Due to a force majeure or fortuitous event that makes work impossible, such as fire, earthquake, storm, explosion, crop pests, war, and in general, any other extraordinary event that the contracting parties could not foresee or, if foreseen, could not avoid.

Article 30 of the Civil Code defines force majeure and fortuitous event as:

Art. 30.- An unforeseen event that cannot be resisted, such as a shipwreck, an earthquake, capture by enemies, acts of authority performed by a public official, etc.

Both concepts share two essential elements: i) unpredictability, and ii) impossibility of resisting or avoiding the event.

In a fortuitous event, the defining characteristic is unpredictability, meaning the impossibility of anticipating its occurrence within reasonable expectations based on typical social conditions. Because of this, the contracting parties, and especially the employer, have no capacity to react. Examples include earthquakes or sudden natural disasters.

In force majeure, the key element is the impossibility of resisting the event, even if it could have been foreseen. The parties simply cannot prevent or neutralize its damaging effects.
Force majeure may be: i) unpredictable (like fortuitous events), or ii) foreseeable but impossible to resist.

The Ecuadorian Civil Code groups both concepts together and includes acts of public authority within the same provision (Article 30 of the Civil Code). Such acts may be predictable, since they arise from rules and decisions issued by authorities, but they require compliance, and resisting them constitutes a punishable offense. Public order relies on obedience to law and authority.

Article 169, No. 6 of the Labour Code aptly defines the issue by referring to extraordinary events that the contracting parties (i) could not have foreseen or (ii) that, even if foreseen, could not have prevented. The rule, therefore, includes fortuitous events, characterized by their unpredictability, and force majeure, defined by its inevitability.

Article 169 lists all legal grounds for terminating a contract without liability. Labour indemnities apply only when termination is attributable to the employer without lawful cause. Since neither force majeure nor fortuitous event is attributable to the employer, because they cannot be foreseen or avoided, indemnity obligations do not arise. These events exceed the normal scope of the employment relationship and make continuation of the contract impossible.

The COVID-19 pandemic clearly fits within these parameters: its nature, risks, and scale surpass the will and capacity of the contracting parties. As the law states, such events make performance of the contract impossible, regardless of whether it refers to work, services, or ongoing obligations. Thus, employers are exempt from liability when termination is grounded on force majeure or fortuitous event.

If such events coincide with acts of authority (e.g., state of emergency, stay-at-home orders, travel restrictions), the impossibility of contract performance, and therefore, the employer’s exemption from liability, is even stronger, provided the termination clearly states force majeure or fortuitous event as its basis.

Sincerely,