• 25 March 2020

The Ministry of Health published a directive providing preventive measures to mitigate the health risk and effects caused by the SARS-CoV2 virus (COVID-19)

On 24 March 2020, the Ministry of Health published in the Federal Official Gazette, the "AGREEMENT establishing the preventive measures to be implemented for the mitigation and control of health risks involved in the disease SARS-CoV2 virus (COVID-19)", (the “Agreement”).

The Agreement point out that the preventive measures to be implemented by civilian and military authorities and private sector, as well as units and entities of the three government orders are aimed at social distancing in order to mitigate population transmission of SARS-CoV2 virus (COVID-19) with particular emphasis on vulnerable groups.

Some of the preventive measures provided by the Agreement, are the following:

1. To adults over 65 years of age or older and groups of persons at risk of developing serious illness and/or dying from it, avoid attendance at workplaces and full spaces or places. This group will be on a paid leave and , will enjoy their salary and other benefits permanently according to their contract.

2. Temporarily suspend school activities at all levels until 17 April 2020;

3. Temporarily suspend the activities of the public, social and private sectors involving the physical concentration and transportation of persons (until 19 April 2020). In the private sector, companies, businesses, commercial establishments and all those that are necessary to deal with the contingency will continue working, such as (not in a limited manner) hospitals, clinics, pharmacies, laboratories, media, hotel and restaurant services, gas stations, markets, provided that they do not correspond to enclosed spaces with agglomerations. Employment relationships shall be maintained and applied in accordance with the applicable contracts or General Conditions of Work, under the Federal Labor Law.

4. Temporarily suspend and until further notice from the health authority, mass events and meetings and congregations of more than 100 people;

It is important to mention, the Agreement emphasizes that, in the private sector, all companies, businesses, commercial establishments and those that are necessary to deal with the contingency will continue operating as long as they do not correspond to enclosed spaces with crowds.

The publication of the Agreement could involve a number of implications for government contracts. These include early termination of public works contracts due to the impossibility of continuing the work, the suspension of the provision of services, and even the cancellation of biddings, all due to the fortuitous events or force majeure that could involve the measures to mitigate the health risks of the SARS-CoV2 virus (COVID-19) established by the Agreement. The above, in terms of the Public Works and Services Federal Law and the Acquirement, Leasing and Public Sector Services Law.

Companies with public works contracts that are unable to continue work due to fortuitous events that could involve the adoption of measures under the Agreement, they may choose not to execute them and must ask the authority for early termination of the contract.

Conversely, it is important to inform companies with leases or services with the Federal Public Administration that the dependence or entity concerned could suspend the provision of the service arguing fortuitous events updated by the adoption of measures under the Agreement. In this case, only those services actually provided will be paid.

While the Agreement does not declare expressly the work suspension, it seeks to prevent people belonging to vulnerable groups from going to their workplaces or crowded public spaces, while respecting in any case, a paid leave and other benefits according to the ordinary employment relationship.

For more information, the Agreement could be found in the following link: https://bit.ly/3dvUS1G

In case of any inquiries about the content of this Alert, please contact:

Juan Pedro Machado Arias (juan.machado@solcargo.mx)

María del Pilar Galván Luna (pilar.galvan@solcargo.mx)

Biuludani Altamirano Magaña (biuludani.altamirano@solcargo.mx)