Categories
The Employment Contract

Force Majeure Clauses in the Employment Contract and the Coronavirus (Covid-19)

Does force majeure leave offer any relief to employees in the current Covid-19 crisis? 

Or does it create even more problems for employers who are already concerned about the many implications arising from the spread of the virus in Ireland?

Force majeure is defined as a “superior force” and is afforded statutory recognition in Irish law in the Parental Leave act 1998 as

13.—(1) An employee shall be entitled to leave with pay from his or her employment, to be known and referred to in this Act as “force majeure leave”, where, for urgent family reasons, owing to an injury to or the illness of a person specified in subsection (2), the immediate presence of the employee at the place where the person is, whether at his or her home or elsewhere, is indispensable.

(2) The persons referred to in subsection (1) are—

(a) a person of whom the employee is the parent or adoptive parent,

(b) the spouse of the employee or a person with whom the employee is living as husband or wife,

(c) a person to whom the employee is in loco parentis,

(d) a brother or sister of the employee,

(e) a parent or grandparent of the employee, and

(f) persons of such other (if any) class or classes as may be prescribed.

(3) When an employee takes force majeure leave, he or she shall, as soon as reasonably practicable thereafter, by notice in the prescribed form given to his or her employer, confirm that he or she has taken such leave and the notice shall specify the dates on which it was taken and contain a statement of the facts entitling the employee to force majeure leave.

(4) Force majeure leave shall consist of one or more days on which, but for the leave, the employee would be working in the employment concerned but shall not exceed 3 days in any period of 12 consecutive months or 5 days in any period of 36 consecutive months.

(5) A day on which an employee is absent from work on force majeure leave in an employment for part only of the period during which he or she is required to work in the employment on that day shall be deemed, for the purposes of subsection (4), to be one day of force majeure leave.

Force majeure clauses in employment contracts

Some executive type contracts of employment may contain a force majeure clause, and most employment contracts will refer to the statutory relief provided for force majeure in the Parental Leave Act 1998.

A force majeure clause will usually have the effect of suspending the obligations of one or both parties in certain exceptional circumstances. That is to say, events like storms or earthquakes or other acts described as “acts of God” may qualify as force majeure events as envisaged by the contract.

However, there is no presumption in Irish law of a force majeure event, thus the parties need to specify what events are intended to be covered by the force majeure clause. Without this clarity the clause may be unenforceable on the grounds that it is void due to the uncertainty and lack of clarity around it.

The precise scope of the force majeure provision will depend on the context in which it is used: ‘A force majeure clause should be construed in each case with a close attention to the words which precede or follow it, and with a due regard to the nature and general terms of the contract. The effect of the clause may vary with each instrument.’ (Lebeaupin v Crispin [1920] 2 KB 714)

Is Covid-19 a force majeure event?

It is worth noting that the phrase force majeure has no recognised or widely accepted meaning in English law.

The question, therefore, of whether Covid-19 is a force majeure event is a question that will almost certainly be determined by the particular circumstances of the contract and what was envisaged, what type of work was involved, whether performance of the contract was genuinely prevented by the coronavirus, and so forth.

The “force majeure event” should be defined in the force majeure clause in the contract. For example:

“Force Majeure Event” means an event, or a series of related events, that is outside the reasonable control of the party affected (including power failures, industrial disputes affecting any third party, changes to the law, disasters, explosions, fires, floods, riots, terrorist attacks and wars).

If a dispute arises, however, it is likely that a Court will interpret the clause strictly and narrowly.

Force majeure clause examples

Example 1

Force Majeure. 

Each Party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any event beyond such Party’s reasonable control including but not limited to Acts of God, fire, flood, explosion, earthquake, or other natural forces, war, civil unrest, accident, any strike or labor disturbance, or any other event similar to those enumerated above. Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the Party has not caused such event(s) to occur and continues to use diligent, good faith efforts to avoid the effects of such event and to perform the obligation. Notice of a Party’s failure or delay in performance due to force majeure must be given to the unaffected Party promptly thereafter but no later than five (5) days after its occurrence which notice shall describe the force majeure event and the actions taken to minimize the impact thereof. All delivery dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure. In no event shall any Party be required to prevent or settle any labor disturbance or dispute. Notwithstanding the foregoing, should the event(s) of force majeure suffered by a Party extend beyond a four-month period, the other Party may then terminate this Agreement by written notice to the non-performing Party, with the consequences of such termination as if this Agreement had expired (and was not terminated) in accordance with Section xxx.

Example 2

Force Majeure. Notwithstanding anything to the contrary contained herein, neither party shall be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, acts of war or terrorism, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties or civil unrest. Notwithstanding the foregoing, in the event of such an occurrence, each party agrees to make a good faith effort to perform its obligations hereunder.

Example 3

Force Majeure. A party shall not be liable for any failure of or delay in the performance of this agreement for the period that such failure or delay is

  1. beyond the reasonable control of a party,
  2. materially affects the performance of any of its obligations under this agreement, and
  3. could not reasonably have been foreseen or provided against, but

will not be excused for failure or delay resulting from only general economic conditions or other general market effects.

Notices

Each party would normally be obliged to serve some notice on the other party and inform the other party as soon as possible of the difficulty or impossibility of performing the contract and suspending it for a time.

Conclusion

A contract of employment may benefit both employer and employee by the inclusion of a “force majeure” clause. However, it is not a silver bullet solution to the Covid-19 problem facing both employers and employees in Ireland.
Here is a link to the Coronavirus guidance for employers and employees on the WRC website.

Categories
Leave and Holidays

Carers Leave, Force Majeure Leave, Parental Leave and Adoptive Leave in Ireland

parental leave

The entitlements to parental leave and force majeure leave in Irish employment law are conferred by the Parental Leave Act, 1998 and 2006. A natural or adoptive parent whose child has not yet reached the age of 8 is entitled to eighteen working weeks of parental leave.

NOTE: The law surrounding parental leave changed in 2013 thanks to a new EU directive which was transposed into Irish law. You can read about the new parental leave situation here.

The parent must have at least one year’s continuous service and the leave can be taken in one block of eighteen weeks or, with the employer’s consent, a combination of days and hours.

The parent is obliged to give at least six weeks’ notice of intention to take parental leave and it is a condition of the leave that it be used to take care of a child.

The employer can postpone parental leave for no more than six months where the leave would have an adverse effect on his/her business.

Parental leave is unpaid leave and unlike maternity leave the employee is not entitled to any social welfare payments. However employees on parental leave benefit from all other employment benefits apart from remuneration and pension benefits.

Force Majeure Leave

Force majeure leave is actually paid leave. It occurs where for urgent family reasons owing to illness or injury the immediate presence of the employee is required where the injured/ill person is.

It may be taken in respect of a child, spouse, brother, sister, parent, grandparent or person to whom the employee is in loco parentis.

Force majeure leave cannot exceed three days in any period of twelve months or exceed five days in a period of thirty six consecutive months. (Note: circular 32/2007 from the Department of Enterprise and Skills affords slightly different arrangements in the education sector in respect of force majeure leave)

Section 13 of the Parental Leave Act, 1998 sets out the entitlement re force majeure leave:

13.—(1) An employee shall be entitled to leave with pay from his or her employment, to be known and referred to in this Act as “force majeure leave”, where, for urgent family reasons, owing to an injury to or the illness of a person specified in subsection (2), the immediate presence of the employee at the place where the person is, whether at his or her home or elsewhere, is indispensable.
(2) The persons referred to in subsection (1) are—
(a) a person of whom the employee is the parent or adoptive parent,
(b) the spouse of the employee or a person with whom the employee is living as husband or wife,
(c) a person to whom the employee is in loco parentis,
(d) a brother or sister of the employee,
(e) a parent or grandparent of the employee, and
(f) persons of such other (if any) class or classes as may be prescribed.
(3) When an employee takes force majeure leave, he or she shall, as soon as reasonably practicable thereafter, by notice in the prescribed form given to his or her employer, confirm that he or she has taken such leave and the notice shall specify the dates on which it was taken and contain a statement of the facts entitling the employee to force majeure leave.
(4) Force majeure leave shall consist of one or more days on which, but for the leave, the employee would be working in the employment concerned but shall not exceed 3 days in any period of 12 consecutive months or 5 days in any period of 36 consecutive months.
(5) A day on which an employee is absent from work on force majeure leave in an employment for part only of the period during which he or she is required to work in the employment on that day shall be deemed, for the purposes of subsection (4), to be one day of force majeure leave.

Other Types of Leave

Other types of leave include

  1. Adoptive leave
  2. Carer’s leave

All of these leave entitlements, in addition to maternity leave, have slightly different requirements, entitlements for employees, and obligations for employers.

Adoptive Leave

The Adoptive Leave Acts, 1995 and 2005 provide for adoptive leave in Ireland.  A mother or sole male adopter is entitled to 24 consecutive weeks of unpaid adoptive leave. There is an entitlement to an additional 16 weeks of adoptive leave, again unpaid. There are social welfare benefits available to the employee.

As with maternity leave the employee is obliged to give four weeks written notice of taking the leave and/or returning to work.

The employee continues to accrue his/her entitlements with the exception of remuneration.

The Adoptive Leave Act, 2005 provides further entitlements to the employee including

  • Time off for pre-adoption classes and meetings
  • The postponement of adoptive leave in the event of the hospitilisation of the child.

(See also the Adoptive Leave Act, 1995).

Disputes about Adoptive Leave

Disputes around adoptive leave (save for an unfair dismissals claim as a result of the failure of the employer to allow the return to work) are referred to the Rights Commissioner service.

Carer’s Leave

Carer’s leave entitlements are granted to employees who have at least 12 months continuous service courtesy of the Carer’s Leave Act 2001. It allows employees to temporarily leave employment for between 13 and 104 weeks to allow caring full time.

Carers may be entitled to carer’s benefit and are permitted to work for a maximum of 15 hours per week while on leave.

To qualify for carer’s leave an employee will need, inter alia, a medical assessment that the person for whom he/she will be caring is in need of a full time carer. The employee’s entitlements in employment will not be affected apart from those relating to remuneration, holidays, and pensions.

Generally, the employee is entitled to return to the same position that they left. If this is not feasible, then they should be no worse off in terms of their terms and conditions of employment.

Return to work. 14.—(1) On the termination of carer’s leave in accordance with this Act, the employee concerned shall be entitled to return to work—
(a) with the employer with whom he or she was working immediately before the start of the period or, where during the employee’s absence from work there was or were a change or changes of ownership of the undertaking in which the employee was employed immediately before the absence, the owner on the expiration of the period (“the successor”),
(b) in the job that the employee held immediately before the commencement of the period, and
(c) under the contract of employment in respect of which the employee was employed immediately before the commencement of the period or, where a change of ownership such as is referred to in paragraph (a) has occurred, under a contract of employment with the successor, that is identical to the contract under which the employee was employed immediately before such commencement, and (in either case) under terms or conditions not less favourable to the employee than those that would have been applicable to him or her if he or she had not been so absent from work.
(2) For the purposes of subsection (1)(b), where the job held by an employee immediately before the commencement of a period of carer’s leave to which he or she is entitled was not the employee’s normal or usual job, the employee shall be entitled to return to work, either in that job or in his or her normal or usual job as soon as is practicable without contravention by the employee or the employer of any provision of a statute or provision made under statute.
(3) Where, because of an interruption or cessation of work at an employee’s place of employment that exists at the time of the expiration of a period of carer’s leave taken by the employee, it is unreasonable to expect the employee to return to work on such expiration, the employee may return to work instead when work resumes at the place of employment after the interruption or cessation, or as soon as reasonably practicable after such resumption.
Right to alternative employment. 15.—(1) Where an employee is entitled to return to work pursuant to section 14 but it is not reasonably practicable for the employer to permit the employee to return to work in accordance with that section, the employee shall be entitled to be offered by his or her employer suitable alternative employment under a new contract of employment.
(2) Work under a new contract of employment constitutes suitable alternative work for the purposes of this Act if—
(a) it is of a kind that is suitable in relation to the employee concerned and appropriate for the employee to do in the circumstances.
(b) the terms or conditions of the contract relating to the place where the work under it is required to be done, the capacity in which the employee concerned is to be employed and any other terms or conditions of employment are not substantially less favourable to the employee than those of his or her contract of employment immediately before the commencement of the period of absence from work while on carer’s leave, and
(c) the continuity of service is preserved.

Disputes between employer and employee in respect of carer’s leave must be referred to the Rights Commissioner service in the first instance.

You are strongly advised to seek professional legal advice in relation to any aspect of this or other employment law issue covered on this site.