COVID-19: Suspension of labor contract effects due to force majeure?

Determining whether the Ministry of Labor should approve the suspension of the effects of labor contracts at this time requires understanding what force majeure means and its inherent effects. Our Supreme Court of Justice, in decision No. 86, issued by its First Chamber on July 17, 2013 (Judicial Bulletin No. 1232), reinforced by decision No. 119 of March 27, 2013 (Judicial Bulletin No. 1228), has established that force majeure consists of an event:

“(…) considered unforeseeable and unavoidable, and therefore exempting from liability, when the defendant has acted with the prudence, laws and regulations required to avoid the harm.”

What elements are necessary to consider that we are facing a force majeure situation?

Based on the decisions cited, two elements need to come together: unforeseeability and inevitability, to which we add that the situation must be beyond the control of the parties. Our courts have ruled that: “The event is unforeseeable when there is no particular reason to think it could occur; it is irresistible when it creates an absolute impossibility of compliance, not a mere difficulty.” (Decision No. 2, Supreme Court of Justice, Joint Chambers, June 8, 2005, Judicial Bulletin 1135, pp. 17-44).

Effects of force majeure on labor contracts

Under item 4 of article 51 of the Dominican Labor Code, force majeure is one of the justifying grounds for suspending the effects of a labor contract. This means that, given a scenario meeting the conditions mentioned above, the labor contract may be validly suspended, which implies that the employee would be exempted from rendering services and the employer would be released from paying wages (Art. 50 of the Labor Code), without either party incurring liability — provided the employer follows articles 55 and 56 of the Code, which require the intervention and eventual ruling, by particular Resolution, of the Ministry of Labor. It is advisable to keep two things in mind: supporting the suspension request by invoking every applicable item of article 51 along with all available evidence, and actively following up until the labor authorities formally rule on the request.

FASE program to be implemented by the Dominican State

The Dominican State has decided to launch a relief program for lower-income workers, initially limited to April and May 2020. It is intended to cover the income of workers earning a monthly salary of RD$5,000 or less. Those earning more would have 70% of their income covered up to a cap of RD$8,500 per month, provided they are formal workers registered with the Ministry of Labor and the TSS, which requires a prior request to suspend their labor contracts. At this time, the absence of decisions, lack of clarity and conflicting information in circulation — along with guidance from associations representing parts of the productive sectors and advisory firms — is creating confusion about the rollout of the government plan known as FASE. Implementation of this initiative is being reviewed and adjusted on both practical and legal levels. The ultimate goal is to bring economic relief to lower-income families for as long as this situation persists, and, where possible, to businesses affected by the extreme situation we are experiencing.

Suggestion

In the coming hours we must stay alert to bulletins and information issued by official bodies, not only to understand the options available to businesses, but also to avoid rushed decisions that could ultimately work against their interests and those of workers, who are without doubt their main asset.