Although the matter is not often raised, it deserves attention, especially for individual employers, since the impact of a demise during the employment relationship can have unanticipated consequences.
It is rare, however, for this question to be the subject of any clause in the employment contract, so that very often, the heirs of the prematurely deceased employee or individual employer find themselves faced with an employment contract that remains silent on the matter.
Death of the employee
In the event of the employee's demise, the question of the continuation of the contract is naturally not at stake. However, this does not rule out the need for the employer to consider how to deliver the documents and sums due at the end of the contract.
The employer should contact the notary appointed by the estate without delay, in order to pay at least the sums due, unless they are to be paid into the account to which the employer usually paid the remuneration.
Death of the individual employer
On the other hand, in the event of the demise of an individual employer, the legal provisions applicable to the contract's expiry date will have to be considered more generally. In the absence of a specific provision governing the matter, several bases may be considered.
Does the employment contract automatically continue with the employer's heirs?
Although Monegasque law (article 15 of Law no. 729) contains provisions of public order regarding the principle of automatic transfer of ongoing employment contracts, these concern the case of employment for the benefit of the "company" only when there is a change in the latter's legal situation.
This raises the question of whether the contract may be effectively continued when the employer is a private individual.
Does the death of the employer constitute an event of force majeure putting an immediate term to the contract?
Monegasque courts have decided on this issue, concluding that the demise of the employer does not necessarily constitute a case of force majeure entailing the automatic termination of the employment contract, as it does not necessarily result in the absolute impossibility of performing the contract, which may be continued by the employer's heirs.
Consequently, if the heirs do not justify such an impossibility, the death of the individual employer cannot have had the effect of terminating the employment contract but must only be considered as a valid reason for termination (the contract then no longer being caused, so that an essential element of its existence disappears), which has to be expressly invoked to legitimize the termination of the contract.
The Supreme Court, hearing an appeal for annulment on the grounds of unconstitutionality of a law governing unfair dismissal following the initial containment measures taken to deal with the Covid-19 epidemic, also confirmed that the death of the employer was one of the grounds for terminating the employment contract considering that the cause of the contract has disappeared.
What are the practical consequences and formalities?
Monegasque law does not specify the consequences of termination of the work contract in the event of the demise of the individual employer, so that reference must be made to ordinary law provisions regarding termination contract.
Particular care must be taken when notifying termination, in terms of the termination ground given, the identity of the signatory of the termination letter, the end of contract documents and the sums paid on termination, in order to avoid any future disputes.
When the termination is initiated by the heirs (that is when the employment contract has continued with the heirs, or when the situation is due to force majeure), the heirs will be liable for the wage claims and related declarations to the social security funds, i.e. the sums arising from the performance of the contract up to the day of its termination and those linked to the termination of the contract, depending on the type of contract entered into and the reason for termination.
These issues need to be addressed all the more carefully in the case of disputed estates, as failure to carry out the required formalities could have financial consequences for all heirs.
What are the recommendations?
When the death of either party occurs, it is advisable for the survivor to contact the deceased's representatives (parents, notary, other representative), in order to facilitate the necessary proceedings and avoid delays which could only worsen the financial situation of the parties involved, be it the employee or the employer.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
