be assessed?
  • 3. How can risks of infection be prevented?
  • 4. Consider making changes to the way work is organised
  • 5. What should be done if an employee becomes infected ?

Useful links :

https://www.gouvernement.fr/info-coronavirus https://travail-emploi.gouv.fr/IMG/pdf/coronavirus_entreprises_et_salaries_q-r.pdf

Is Coronavirus a force majeure event and/or a cause of hardship?

" The coronavirus will be "considered as a force majeure event for companies", said the Minister of Economy and Finance, Bruno Le Maire on Friday 28 February. And he clarified his position regarding public contracts concluded by the State.

However, should we consider that, in internal or international commercial contracts intended to be executed in France, a party will be able to suspend or terminate its obligations on such ground?

The question is raised in the presence of large events, but also smaller events that are cancelled, in the case of current or foreseeable disruptions in supplies for companies that obtain their supplies, particularly in Asia, and in the case of reduced number of visitors to shops causing very significant drops in sales in certain regions of the world.

The companies will have to review their contracts and verify the drafting of the force majeure clause they contain, if any. Although French law provides a definition of force majeure in Article 1218 of the Civil Code, parties are free to adapt it: modification of the definition, list of examples, whether it is restrictive or not. Article 1351 of the Civil Code even provides for the case where the debtor of an obligation would have agreed to assume responsibility for the performance of the contract in the presence of a force majeure event, thus renouncing the right to rely on it, which is nevertheless relatively rare in practice. .../..."

Coronavirus: are companies insured in case of temporary business interruption ?

« The issue of covering the operating losses of French companies in a situation of temporary business interruption due to the epidemic arises whether it is due to the absence of employees since the beginning of February 2020, which impacts on productivity, or due to recent measures taken at the national and local levels, and in particular by the exceptional Council of Ministers of February 29, 2020, which requested the cancellation of all events involving more than 5,000 people in confined spaces, or the order of the Prefect of the French department of Oise forbidding any collective gathering, which generate many cancellations of professional events. But we can also cite as an indirect consequence the drop in activity that some companies will experience due to the decrease in the number of customers in stores that are not absolutely essential.

In general, businesses think that they will be covered by their insurance policy under the business interruption coverage.…/… »

Update on the situation concerning the cover for operating losses provided by insurance policies and the steps that can be taken ?

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Does the war against coronavirus justify all types of processing of personal data, especially in the workplace?

" Even in a crisis situation, any data controller should consider and ensure the lawfulness of the processing of personal data that it wishes to carry out.

The data controller may only process personal data based on one of the lawful grounds provided for by the General Data Protection Regulation ("GDPR" - Article 6) and, in case of sensitive data (such as health data), if it can rely on one of the exceptions to the prohibition on processing sensitive data provided for by the GDPR (Article 9).

Many data controllers, such as employers, wish to collect (e.g. by means of a questionnaire) personal data of any person accessing their premises (including employees, visitors, consultants, etc.) and, in particular, data relating to the dates and destinations of business and personal trips since the beginning of the epidemic, any symptoms possibly experienced by the persons concerned or their relatives (e.g. fever) or other health information. .../..."

Precisions from the French government on the economic support plan and tax moratorium further to the Covid-19

" The economic impact due to the Covid-19 is confirmed for companies obliged to close down their establishments such as restaurants, craftsmen or traders with the exception for food shops or, in the best case, to go on running their business with a massive use of short-time working.

This is why, further to the exceptional measures announced by the French Government and the President of the Republic relating to the containment and closure of most French establishments open to the public, details were provided on March 17, 2020 about these exceptional measures, including tax matters. .../..."

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Coronavirus and Public Procurement

" On 18 March 2020, the Legal Affairs Department (the "LAJ") of the French Ministry of the Economy and Finance issued a press release clarifying the conditions to use negotiated procedures without prior publicity or competitive tendering for the award of certain public procurement contracts, due to the "extreme urgency" caused by the current health crisis. The LAJ also clarified the statements of the Minister of the Economy and Finance regarding the possibility for the contracting parties to a public procurement contract to invoke the force majeure that also arises from the COVID-19 pandemic. .../..."

European competition authorities are understanding but remain firm in the context of Covid-19

" Today, every competition authorities belonging to the European Competition Network (the European Commission, the European Free Trade Association Surveillance Authority and EU/EEA national competition authorities, including the French Competition Authority) are publishing a joint statement on how applying the competition rules during the crisis. Together, authorities recognize the social and economic impact of the crisis. At the same time, they stress that the competition rules are sufficiently flexible to take account of changing market circumstances such as these and recall that they will not hesitate to take action against companies that try to take advantage of current circumstances to breach the competition rules for example by setting up anti-competitive agreements (in particular on prices or quantities) or by abusing a dominant position. .../..."

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Coronavirus – listed companies’ information obligations

" Apart from its human aspects, the effect of the current coronavirus epidemic has been the closure of certain business areas, resulting in changes to levels of production and consumption which then affect many business sectors such as tourism, luxury goods and transport.

Against this background, the French Financial Markets Authority ("AMF") published a press release on 28 February 2020 in which it reminded issuers of their ongoing information obligations, more specifically relating to their exposure to the impacts of this epidemic[1].

It will be recalled that the Market Abuse Regulation[2] requires issuers (whether listed on a regulated market or on a multilateral trading facility) to publish any inside information concerning them, that is to say any specific, non-public, price-sensitive information concerning their share price, as soon as possible. .../..."

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The Coronavirus and fake news

" « The Law of 22 December 2018 to prevent the manipulation of information is not really applicable to the prevention of the catastrophist information that is circulating here and there, particularly on social media, concerning the spread of the coronavirus, how to protect oneself against it, effective medical capabilities, the consequences of closing borders, and so on. …/… »

This law only applies during election periods; however it is intended to ensure that internet platforms contribute to “preventing the distribution of misinformation liable to disturb the peace”. Having regard to the situation and the potential risks of information overload, it is up to the prosecutor and the CSA to guard against possible “fake news” about the coronavirus.

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European Union initiatives to deal with the risk of a coronavirus epidemic.

« Par son origine, la rapidité de sa diffusion, les risques létaux qui lui " Due to its origin, the speed of its spread, the lethal risks associated with it and its impact on the economy and mobility, the coronavirus is a challenge of European dimensions, which concerns all Member States.

However, for the most part, the policies that can be applied and the measures to be put in place to deal with it are matters within the competence of Member States and not of the European Union; this puts the latter in a delicate position when dealing with a challenge that is perceived as Europe-wide and which could have a profound effect on EU policies. .../..."

Coronavirus : The first crisis tax measures for french companies before a (necessary) wider-ranging tax plan ?

"While French growth was increasing from January to mid-February, a sharp slowdown was observed as soon as the Covid-19 disease broke out and that is all the more the case since the beginning of March.

Therefore, Bruno Le Maire, Minister of the Economy and Finance, held a joint press conference on March 9th with Muriel Pénicaud, Minister of Labour and Agnès Pannier-Runacher, Minister of State attached to the Minister of the Economy and Finance, in order to precise the emergency measures aimed at French companies and more particularly at those in the most impacted sectors by the Covid-19 disease, such as hotels, catering and event companies, but also the automotive industry and air transport.

The impact of the Covid-19 disease was first of all announced as expected to be « severe » for French growth in 2020, « of around several tenths points of GDP ». An updated assessment of the Covid-19 impact on French growth will be performed on April 15th, during the presentation of the Stability Pact forecasts. .../..."

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