The rules concerning economic dismissal in France are generally considered to be extremely complex. The applicable procedure and the extent of the employees’ rights depend principally on the number of employees to be dismissed and the size of the employing entity. The main entitlements of employees can be summarized as follows (subject to more favorable collective bargaining agreement / unilateral undertaking / customary practice / contractual provisions):
Prior to dismissal
– The right to be dismissed according to an objective selection process: Employers are required to establish objective criteria as set forth in relevant legislation or by the applicable collective bargaining agreement and apply them to each category of affected positions for the purpose of determining which employees will be subject to the dismissal procedure.
– The right to receive proposals of alternative positions: As soon as the redundancy procedure is initiated, a strict and general obligation applies to the employer to seek alternative positions for the employees concerned (such positions being within the employer company itself and in other companies in its group, even if such positions only exist abroad if the employee accepts such a posting) will apply.
– Proposal of a reclassification scheme: The employer is required to propose the applicable reclassification scheme for the purposes of assisting dismissed employees to find another position:
- The “congé de reclassement” applies in companies employing at least 1,000 employees (or members of a group employing at least 1,000 employees, in specific circumstances). This scheme is financed by the employer who will, in particular, be responsible for the payment of a specific allowance to the employees, during up to 12 months after the dismissal.
- The “contrat de sécurisation professionnelle” (CSP) applies to other companies and is principally financed by the State. If the employee accepts the CSP, his/her notice period indemnity up to 3 months will be paid by the employer directly to the unemployment authorities.
At the time / following the dismissal
– Notice period: The length of the notice period is variable depending on various criteria such as employees’ length of service, classification, etc. Employees can be exempted from working during their notice period provided that they are paid in lieu thereof (subject to the CSP rules).
– Dismissal indemnity: Employees with at least one year’s service are entitled to receive a minimum dismissal indemnity representing 1/5th of their monthly salary for each year of service for the first ten years, and 1/3rd of their monthly salary for each year of service beyond ten years. However, collective bargaining agreements often provide for more favorable indemnities.
– Holiday rights and other contractual entitlements: Employee should be compensated for any holiday days which have been accrued but not taken, plus any other contractual entitlements.
– Individual training right: If an employee requests the benefit of this right before the end of the notice period, the employer is required to contribute to the training chosen by the employee up to the amount corresponding to his/her rights.
– Temporary maintenance of private health insurance (“mutuelle”) and providency (“prévoyance”) schemes: French law also provides for the right for the employees to continue to benefit from the guarantees provided under their previous health insurance and providency schemes, if any, under certain conditions and for a limited period following the end of the employment contract.
– Priority of reemployment: Employees dismissed benefit from a rehiring priority during one year after the end of the employment contract.
Entitlements specific to mass redundancy procedures
Employees dismissed in the context of mass redundancy procedures generally also benefit from additional rights (indemnities, assistance from outplacement agencies, etc.) resulting from the employer’s obligation to implement a job saving scheme (“plan de sauvegarde de l’emploi”), negotiated with union representatives or decided unilaterally and subject to approval by the labor authorities’, the purpose of which is to avoid or limit the effects of any dismissals.