Actance Tribune
What's NEW under French Employment Law?
N° 6 – June 13, 2022
The Macron scale – validation by the French “Cour de Cassation”
When a dismissal is challenged before the Employment Tribunal (“Conseil de prud’hommes”), since 2017, French law defines the amount of damages paid to any employee whose dismissal is judged to be without real and serious cause. A scale commonly called the “Macron Scale” is applied.
The amount of compensation varies between a minimum floor and a maximum ceiling as defined by the French Labour Code according to the employee seniority and the size of the company (less than 11 employees/at least 11 employees). For example, in a company with at least 11 employees, an employee with 10 years of seniority can expect compensation of between 3 and 10 months wages (for more details, Actance Tribune No. 2 of February 7, 2022: here).
Some Employment Tribunals, approved by some Courts of appeal, have accepted the possibility of excluding the application of this scale, and therefore of granting an employee compensation higher than the ceiling provided for, when the circumstances of the specific case fail to ensure sufficient compensation for the dismissed employee (for example, employee approaching the retirement age, disability, etc.). This is notably the case of the Paris Court of Appeal (March 16, 2021, No. 19/08721).
The Court of cassation (“Cour de cassation”) has just ruled for the first time on this possibility by unreservedly approving the scale, considered notably to comply correctly with the provisions of international treaties. The Court has held that it is up to the judge to award damages for dismissal without real and serious cause, strictly respecting the legal floor and ceiling provided for, in any event (Court of Cassation – Social Division, May 11, 2022, No. 21- 14.490, No. 21-15.247).
Thus, and henceforth, the Employment Tribunals and the courts of appeal should strictly apply the scale, or risk seeing their decision being reversed by a court of higher instance.
There is a simulator of damages due in the event of dismissal without real and serious cause that can be consulted here (French version only).
Please note, this scale is not applicable should there be a violation of a fundamental liberty (for example, freedom of speech, whistle-blower, right to strike, etc.), acts of psychological or sexual harassment, discriminatory dismissal, etc. Also, the scale does not cover all of the damages and/or claims that could be invoked by an employee (for example, damages for sudden and/or vexatious dismissal, etc.).
Termination by mutual agreement (“rupture conventionnelle”)
Since the entry into force of the law of June 25, 2008 establishing this system, the number of terminations by mutual agreement has continued to grow. In March 2022, 42,300 terminations by mutual agreement were approved (for unprotected employees).
As a reminder, the termination by mutual agreement, excluding resignation and dismissal, is a procedure that allows the employer and the employee to jointly agree on the conditions for the termination of their binding employment contract.
This termination procedure is increasingly popular for the following reasons:
- speed (approximately 6 weeks of procedure);
- the small number of resulting disputes. In this respect, the Court of Cassation has declared that a dispute between the parties of an employment contract does not affect the validity of the termination as long as the latter have freely consented to this termination (Court of Cassation – Social Division September 30, 2013, 12-19.711);
- the possibility for the employee to benefit from unemployment insurance under the conditions provided by law;
- ease of use, given that this procedure is now possible online, via a specific website (applications for approval must be sent using this platform since April 1, 2022).
However, the termination by mutual agreement system has also some drawbacks:
- the employee’s agreement is required;
- possible litigation on the execution of the employment contract;
- it is not necessarily suitable or certain in the event of complex situations with multiple issues.
A brief presentation of the procedure to be followed (for unprotected employees):
Please note that when signing the specific form, the company must keep a written document issued by the employee stating that he/she received a copy of the form. Failing this, he/she may request nullity of the termination by mutual agreement, due to not having the possibility of requesting the approval of the agreement and may exercise his/her right of withdrawal with full knowledge of the facts (Court of Cassation – Employment section, April 13, 2022, No. 20-22.895).
Firm news
At the 22nd edition of the Sommet du Droit (legal summit), organised by the Décideurs juridiques (Leaders League group), Actance was given a Special Mention by the Jury in the Collective Negotiations and Labour Relations category.
This very fine distinction highlights the firm’s innovation and technical expertise in the key area of labour relations!
