France deals blow to Amazon as warehouses remain shut

By Mathieu Rosemain and Gwénaëlle Barzic

PARIS (Reuters) - France has rejected a request from e-commerce giant Amazon <AMZN.O> to tap a state-funded scheme to subsidise furloughed employees at its six closed warehouses in the country.

Amazon's French warehouses, which employ about 10,000 people on permanent and interim contracts, have been shut since April 16 after court rulings ordered the company to limit deliveries to a list of essential goods during the coronavirus pandemic or face fines.

The Seattle-based group said it would keep paying its French employees their full salary during the temporary warehouse closures, but it also filed a formal request last week to benefit from the state scheme under which the government pledges to pay 70% of the gross salary of workers placed on furlough during the pandemic.

"The request... has been rejected because the closure of the sites is the consequence of a court ruling and not of a drop in activity," the French labour ministry said on Monday.

The company has said the latest French court ruling, which restricts deliveries to IT products, health items, food and pet food could lead to multimillion-dollar fines if it unintentionally ships items that are not included on the list.

"The potential court penalty means that even a rate of 0.1% of handling or shipping items that are not included in the judgment could lead to a fine of more than a billion euros ($1.1 billion) per week," Amazon said.

French unions have brushed off Amazon's arguments, saying the company was playing hardball with them by taking an all-or-nothing approach that impedes the start of proper negotiations.

Amazon said that some unions were seeking to exploit "complex" procedures with staff representatives, who have to be consulted and informed under French law.

The company said it would inform unions at a works council on Wednesday of its intent to keep warehouses shut up to and including May 8 as it seeks the best way to operate under the terms of the ruling.

The legal stand-off followed a complaint filed by hardline union SUD, which said Amazon did not do enough to protect employees from COVID-19 contagion.

"We're in contact with the authorities to keep them informed of the situation at our sites (following the ruling)," Amazon said in a statement earlier on Monday.

(Reporting by Gwenaelle Barzic and Mathieu Rosemain; Editing by Emelia Sithole-Matarise and David Goodman)