UncategorizedEmployers and employees faced to the Coronas virus

March 27, 20200

Employers and employees faced to the Coronas virus: technical unemployment, security, breach of contract, etc…

In the face of the uncertainties linked to the evolution of the Corona Virus health crisis and its economic repercussions, many companies have found themselves obliged to close their production sites or considerably reduce their volume of work. These measures have a direct impact on the financial situation of these companies and, consequently, about their employees, who may find themselves forced to leave their jobs from one day to the next.
It is in this unprecedented context that we hear more and more talk of “technical unemployment”, “breach of contract”, “employee security”… so many legal notions that need to be understood and analyzed.

Technical unemployment, dismissal? What scenarios can we consider in face of Corona Virus?

The Labour Code has regulated unemployment for economic or technological reasons in articles 21 to 21-13 without defining it.
In this respect, the legislator did not distinguish between the procedures to be followed in the event of dismissal or unemployment for economic or technological reasons, although the two concepts differ in their consequences.
It should be noted in this context that, unlike dismissal, which results in permanent loss of employment, unemployment for economic or technological reasons is a temporary suspension of work, which is termed technical unemployment.
The recourse to or the use of technical unemployment is made when temporary economic or technological causes appear, such as :

  • Temporary disruption in the supply of raw materials,
  • Temporary difficulties in marketing the products.
  • Circumstantial financial difficulties… -Special financial difficulties…

In view of the exceptional economic circumstances caused by the Corona Virus pandemic, it remains very likely that employers will dismiss some of their employees in order to alleviate the companies’ wage costs.
What then are the conditions to use the technical unemployment?

Conditions relating to employees:

Article 21 provides that technical unemployment concerns “all or part” of the “permanent staff”, and two points should be made in this regard:
-The first relates to the “collective nature” of unemployment. The first relates to the “collective nature” of the dismissal. Indeed, recourse to Article 21 and following implies that all or part of the staff concerned by the suspension of work or dismissal is involved.
The question then arises as to whether the dismissal for economic or technological reasons of a single worker obliges the employer to comply with the procedures laid down by law?

There is no unanimous answer to the question: although a literal interpretation of the text is in favor of collective proceedings, however, it would be unjust to deprive an employee of the legal protection provided by the Code, on the pretext that the damage affects only one employee. Such reasoning also allows the employer to circumvent the law by making several individual dismissals separately, thus avoiding the application of the legal regime relating to dismissal for economic reasons.
The second remark relates to the fact that technical unemployment concerns only permanent staff, i.e. employees with an open-ended employment contract (CDI).
Workers bound by a fixed-term contract (CDD), already in a vulnerable situation due to the temporary nature of their contract, will be deprived of the legal protection guaranteed by the technical unemployment scheme.

Procedural requirements:

    Sections 21 and followings of the code provide, for a number of compulsory procedures in the event of recourse to technical unemployment, which are summarized as follows:
  • Prior notification by the employer of dismissal or unemployment to the territorially competent labor inspectorate in accordance with the conditions of Articles 21 and 21-2 of the Code.
  • the territorially competent Labor Inspectorate or the Labor Inspection General Directorate, as the case may be, shall investigate the application for unemployment and attempt to reconcile the two parties concerned within fifteen days from the date of referral. The employer must then present them with all the information and documents required by the investigation.
  • Failing conciliation, the Labor Inspectorate or the Labor Inspection General Directorate shall be obliged to submit the case, as the case may be, to the Regional Commission or the Central Dismissal Control Commission, as the case may be, within three days following the completion of the conciliation attempt.
  • ailing conciliation, the Labor Inspectorate or the Labor Inspection General Directorate must submit the case, as the case may be, to the regional commission or the central dismissal control commission, as the case may be, within three days of the attempt at conciliation.
  • The Regional Commission or the Central Dismissal Control Commission shall examine the case of unemployment, in the light of the general state of the activity to which the company belongs and its particular situation, and shall propose one of the solutions provided for in Article 21-9 of the Code.
    • A review of these procedures reveals a rather complex and restrictive legal regime, raising doubts as to its effectiveness in the context of the Corona Virus: in the coming months, employers will have to provide rapid solutions to the economic emergency they find themselves in.
    • In this context of crisis, a simplification of procedures would make it easier for employers to resort to layoffs (technical unemployment).
  • Employees facing Corona Virus: what are their rights?
    As explained above, the legal regime applicable to dismissal and layoffs for economic or technological reasons guarantees rights to employees affected by these measures, including in particular:
  • the right to an end-of-service bonus, the amount of which will be discussed with the dismissal control commission. (article 21-10)
  • examination by the Commission of the possibility of employing the workers made redundant in other undertakings.
  • the right of priority employment under the same conditions of remuneration which they enjoyed prior to their dismissal; in case the company resumes its activity. (Article 21-13)

In the same context, Decree No. 2002-886 on social interventions in favor of workers, established an annual allocation to the National Social Security Fund to finance social interventions and actions in favor of workers who have lost their jobs for economic or technological reasons beyond their control.
These workers will be eligible for aid up to a maximum of six-monthly instalments of the working wage received, subject to compliance with the conditions laid down in Article 3 of the Decree.
Finally, it should be noted that, except in cases of force majeure or agreement between the concerned parties, dismissal or layoff without the prior opinion of the competent control commission will be considered abusive and therefore give the employee the right to the compensation due for abusive dismissal.


The state of play of the legislation in force on dismissal and layoffs shows shortcomings which could weaken the effectiveness of the measures likely to be taken by employers in the coming months. This might lead them to resort to other legal concepts such as termination of contract on grounds of force majeure …

The situation of workers remains vulnerable because it depends on the financial resources that will be deployed by the State to deal with the crisis.

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