Coronavirus and the consequences for film productions

The current situation in view of the corona virus also raises many questions in the media and entertainment industry. Our experts in media and entertainment law will answer important questions together with our employment law team. We will update this article daily and mark [updates] accordingly.

[Update March 18, 2020] Question: Since Monday, March 16, 2020, various public authorities of the federal states of Germany have issued “general decrees” according to which no more permissions to shoot movies will be issued. Does this mean that movie shoots are now prohibited altogether?

Answer: No, that is not necessarily the case. It is evident that no new permissions for movie shoots in public spaces will be issued and existing permissions may be revoked and may have been revoked by the competent authorities. On the other hand, however, most of the general decrees do not explicitly apply to movie shoots on closed sets with only performers and staff present and without audience participation. If an audience is present, however, it will likely be an event that is prohibited. In cases where only performers and staff are present, this is rather a situation of normal work, which is not prohibited (as long as in compliance with possible conditions placed on such work by the trade supervisory authorities) and which is supposed to continue until further notice. It needs to be borne in mind, however, that these general decrees are interpreted and handled differently in the various German states and also by the respective local authorities. Some of the federal states and a number of local authorities hold the view that even closed sets are events organized by producers which are covered by the general decree and should hence come to a halt. It is therefore advisable to check with the local authorities. In any case, no more permits for barriers and parking space permits will be issued, anyway. The exceptions usually admissible under the general decrees are generally not granted either.

Question: With many in the film industry worried about their health, what should be done if they don’t show up on set, even if there is no suspected case of coronavirus?

Answer: In cases where workers fail to show up on set without excuse, there will be no obligation to pay them. From a legal point of view, after warning letters announcing a penalty of dismissal have been ignored, they may be terminated without notice.

[Update March 18, 2020] Question: Are employers/producers allowed to take the temperature of individuals prior to individuals entering the premises/set?

Answer: Taking the temperature is a processing of personal data. Since the coronavirus is now classified as a pandemic by the WHO, such processing by employers/producers may be justified under certain conditions.

Upon reviewing this issue, the German supervisory authorities for data protection arrived at the conclusion that employers/producers may collect all data needed to meet their assurance duties. The duty of care requires employers/producers to ensure the health protection of all their employees. This includes measures to protect other employees from infection by a sick person. These measures must always be necessary and proportionate. The relevant data must be treated confidentially and used exclusively for the intended purposes. After the respective processing purpose ceases to apply, thus typically at the end of the pandemic at the latest, the data collected must be deleted without delay.

In relation to taking the temperature of individuals prior to entering the premises/set, this means specifically:

a) As far as visitors (i.e., not employees, other workforce, etc.) are concerned, this measure may generally be covered by the employers’/producers’ powers to enforce house rules to protect their establishments/sets.

b) As far as the workforce is concerned, however, taking the temperature is to be assessed differently. Since workers’ constitutionally protected personality rights are to be taken into account, a proportionality test must be carried out. The company’s industry sector and the actual circumstances (e.g., is there regular collaboration in close proximity?) may also play a role in assessing the appropriateness of the measure. In addition, it may also be considered whether there are already cases of suspected infections in the company/on the set, whether employees/actors were in a risk area or whether the company/set is located in a region with a large number of infected people. All of the above may argue for the permissibility of taking temperatures even of the workforce.

For employers/producers in the non-public sector, the authorization to process personal employee data is derived from Section 26(1) German Federal Data Protection Act and Article 6(1) sentence 1 (f) GDPR, each in conjunction with the relevant provisions of national law under civil service law, collective bargaining law, employment law, and social law. Where health data is processed, Article 26(3) Federal Data Protection Act and Article 9(2)(b) GDPR are also relevant.

The data subject is therefore not required to give consent since consent is not mandatory. Such consent might also not be voluntary in cases where employers/producers made entry dependent on the taking of temperature.

If the above conditions are met, it is permissible to take the temperature of individuals prior to entering the premises/set (reference is made to the separate article on Data protection in times of corona).

Question: Are employers/producers allowed to send workers to an area with infections, for example, if the shooting takes place there?

Answer: The mere fear of workers that they might become infected with a virus is not sufficient to refuse travel for business purposes; the duty to work also extends to business trips. The case is different if the Foreign Office has issued an official travel warning. Workers do not have to travel to such areas or countries, as it would be inequitable to issue such instructions. Nevertheless, the instruction to go on a business trip may also be “inequitable” below the threshold of travel warnings. In any such cases, the interests of the workers must be weighed against employers’ business interests.

Question: If productions do not have a suspected or actual case of infection, are producers allowed to order mandatory leave for the purposes of minimizing risk?                     

Answer: It is only possible to unilaterally order leaves if workers’ interests are taken into account. Their interests may be opposed to immediate granting of leave, for example, if vacation times have already been firmly scheduled for later in the year or leave periods are needed for childcare at other times. In general, it should now be possible to unilaterally order leave for vacation periods that were not taken in the year prior.  In our opinion, this will only apply to a very limited extent for current year vacation periods, however, particularly without advance notice – if at all, then only in relation to a smaller portion of the remaining leave entitlement.

Question: Since Monday, March 16, schools and pre-schools have been closed in most German states. Are actors/actresses or other participants in a production permitted to stay home from work even if this results in the cancelation of production days, if they have to look after their children and were unable to organize childcare by any other means?

Answer: Under Section 616 German Civil Code, if workers are prevented from performing services for personal reasons, through no fault of their own, for a relatively insignificant period of time, they may stay away from work and retain their right to contractual remuneration. Compulsory childcare is recognized as such a reason. The law does not stipulate the length of a “relatively insignificant period of time.” In general, five working days will still be considered as falling under this provision. In some instances, however, even longer periods will be regarded as permissible.

Question: In such events, may producers offer to provide childcare on the set or on separate premises organized by them?

Answer: As long as this relates to individual childcare, which is not subject to the requirement to close childcare facilities, and if other conditions for the permissible care of children are met, any such offering may lead to participants in the production no longer being “prevented” from performing their services, thus no longer giving them the option of exercising their right not to perform their work.

Question: If employers/producers learn that one of the participants in the production has been infected with the coronavirus, will they have to release them from work even if any such individual declares to still be able to perform their work for the few remaining shooting days?

Answer: As employers/producers have a duty to care for the health of all participants, they may not accept any such offer and must release the participant from work.

Question: If employers/producers learn about a confirmed case of infection in the production team, will they be allowed to notify other individuals involved in the production?

Answer: Although information on workers’ health is personal data that is subject to increased protection under the GDPR, employers are nonetheless entitled and obligated to notify at least all those participants who have had closer contact with the individual infected with the coronavirus because of the employer’s duty of care towards all other participants.

Question: How about if there is only a suspected case of infection?

Answer: If employers/producers learn that participants have been in a risk area within the last two weeks or has had contact with persons suffering from coronavirus, they will not be obligated to release them from work if the participants do not show any symptoms. If participants do show the typical symptoms (such as fever, dry cough, etc.), however, and an infection with the coronavirus cannot be unequivocally ruled out, employers/producers will be obligated to release such individuals from work to protect the other participants in the production.

Question: As an employer, am I allowed to demand that workers who are still on the set and who are suspected of having an infection undergo medical examinations?

Answer: Orders by employers for workers to undergo medical examinations are inadmissible invasions of workers’ protected personal rights or the rights to physical integrity. In the event of an infection with the coronavirus, employers may not obligate workers to be vaccinated as soon as a vaccine is available, either.

Question: As an employer, what protective steps do I need to take? For example, do I have to provide disinfectants to reduce the risk of infection?

Answer: Employers need to comply with the general principles of occupational health and safety and meet their duty of care allowing workers to perform their work without risk (Section 618 German Civil Code). Whether it is necessary to provide disinfectants depends on the individual case, such as on how much contact workers have with other individuals and therefore how high the risk of infection is. If employers decide to do so, for example, they can obligate workers to regularly use disinfectants. This is covered by the employers’ instruction rights as a measure designed to prevent the spread of the virus.

[Update March 23, 2020] Question: If the production has to be discontinued because of key participants being sick, because of official orders, or because of shooting subjects that are suddenly no longer available, are producers able to dismiss all participants with immediate effect or at least after a notice period?

Answer: Most participants in a production are employed for a limited period of time. Those employment relationships may only be terminated with notice where such has been individually agreed, Section 15(3) German Part-Time and Fixed-Term Employment Act, although this is rarely the case in practice. According to Section 626 German Civil Code, however, even in such contractual relationships, each party may give notice of termination without observing a notice period for cause if facts are present on the basis of which the party giving notice cannot reasonably be expected to continue the employment relationship until the expiry of the notice period or until the agreed time of termination, taking into account all circumstances of the individual case and weighing both parties’ interests. A necessary phase-out period in the duration of the otherwise applicable ordinary notice period is also to be taken into account, which for fixed-term contracts with a term of up to two years will frequently be four weeks effective at the 15th day of a month or the end of a calendar month.

For freelancers working under service contracts, extraordinary termination without notice for cause may be considered in accordance with Section 626 Civil Code. The considerations outlined for employment contracts will apply, although in these cases it is not necessary to observe a social expiry period. Ordinary termination with the notice periods resulting from Section 621 Civil Code depending on the duration of the employment relationship is only permissible in the case of fixed terms if the parties have expressly agreed the permissibility of ordinary termination by contract. This is also possible by means of a supplement to the contract.

Question: What happens if a quarantine is ordered by health authorities?

Answer: According to Section 56 German Protection against Infection Act, anyone subject to a prohibition in exercising their employment due to a quarantine ordered by the authorities and suffering a loss of earnings as a result, is entitled to monetary compensation. Any such compensation is governed by the respective loss of earnings, i.e., net remuneration. Compensation is granted in the amount of the loss of earnings for the first six weeks and in the amount of sickness benefits as of the beginning of the seventh week, provided that the loss of earnings does not exceed the compulsory insurance limit of the statutory health insurance fund. For 2020, this limit is EUR 62,550.00 (gross)/year.

For workers, employers must pay compensation to the competent authority for a maximum of six weeks, in advance. Upon request, however,  employers will be reimbursed by the authority for the amounts paid to workers. Employers may also apply to the competent authority for advances for this purpose.

In addition to compensation from the competent authority, self-employed individuals whose business is suspended for the duration of the measure will receive adequate compensation for any unfunded operating costs that continue to be incurred during said period.

Question: What happens if a permission to shoot movies is not granted on the basis of a general decree or an existing permission is withdrawn?

Answer: In the event of unexpected disruptions to the business through no fault of their own, including externally ordered business shutdowns, the risk, and thus also the wage costs, are in principle also borne by employers (Section 615 German Civil Code). In this case, workers retain their right to remuneration even if they are unable to work. Special provisions apply to workers who themselves fall under the Protection against Infection Act or the provisions on short-time work.

Question: Do employers have a claim under the Protection against Infection Act for reimbursement of wage costs which have to be borne by them despite a business shutdown based on the general decree?

Answer: No, employers cannot claim compensation under the Protection against Infection Act for wage costs incurred in this respect. Claims for compensation under the Protection against Infection Act exist only for measures ordered by the competent authority on the basis of this law. According to Section 56 Protection against Infection Act, only those individuals (and their employers which have paid wages to them under Section 56(5) Protection against Infection Act) who, under the Protection against Infection Act, are deemed spreaders, suspected of being spreaders, or suspected of being infected and who are subject to a ban on professional activity in accordance with Section 31 Protection against Infection Act are entitled to claim compensation under the Protection against Infection Act. The same applies to individuals who have been or will be separated as spreaders or those suspected of being spreaders, i.e., who have been ordered by the authorities to remain in quarantine in accordance with Section 30 Protection against Infection Act. Individuals who are spreading pathogens and can therefore be a source of infection for the general public without themselves being ill or suspected of being ill are deemed to be spreaders. Persons are suspected of being infected if it can be presumed that they have absorbed pathogens without being ill, suspected of being ill, or being spreaders. Persons are suspected of being ill if they exhibit symptoms that suggest that a certain communicable disease is present. Self-employed individuals, i.e., persons who are not subject to rights of direction and who are not integrated into a foreign work organization whose business is suspended for the duration of a measure under the Protection against Infection Act, may, however, pursuant to Section 56(4) sentence 2 Protection against Infection Act, apply to the competent authority for appropriate reimbursement of uncovered business expenses that continue to be incurred during such period.

Question: Are producers/employers able to simply order short-time work for their workers?

Answer: It is a requirement for the option of ordering short-time work that this is expressly governed by the parties in the employment contract. Appropriate provisions may also be made in a separately agreed supplementary contract.

Question: Do the provisions on short-time work allowance also apply to small production companies, such as with fewer than ten permanent workers?

Answer: Yes, according to Section 97 German Social Code SGB III, the operational requirements are met if at least one worker is employed in the company.

[Update March 23, 2020] Question: What other requirements must be met to apply for short-time work allowance?

Answer: The granting of short-time work allowance also requires that there must be a substantial loss of work with loss of remuneration. Substantial loss of work is deemed to exist, among others, if it is due to an unavoidable event that is temporary and unavoidable. Unavoidable events are given, for example, if the loss of work is caused by measures taken by authorities or by officially recognized measures that were not caused by the employer. Events are unavoidable for employers if they have taken all reasonable precautions to prevent the occurrence of the loss of work, such as by granting paid leave, provided that this does not conflict with workers’ wishes that have precedence. Additionally, according to the law passed by the German parliament on March 13, 2020, it is sufficient for only 10% of a company’s workforce to be affected by the loss of work; several productions may have to be considered together if personnel is assigned by the same management. The affected workers must also meet the personal requirements; thus they need to be in an employment relationship subject to compulsory insurance after the beginning of the loss of work and the employment relationship must not have been terminated or dissolved by a cancelation agreement. Also, a perspective of continuation must be ensured, meaning that it must be possible to complete the work after the end of the short-time work period. In addition, the employer must have reported the loss of work to the Federal Employment Agency. Said notification must generally be received by the end of the calendar month for which the short-time work allowance is applied for (see also the article on short-time work that will be posted on this website soon).

[Update March 23, 2020] Question: Is it possible for entitlement to short-time work allowance to arise for workers who are only employed for the time of production if the production cannot even be started or has to be discontinued?

Answer: Yes! But here, too, it is required for the order of short-time work to be provided for in the employment contract or a binding supplementary contract. There must also be also an assured perspective of continuation, meaning that the work may be completed after the end of the short-time work period.

Question: What is the amount of short-time work allowance?

Answer: The amount of short-time work allowance is based on the flat-rate net loss of earnings during the entitlement period (calendar month), which his is the difference between scheduled remuneration and actual remuneration. Short-time work allowance is granted in two different benefit rates: For workers with at least one child, or workers whose spouse has at least one child, it is 67% of the net remuneration difference. For all other workers, it is 60% of the net remuneration difference.

Question: Are producers able to terminate a shooting subject rental contract early if the shooting is canceled due to lack of a permission to shoot based on a general decree?

Answer: Shooting subject rental contracts generally provide for the option of postponing the shooting date by mutual agreement. Producers may also have the option of waiving use until a certain point in time prior to the start of shooting, so that the obligation to pay remuneration is also waived. Alternatively, the contract or the remuneration claim arising thereunder may be made subject to the condition precedent that the movie shoot is actually carried out and/or an official permission to shoot the movie is available, where required. In these events, producers are not necessarily interested in terminating the contract.

Termination for cause according to Section 543 Civil Code is not possible because the grounds for termination must originate in the sphere of risk of the recipient of the termination, i.e., the lessor, while a general decree preventing the shooting or a corona epidemic are not events that are attributable to the lessor’s sphere of risk. In individual cases, contract adjustment (such as the postponement of the rental period) or - where an adjustment is not possible - termination, but possibly combined with an obligation to pay compensation, due to the loss of the basis of the transaction is conceivable. In relation to hotel bookings, opinions are split as to whether the risk situation is to be assessed differently and whether or not termination may therefore be justified for rooms that have been rented for an extended period of time.

[Update March 23, 2020] Question: Is it possible to cancel hotel bookings (for cast and crew) if the shoot is canceled?

Answer: This depends on various factors: If the hotel is no longer accessible (such as because of a curfew) or if the area where the hotel is located is subsequently declared a risk area, which was not foreseeable at the time of booking, producers may be entitled to withdraw from or cancel the contract, depending on the individual case. In other cases where, for example, the shooting of movies in the relevant area is no longer possible because of official orders or the non-availability of crew members, the risk is usually to be borne by the producers, so that it is not possible to cancel the contract on grounds of loss of basis of the transaction. 

In cases in which, for example, movie shoots in the relevant area are no longer possible due to orders by the authorities or the absence of crew members, the risk is usually borne by the producers, so that termination due to the loss of the basis of the transaction is not possible.

[Update March 18, 2020] Question: When are contractors entitled to the contractually agreed remuneration? What impact does it have if contractors fall ill or a shoot has to be discontinued?

Answer: Contractors (in non-technical words: the contractor within a contract for the provision of a work) are obligated to provide their services in advance. In principle, they may only demand payment once the complete work has been accepted by the client. There are, however, two exceptions:

(1) If the work is set to be accepted in stages and separate remuneration has been agreed for each stage, contractors will retain their claim to the respective partial remuneration, even if the final production of the work subsequently becomes impossible through no fault of their own. Where several work stages such as the start of shooting, the end of shooting, rough cut acceptance, etc. and corresponding partial remuneration have been agreed, the contractor will retain any remuneration received even in the event that the shooting is subsequently discontinued.

(2) In cases where further work becomes unfeasible due to grounds (the sphere) inherent in the client’s person or behavior, the contractor will be entitled to retain the part of the remuneration corresponding to the work performed and reimbursement of any expenses. Discontinuing a movie shoot because of an official order or prevailing health risks does, however, not constitute grounds within the producer’s sphere in our opinion.

[Update March 18, 2020] Question: When is there a duty or a right of the contractor to perform?

Answer: In the event of official bans to carry out the shooting or if the shooting cannot take place on other grounds (such as travel restrictions), there may be a case of (at least temporary) impossibility. It is then initially temporarily impossible for participants to meet their contractual obligations. Unless it is possible to achieve an amicable postponement of the contract period, the provision of services may become permanently impossible under certain circumstances. In such cases, neither the right nor the duty to perform the work will exist, and the right and obligation to payment of the remuneration will also expire.

[Update March 18, 2020] Question: What is the situation when individuals refuse to participate in movie shoots (including in shoots on closed sets with participants only and without audience) out of a fear of infection?

Answer: The mere concern about infection does not generally constitute a case of impossibility that releases participants from their performance duties. This would only be different in absolutely exceptional cases, where participants cannot be reasonably expected to perform their duties due to subjective circumstances.

[Update March 18, 2020] Question: Is it possible to terminate contracts for work and services? What are the legal consequences?

Answer: Clients may terminate contracts for the creation of a work at any time and without particular grounds until the work is completed. In such events, contractors will retain their claims to remuneration for work, reduced by saved expenses and other earnings made. In cases of termination for cause (which will generally, however, not be possible in cases of COVID infections through no fault), claims to remuneration will exist only for the work services rendered up to the termination. The provisions on “interference with the business of the transaction” may lead to claims for adjustment of the contract (possibly postponement of delivery periods). If completion of the work becomes permanently impossible, withdrawal from the contract may also be possible. In such events, any services already rendered will be refunded or appropriate compensation for lost value paid.

Status: March 23, 2020