THE IMPACT OF THE EXCEPTIONAL PAID LEAVES ON THE EMPLOYERS

According to the recent regulations to fight the spreading of Covid-19, all operators must keep indemnified their employees and if still possible, can maintain the execution of their other labor contracts. Indeed, with the urgent aim to protect employees from hardship, provisions of article 6 of the Decree 20-69 extended to private commercial operators by article 15 of Decree 20-70 are likely to restrict the employer’ both right to invoke force majeure and to implement certain RH policies. In addition to cash flow issues, employer is then refrain to suspend labor contract execution. Thus, Government should promptly clarify the scope of these measures but also the legal framework to compensate employers.

The limitation of HR policies to mitigate Covid-19 economic impact.

Since the Decrees seem to provide general and unlimited rights to employee, the scope of HR policies is likely to be very limited.

In fact, under combination of the Decrees at least 50 percent of the employees are granted with exceptional paid leaves.

On the second hand, other employees must execute their work in compliance with mandatory HSE regulations at work site or by teleworking. Conversely, exceptional paid leaves should be extended up to all workers if the labor contract cannot be performed for any whatsoever reason (teleworking impossible, activity prohibited logistic issues).

Here, it is unclear if the Decrees prevent the application of usages or conventional solutions or not (annual paid leaves, unpaid leaves, remaining leaves, suspension of contract with minimum wage, collective agreement…) Furthermore, under both the labor law principles of non-discrimination and protection of the Acquired Rights, it is unlikely that employees can be granted with a less favorable right or compensation.

Indeed, HR policies can be challenged where less favorable rights and/or solutions are agreed with employees. Thus, employer must ensure the compliance of RH.

The restrictions of the employer’s right to invoke force majeure

According the theory of force majeure, any unforeseeable and irresistible event leading to the impossibly to perform a contract, set aside the liability of the non-performing party.

Although the Government neither the Labor Law consider the Covid-19 pandemic as force majeure yet, the under the Civil Code, the parties to a labor contract are able to invoke force majeure in some cases.

Nevertheless, here, the obligation to put employee in exceptional leaves is deemed to impede the employer to invoke lawfully force majeure and then not pay employees wages.

In fact, the contradiction of the Decree provisions with the theory of Force majeure may lead to uncertain outcome in case of trial dispute. Equally, according the general theory of compensation, the obligation of compensation does not apply where the damage is beyond the party control.

Thus, even if in certain case force majeure may prevent to pay salaries, the Decree compels employers to pay wages even if no work nor any consideration is provided.

The future compensation of the employer by the State.

Nevertheless, the government already undertook to indemnify employer for such losses; Article 16 of the Decree 20 70 provides that the modes of compensation of eventual prejudices caused by the implementation of the prevention’s measures shall be subject to further regulations.

However, it is still unclear what type of prejudice shall be in the scope of the right to compensation. Equally, how the employer must show the suffered losses. In addition, it still undecided by which means the damages shall be compensated (tax deduction?).

Here, the 14th April the Ministry of Labor made a statement to help employers not yet confirmed by a decree. It provides the suspension of the social contribution payment for directors and workers but also the application of some penalties for the delays. Also, the related periodic statements are postponed from 30 (CNAS) and 90 CASNOS days. In brief, such actions are not about compensation but rather facilitation.

Finally, it is still unclear what will be the fiscal and social treatment of exceptional leaves. Indeed, the right of exceptional compensation is due until the 19 April under Decree 20-86. Thus, it is highly required to track and identify all the information in order to be able to draft promptly a formal compensation request.

PRACTICAL LEGAL GUIDE

" Doing business in Algeria 2019"

Provide you with an overview of the applicable legal framework in Algeria for international business transactions

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