In the context of the COVID-19 crisis, the Principality of Monaco has adopted protective measures for employees. A new law dated 11 May 2020 restricts the termination of employment contracts during the COVID-19 crisis.
During the crisis period, any dismissal is prohibited, except in four specific cases. Employee terminations or redundancies are only permitted in the following cases:
1 – gross misconduct;
2 – economic reasons when redundancies were planned before the COVID-19 crisis;
3 – cancellation of the object of the employment relationship such as a closure, dissolution or liquidation of the company;
4 – employee professional insufficiency (“incapacité”)
The termination of a fixed-term contract will be possible only in the case of gross misconduct or disappearance/cancellation of the object of the employment relationship (e.g. company closure).
In any case, employers in Monaco must obtain an authorisation from the Labor Department (“Inspection du Travail”) prior to any dismissal. This new requirement is a strong protective measure in favour of employees. Employers will have to carefully justify that the dismissal is not linked to the COVID-19 crisis and is not abusive.