What is the definition of collective dismissal?
Collective dismissal is defined as dismissal for reasons which are not linked to the employee's behaviour (such as economic reasons) of at least 7 employees over 30 days or at least 15 employees over 90 days. Provided that at least 4 employees are dismissed for economic reasons during this period, terminations of employment contracts by mutual agreement and departures into early retirement shall also be taken into consideration.
When there have been 5 dismissals for economic reasons within 3 months or 8 dismissals within 6 months, the Comité de Conjoncture must invite the social partners to begin discussions aimed at concluding an employment safeguard plan (Plan de Maintien dans l'Emploi). In companies facing economic and financial problems, this plan aims to avoid a collective dismissal by taking various measures to adapt the workforce while safeguarding employment (such as short-term unemployment, voluntary part-time work, reduction of working time, continuing training, retraining, temporary loan of workforce, early retirement). Social partners may also decide to take the initiative to begin discussions to conclude such a plan when they foresee economic or financial problems in the company that may have an impact on employment.
What is the procedure that must be followed in the event of collective dismissals?
When an employer contemplates proceeding with a collective dismissal, a social plan must be negotiated with the staff delegation and the trade unions that have signed the applicable collective bargaining agreement, if any.
Before starting negotiations for a social plan, the employer must inform and consult the staff delegation in this respect, as well as the Employment Agency.
Negotiations for a social plan shall cover the means of avoiding or reducing the number of dismissals and of mitigating the consequences of these dismissals by recourse to accompanying measures aimed at aiding the redeployment or retraining of dismissed employees. A certain number of topics listed by law must be discussed during the negotiations of the social plan. The negotiations shall also address the financial compensation(s), if any, which will be paid to the relevant employees.
Within 15 days after the beginning of the negotiations, the parties must record the outcome of their discussions in the form of an agreement, called a “social plan” agreement, which shall be sent to the Employment Agency. If the parties cannot agree, a conciliation process is initiated.
After the conclusion of the social plan or in case of non-conciliation within the applicable legal timeline, the employer is free to proceed with the dismissals.
Non-compliance with the applicable procedure would render the dismissals null and void, and affected employees may seek reinstatement or damages before the Labour Court.
What are employees' rights in the event of collective dismissals?
By law, employees subject to collective dismissal are entitled to a minimum notice period of 75 days. This period may be extended under legal provisions to 4 months for employees with at least 5 years of service and to 6 months for employees with 10 years of service or more, or even to higher notice periods by collective bargaining agreement.
Severance pay is due, calculated according to the employee's length of service (i.e., by law ranging from 0 to 12 months of salary depending on the employee's years of service, or higher amounts subject to the applicable collective bargaining agreements).
In order to reach an agreement on the conclusion of a social plan, the employer usually provides for extra-legal compensation (such as extension of the notice period, settlement indemnity, allowances, etc.) and/or non-pecuniary advantages (such as outplacement, recommendation letters, etc.).
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.
