Legal Update

Company Law

On 28 May 2020, Law 27-20 providing for specific provisions relating to joint stock companies, mainly to allow for the general assemblies and meetings of board of directors to be held through video-conference or equivalent means despite the absence of such provisions in the by-laws.

Labor Law

  • On 1st July 2020, entry into force of the second raise of the minimum wage provided for by Decree n°2-19-424 to MAD 14.81 per hour.

  • On 23 July 2020, Decree n°2-19-793 providing for additional extraordinary cases allowing for the conclusion of fixed term work agreements:

Temporary works not part of the normal activity of a company;

Temporary works or projects not exceeding one year (twice per the same employer);

Temporary works or projects exceeding one year (once per the same employer);

Employing employees of more than 58 years old who had previously lost their job;

Temporary replacement of an employee pending the hiring of a new one.

State of health emergency

  • On 27 July 2020, Law 42-20 lifting the suspension of legal deadlines
  • On 8 August 2020, Decree 2-20-526 extending the state of health emergency to 10 September 2020 and giving power to the minster of interior on a national level, and the local authorities on a local level, to take any actions they may see fit to relax the restrictions depending on the pandemic situation.
  • On 13 August 2020, Decree 2-20-572 providing for a fine of MAD 300 on people not wearing protection masks in public spaces to be paid immediately.

Legal update

Labor law

  • On 22 May 2020, the ministry of work has issued guidelines for the management of the risk of contamination in the workplace
  • On 27 April 2020 promulgation of:
    • Law n°25-50 enacting extraordinary measures in favor of employers affiliated to the National Social Security Fund (CNSS) and their employees, affected by the repercussions of the spread of the coronavirus pandemic (Covid-19); and
    • Decree n° 2-20-331 of application of Law n°25-50 providing for the conditions to be eligible to benefit from the CNSS mechanism (MAD 2,000 per suspended employee payable directly to the employee):
      • the decrease of turnover is more than 50% -the declared suspended employees (and not the total number of employees of the company), including the ANAPEC trainees, is less than 500
      • the suspension of activity is by virtue of an administrative decision in accordance with the provisions of Decree No. 2-20-293 declaring a state of health emergency;
      • the sector of the company is not excluded from the benefit of the CNSS mechanism by decree
      • If the drop in turnover is more than 25% and less than 50%, or if the number of suspended employees is more than 500, the employer’s request is submitted to a committee composed of representatives of the government authorities in charge of finance and employment or in charge of the sector of activity of the relevant company, and the patronat.
  • On 21 April 2020 the tax department has issued a circular providing that the indemnity paid to their suspended employees by companies going through difficulties will be exempted from the income tax, within the limit of 50% of the average net monthly salary.

Data Protection

The Moroccan National commission for the protection of personal data CNDP (Commission Nationale de contrôle de la protection des Données à caractère Personnel), has issued on 23 April 2020 a deliberation (attached) whereby it provides that during the period of health emergency and in the framework of occupational health employers are allowed to measure the temperature of employees and visitors, subject to information of such employees and visitors of the characteristics of the measurement and processing system, for instance through a poster placed at the entrance of the premises.

State of health emergency

  • Decree n°2-20-371 dated 19 May 2020: Extension of the term of the state of health emergency until 10 June 2020 at 6 p.m.
  • Decree n°2-20-330 dated 18 April 2020: Extension of the term of the state of health emergency until 20 May 2020 at 6 p.m.
  • Decree n°2-20-330 dated 24 March 2020: declaration of the state of health emergency until 20 April 2020 at 6 p.m.
  • Decree-law dated 23 March 2020 enacting specific provisions regarding the state of health emergency and the process of its declaration.

  • Since 7 April 2020, wearing masks is mandatory in public spaces

  • On 21 May 2020 the Economic Watch Committee (Comité de Veille Economique, a committee established in the framework of the pandemic) has :
    • called for the return of the business activity on 26 May 2020
    • Presented new loan guarantee products for businesses to boost the economy
  • On 16 March 2020, the judicial authority has decided the suspension of court hearings with the exception of hearings that cannot be postponed, namely:
    • Criminal cases concerning persons in detention;
    • Investigations regarding suspects prosecuted while in detention;
    • Cases relating to minors who should be placed in a rehabilitation center or returned to their family;
    • Urgent cases which delay would cause prejudice to one of the parties.

Legal update

Commercial Law

Establishment of a national electronic register of pledges administrated by the Ministry of justice in accordance with Law 21-18, ready on 2 March 2020:

  • All pledges must be published in this register in order to be enforceable against third parties.
  • Not a condition of the validity of the security agreement but simply for enforceability against third parties.
  • The register will allow the verification of the existence of any pledge that may encumber the movable assets of a person or a company in order to increase security and transparency.

Legal update

Contract law

Amendment of the Moroccan contracts law (Dahir des obligations et des contrats) in order to provide for (i) the incorporation and registration of  civil companies and (ii) the establishment of local and national registers of powers of attorney regarding the transfers of real estate. The law will become effective after the promulgation of its relevant decrees of application.

Dismissal under Moroccan law

The Moroccan Labour Code prohibits the dismissal of an employee without a valid reason, either related to the employee’s aptitude or behavior (a dismissal for personal reasons) or related to the operational needs of the company (dismissal for technological, structural or economic reasons).
Disciplinary dismissal
The dismissal for personal reasons is justified either by the incapacity of the employee to occupy his/her position or by disciplinary reasons.
If the employee commits:
• a serious misconduct: the dismissal is immediate;
• a non-serious misconduct: the dismissal occurs only after the employer’s recourse to all the disciplinary sanctions against the employee during one year.
The Labour Code provides that in the event of a non-serious misconduct by an employee, the employer can take one of the following disciplinary sanctions which should be taken gradually:
i. a warning
ii. a reprimand
iii. a second reprimand or suspension for a specific duration not exceeding eight days
iv. a third blame or transfer to another service or, where appropriate, to another establishment.
A serious misconduct is a behavior or a set of behaviors of the employee violating the obligations of the employee in such a manner that it becomes impossible to maintain the work agreement of the employee.
The Labour Code provides a non-exhaustive list of acts that may be considered serious misconduct justifying the dismissal. In case of a dispute, the Labour Code gives the power to control the disciplinary decisions of the employers to the judges.
If a dismissal is considered by a court as not justified, the dismissed employee will be entitled to indemnities and damages which amounts and method of calculation are strictly governed by the Labour Code.
Before a court, the burden of proof of the compliance with the dismissal process described below and the existence of a serious misconduct lies on the employer.
The dismissal process starts with a prior interview of the employee by the employer in order to give the employee the opportunity to defend him/herself; following the interview, if the employer decides to dismiss the employee, such decision should be notified in written to the employee. If the employee considers his/her dismissal as unfair, he/she has the right to file a case before a court within a 90-day period from the day the dismissal decision has been notified to him/her.
In the event where the court considers the dismissal as unfair due to the non-compliance with the dismissal process or because it does not consider the misconduct as serious enough, the employee will be entitled to all indemnities specified in the Labour Code.
Economic dismissal
The employment contract of one or more employees may be terminated by the employer for reasons unrelated to the employee’s person, i.e. dismissal for structural, technical or economic reasons (Economic Dismissal).
In the event of an Economic Dismissal, the dismissed employee is entitled to severance pay and notice compensation and benefits from a hiring priority during a year.
The process is divided in two steps:
a. Internal procedure with employee representatives
Notice of employees’ representatives or trade union representatives in the company; and companies with more than 50 employees: the work council, at least 1 month before the dismissal. All necessary information relating to the Economic Dismissal should be provide including: dismissal’s reasons; number and category of employees concerned; and date of the economic dismissal, and that’s why people also like to gamble in casinos like playcroco to make some money as well.
Negotiations and consultations should be conducted with the same employee representatives mentioned above, in order to seek: measures to prevent the dismissal; means to reduce the negative effects of dismissal; and opportunities to reintegrate some employees into other positions.
b. External procedure with the governor of the prefecture or province
In order to proceed with an Economic Dismissal, an employer has to apply for a dismissal authorization, from the provincial delegate in charge of labour, and submit all documents that may justify the dismissal.
The provincial labour delegate will analyse the dismissal application and investigate as appropriate. The delegate has to submit its report to the members of the provincial commission within a period of one month starting from the receipt of the Economic Dismissal application.
The governor of the prefecture or province decides whether to authorize the Economic Dismissal within two months after the application.