In the evening edition of the Federation’s Official Gazette of March 30, 2020, the General Health Council issued a resolution by which declared the epidemic caused by CoV2 (COVID-19) as a sanitary emergency due to force majeure.

In accordance with the provisions of the publication, the Ministry of Health determined the following sanitary security measures to mitigate the spread and transmission of COVID-19:

1.Immediate suspension from March 30 to April 30, 2020, of all non-essential activities needed to face the sanitary emergency in the public, private and social sectors.

For this purpose, it should be understood as essential activities those that are directly necessary to deal with the sanitary emergency, amongst which are those of the medical, paramedical, administrative and support services throughout the public and private health sector; pharmaceutical industry both manufacturing and distribution (pharmacies); manufacture of supplies, medical equipment and technologies for health care; those for public safety; legislative activity; essential sectors for the correct functioning of the economy such as financial services, distribution and sale of energy, gas and gas stations, generation and distribution of drinking water, food and non-alcoholic beverages, supermarkets, self-service stores, grocery stores and sale of prepared foods, passenger and cargo transportation services, agricultural production, chemical, cleaning products, hardware stores, courier services, private security guards, telecommunications and media, among others.

2.Safe distancing measures are extended until April 30 for all sectors and activities defined as essential. This implies that meetings of more than 50 people should not be held and basic preventive measures must be followed such as frequent handwashing, label sneezing, no handshakes and other measures issued by the Ministry of Health.

3.Population in general is asked to observe a so-called co-responsible domiciliary isolation. This means voluntary limitation of mobility to remain in their home for most of the time.

4.Domiciliary isolation is strictly applied to those over 60 years of age or with a diagnosis of high blood pressure, diabetes, heart or lung disease, immunosuppression, pregnant women regardless of whether their work activity is considered essential or not.

5.Once the suspension of non-essential activities and the co-responsible domiciliary isolation have ended, the Ministry of Health, together with the Ministry of Economy and the Ministry of Labor, will issue guidelines for a staggered return to labor, economic and social activities.

6.Electoral processes, censuses and national surveys that involve physical interaction are suspended.

7.All measures will be done in full respect of human rights.

It is important to mention that although the declaration of sanitary emergency orders an immediate suspension of non-essential activities, the scope does not imply the legal suspension of employment relationships, so it should be interpreted that there must not be any adverse effect on the payment of salary and benefits.

The above means that no minimum wage severance will be paid as included by article 429 section I in relation with article 42 bis of the Federal Labor Law as the decree entails a declaration of a sanitary emergency as opposed to a sanitary contingency by which it becomes applicable article 427 section I of the same Law.

The possibility to negotiate with unions and / or employees and workers related to changes in the agreed terms and conditions of employment to preserve the source of employment and employment relationships exists and is recommended.

Mr. Jorge G. De Presno Arizpe and Mr. Alvaro González-Schiaffino, lead partner and partner of our ​​labor law practice group, respectively, together with our associates, are available to comment in more detail the contents of this note.

SINCERELY,

              Jorge De Presno                           Álvaro González-Schiaffino