French employment law allows employers and employees to agree on the termination of the employment contract by mutual consent. Such termination must be formalized through the implementation of a “rupture conventionnelle homologuée” (“RCH”) which requires adherence to a formal procedure including, among other things, the requirement to obtain approval from the Labour administration.
The advantage of such termination is that the employer is not required to provide any reasons for the termination, as would be the case if the employment contract was terminated through a dismissal. Nevertheless, employees may bring actions challenging such termination if their consent have not been freely obtained. In such a case, the RCH would be annulled, triggering the same effects as those of an unfair dismissal. In this respect, the case law is to the effect that the mere existence of a conflictual situation between the employer and the employee is not sufficient to affect the validity of the RCH.
In this context, is an RCH valid if the employer, simultaneously with the RCH procedure, convenes the employee to a pre-dismissal meeting?
In a recent ruling of the Supreme Court on 16th September 2015, after some discussions on the possibility of terminating the employment contract through a RCH, an employee was convened on 21st July 2010 to a meeting with a view to finalizing the termination. However, the parties did not settle on the terms of the agreement, and on 3rd August 2010, the employee was sent a letter denying him his holidays rights and ordering him to come back to work. On the following 12th August, the employer convened the employee to a pre-dismissal meeting for gross misconduct, simultaneous with a temporary suspension with immediate effect. On the same day such letter was delivered, the parties finally signed the RCH. Against this background of events, the employee lodged a claim alleging that he was coerced into signing the RCH and that such RCH should therefore be annulled.
The Supreme Court approved the findings of the Court of Appeal which held that the RCH must be annulled on the grounds that the employee’s consent was vitiated since he was placed in a situation where he had no other choice than to sign the RCH or to be dismissed. In this context, the termination of the employment contract was viewed as inevitable, the decision to terminate the employment contract having in fact been imposed by the employer.
Such decision should not come as a surprise as an RCH is necessarily null and void in cases where an employee has not freely entered into such an agreement. Starting a dismissal procedure simultaneously with the negotiation of a RCH is generally considered as a decisive factor in deciding that the employee’s consent is vitiated. Thus, French employers should be particularly careful not to start a dismissal procedure at the time surrounding the signing of a RCH should they wish to avoid the risk of a nullity carrying the financial consequences of an unfair dismissal.
