Under French law, in order to be valid, a dismissal must be based on a real and serious cause which must be exact, precise, objective and of a sufficiently serious nature to justify the dismissal. This requirement applies to any type of dismissal regardless of the age / position / length of service of the employee and the headcount of the company.

Dismissal for personal reasons or for economic reasons

There are two main categories of dismissal:

  • Dismissal for personal reasons, in which the dismissal is based on reasons that relate to the employee (misconduct, poor performance, absence, etc);
  • Dismissal for economic reasons: termination of an employment contract for economic reasons is only fair if all of the following conditions are met: (i) termination is for reasons other than those personal to an employee, (ii) it results in the dismissed employee’s position ceasing to exist or being significantly changed or in a substantial modification of the employment contract, and (iii) it is based on economic reasons which are defined as being actual economic difficulties or the reorganisation of the company in order to safeguard its competitiveness (assessed at group level).

It is up to the employer to prove the reality and the seriousness of the grounds for dismissal on the basis of objective and material evidence. In the event of litigation, if the employer fails to adduce such evidence, the dismissal of the employee will be held to be unfair. If the court considers that there is a doubt in this regard, the issue is resolved in favour of the employee.

Sanctions for unfair dismissal

If the dismissal is held to be unfair, the employee will be awarded damages by the court to compensate for the loss suffered as a result of the unfair dismissal.

  • If the employee has at least two years’ service and works for a company with at least 11 employees, the employee may ask to be reinstated in the company, but this is very rare in practice and can be refused by the employer. Most of the time, the employees claim damages. They are entitled to a minimum of at least six months’ salary by way of damages. There is no set maximum to the award and the damages awarded may be higher depending on the circumstances of the case (for instance, the age and length of service of the employee, the chances of re employment etc). In addition, the employer may be required to reimburse the French unemployment benefit fund with the equivalent of up to six months of the unemployment benefits paid to the employee;
  • If the employee has less than two years’ service and / or works for a company with less than 11 employees, the level of damages depends on the actual loss suffered by the employee and no minimum is provided by law.

In any case, no maximum amount of damages is set by the law.

Constructive dismissal

In case of serious breaches by the employer of the employment contract (e.g. non payment of salary, discrimination / harassment, breach of the health and safety obligation), an employee can claim the equivalent of constructive dismissal, i.e. terminating the contract due to the employer’s behaviour.

If the court considers that the employer’s breach is sufficiently serious, the termination will be deemed to constitute an unfair dismissal with the consequences mentioned above. Conversely, if the court finds that the employer’s breach is not sufficient to justify a finding of a constructive dismissal, the employee will be held to have resigned.

Void dismissal

The French Employment Code prohibits dismissals in certain circumstances (notably based on discriminatory reasons, harassment, or in breach of the protection afforded to pregnant women or employee representatives). Moreover, dismissals may be held null and void in case of mass redundancies if a court decides that the job saving scheme, which must be implemented to assist employees in finding another job, is insufficient.

Dismissals considered as null and void incur more severe sanctions (namely reinstatement of the employee concerned, award of substantial damages, and potential criminal liability).

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