Greatly affected by the Covid-19 epidemic, the construction sector alone accounts for 13.84% of partial activity requests according to the latest estimates of the French Ministry of Labour as at 14 April 2020.
In order to support and supervise the progress of construction sites during the state of public health emergency period, the Government as well as construction companies and public works professional bodies have undertaken to promote the implementation of practical measures, embodied in the publication by OPPBTP on 2 April 2020 of a "Guide to health and safety recommendations for the continuity of construction activities during the Covid-19 epidemic".
This guide provides a check-list of health recommendations (compulsory wearing of individual masks and glasses when impossible to respect social distancing, implementation of a CISSCT (Collège Interentreprises de Sécurité, de Santé et des Conditions de Travail, or Inter-company body for occupational health & safety) for work sites where the volume of work exceeds 10,000 people/day, etc.) and requires the formalisation of the health measures before work can resume.
Since then, a new set of general recommendations - and thus of subsidiary application - was drafted and circulated by the French Ministry of Labour on 5 May 2020, via a "National end of lockdown protocol for companies to ensure the health and safety of employees".
The protocol recommends the implementation of collective protective measures, including sequencing of activities and staggered working hours to limit the number of workers on site. It also provides for the application of a 4 m² space " gauge" for each worker in the offices (and site facilities). Lastly, it indicates the procedures for dealing with workers showing symptoms similar to those of Covid-19 (isolation in a dedicated room, involvement of the Covid-19 contact, alerting the professional medical practitioner or emergency health services depending on the seriousness of the symptoms observed etc.).
However one might question the scope of this guide, which transfers to the project owner obligations that are legally those of construction professionals and which could be used by certain companies, taking advantage of the situation, to evade some of their obligations. One might also question the scope of the protocol, as many of the provisions are unsuitable for the execution of construction works. However, the legal binding nature of the guide and a fortiori of the protocol has not been yet established.
In pursuit of the same goal, the Government also introduced various measures to restrict contractual penalties applicable to works contracts through Article 4 of Ordinance No. 2020-427 of 15 April 2020, amending Article 4 of Ordinance No. 2020-306 of 25 March 2020 as usefully indicated by article 1 of Ordinance No. 2020-560 of 13 May 2020 after a period of hesitation. Henceforth, if a works contract entered into prior to 12 March 2020 provides for the handover of a work on a date later than 23 June 2020, the penalty clause sanctioning any failure to fulfil this obligation will only take effect on a date that is postponed by a period equal to the duration of the legally protected period (i.e. between 12 March 2020 and 23 June 2020 inclusive).
One might think that the decision to take such measures is justified by the fact that no total and objective impediment seems to be able to be argued by a contractor to justify a work stoppage or delay.
Indeed, it appears unlikely that the Covid-19 epidemic as such would be considered a case of force majeure (Article 1218 of the French Civil Code) preventing the progress of construction sites. Indeed, the French courts have, up until now, taken a restrictive interpretation to force majeure, considering that various epidemics could not be qualified as such.
It is equally doubtful whether the theory of unforeseeability ("théorie de l'imprévision") (Article 1195 of the French Civil Code) - which allows a contractor to request a contractual renegotiation due to a change of circumstances, unforeseeable at the conclusion stage, having rendered its performance more onerous - can be applied to fixed-price works contracts (Article 1793 of the French Civil Code) - which implies setting a "fixed" (Cass.C., 3rd civ. Chamber, 23 November 1994, No. 93-11278) and "irrevocable" price (Cass.C., 3rd civ. Chamber, 23 May 1978, RDI 1979 obs. Malinvaud and Boubli) previously agreed - which seem to exclude its application in principle. Moreover, we note that a first judgment has been handed down to that effect (Douai Court of Appeal, 23 January 2020, No. 19/01718).
♦ ♦ ♦
The partners of Gide's Real Estate Transactions & Financing practice group are available to answer any questions you may have in this respect. You may also get in touch with your usual contact at the firm.
This legal update is not intended to be and should not be construed as providing legal advice.
>> Click here to read the legal updates of Gide's multidisciplinary taskforce set up to answer all your legal issues relating to Covid-19.