France: Employees Made Redundant Must be Informed of the Grounds For Redundancy (August 2010)

Last Updated: 18 August 2010
Article by Christopher Ivey

Employees made redundant must be informed of the grounds for redundancy at the latest by the date they accept the CRP (14 April 2010 n° 08-45.399 and 09-40.987)

The State-run CRP (convention de reclassement personnalisée) redeployment programme must be proposed to employees at risk of redundancy in particular in businesses of less than 1,000 employees, either during their preliminary meeting, or in procedures where no preliminary meeting is required, following on from the final employee representative meeting.

The employee then has 21 days in which to accept or refuse the scheme, acceptance resulting in their employment contract being terminated immediately at the end of the 21-day period, through a mutual agreement. The Cour de cassation has previously held that this mutual agreement does not prevent the employee from challenging the grounds on which the employer considered their redundancy (5 March 2008, n° 07-41.964), and it is therefore important to draft detailed grounds explaining the justification for considering their redundancy. Indeed, as with a termination letter, the grounds referred to are considered as the basis of a case for unfair dismissal, and must be provided in writing (27 May 2009, n° 08-43.137).

Until recently, these written grounds could be sent subsequent to the employee's acceptance, acknowledging this and the termination of their employment through the CRP scheme, and informing them of the economic justification that would have been applied. However, in two decisions dated 14 April 2010 (n° 08-45.399 and 09-40.987), the Cour de cassation held that the employee must be informed of the grounds for termination in writing, at the latest by the time they accept the CRP.

This deadline should be distinguished from the end of the 21-day acceptance period, as the employee can accept the CRP scheme as soon as it is offered to them (even so the employment contract will only be terminated at the end of the 21-day period). This was a point of contention in the above cases, as the Attorney General considered that, in line with the procedure for standard terminations, the grounds for termination should be presented to the employee by the actual date of termination, which would correspond to the end of the 21-day period. However, the Cour de cassation overruled this and held that the employee must be informed before accepting the scheme.

In order to take this new case law into account, we recommend providing the employee with details of the economic grounds referred to during the preliminary meeting or in the memorandum provided to employee representatives, at the same time as the CRP documents. However, in doing so, it is important to bear in mind the fact that the employer is not entitled to take its decision to terminate for a certain period of time after the preliminary meeting (7 or 15 days). The grounds provided to the employee at this early stage are therefore be those on which the redundancy is "envisaged".

Bullying does not need to be long term to constitute harassment (26 May 2010 n° 08-43.152)

The Labour Code and previous court decisions highlighted the fact that the actions considered as bullying must be repeated in order to constitute harassment, and it was on this basis that the Court of appeal in the present case held that while the employee was demoted and sidelined following a long term sick leave, and threatened and insulted after a second period returning to work, these events took place over a relatively short period (of approximately one month), insufficient, bearing in mind the period of sick leave, to characterise harassment through bullying.

The Cour de cassation overturned this decision on 26 May 2010 (n° 08-43.152), holding that actions can constitute bullying even though only over a brief period. It is important to note that the Labour Code still requires bullying to be repeated, over a sufficient period to have the effect of damaging employment conditions, infringing the employee's rights, dignity, mental or physical health, or compromising the employee's future career. However, as a result of this case, it is clear that the repetition does not need to occur over a particularly long period.

Law on conditions for the redeployment of employees at risk of redundancy (Law n° 2010-499 of 18 May 2010)

French case law has defined a principle whereby if considering terminating employees on economic grounds, the employer must search for and propose to employees any appropriate redeployment opportunities within the company and the group to which the company belongs. This has led to what some claim as "unreasonable" proposals, for redeployment to countries where wages are typically significantly lower than in France.

In an attempt to limit such issues, a law was passed on 18 May 2010 defining the procedure and conditions to be respected in the event that a company offers redeployment abroad to employees at risk of redundancy.

It should be noted that this law only governs redeployment abroad. Any redeployment opportunities in France must be proposed to the relevant employees in any case.

This law has incorporated a new article (L. 1233-4-1) into the Labour Code, providing for a specific redeployment procedure for companies or groups with entities outside France, as follows:

  1. The employer must ask the employee prior to termination, whether they would accept to receive redeployment offers outside France, referring to each of the potential locations for redeployment, and ask if the employee has any specific minimum terms in particular in relation to remuneration and location.
  2. The employee must respond to this request stating any specific restrictions, within 6 days of the employer's request. Failure to respond is considered as a refusal of any potential redeployment offers abroad.
  3. The employer must only present such redeployment offers abroad to the employees who have accepted to receive them, such offers taking into account the employee's specific restrictions.
  4. The employee is free to refuse such offers.
  5. If an employee accepts to receive redeployment offers abroad, but none correspond to the conditions set out by the employee at the relevant time, the employee must be informed of this.

In addition, the law has redrafted the terms of Article L. 1233-4 of the Labour Code to include a reference to the remuneration to be offered in relation to such redeployment. However, while it was envisaged to stipulate that the remuneration offered must be "decent, compatible with salaries generally applied in the employee's skills sector, even for a position abroad", the legislation actually only specifies that the remuneration must be "equivalent", without further details. This would seem to leave the matter open for discussion as to what is considered as an "equivalent" salary. Faced with this risk of uncertainty, employers should ensure that the redeployment questionnaire restricts the scope of potential claims by strictly defining the level of remuneration that the employee considers acceptable.

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.

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