First of all
the company must establish that its decision to terminate an
employee for economic reasons is the result of serious
economic difficulties which significantly impair the
competitiveness of the company. The assessment of the
economic difficulties must be done both at the French and at
the international levels, meaning that the company is not
entitled to dismiss the employee even though it suffers
significant losses in France if it can be established that
the company or the group to which it belongs is profitable
worldwide. It is worth collating evidence which establishes
this at an early stage, as it will become relevant later in
the procedure. A failure to establish this can render a
dismissal unfair in France.
Dismissing an employee for economic reasons is always
considered by French courts as a tactic of last resort to be
taken to safeguard the competitiveness of the company, which
means that the employer must do its best efforts to find new
job positions matching with the skills and abilities of all
the employees who are likely to be dismissed. Even job
positions at an inferior hierarchical level and/or with an
inferior remuneration should be considered during the job
search, provided that that level remains reasonable. The
search must be conducted in the company and, if the company
is part of an international group, within the business
sector of the group.
It is only in
the event that no job opportunities are available within the
company and/or the Group for the employees whose jobs are at
stake that the economic dismissals can take place.
If job
positions are available, they must be offered in writing
to employees and be detailed (e.g. remuneration, work
place, job description, benefits…) and individualised
(i.e. posting available positions on a board is not
considered sufficient).
There is no obligation to offer an alternate job position to
an employee if that job position would require a too long
and costly training for the employee to perform the duties
relating to the job. For instance, an employer should not
offer a job position to an employee who does not speak the
language that is required to perform the job.
In any event,
the company will have to make written enquiries to all the
other entities of the group throughout the world and wait
for responses showing that no job positions are available,
before dismissing employees.
To make sure that the employer actually complied with its
redeployment obligation before dismissing the employee for
economic reason, French Courts can order the employer to
disclose all the negative answers that it is supposed to
have received from its affiliates and/or subsidiaries in the
course of the job search before dismissing the employee for
economic reasons.
Please not that if the employer is unable to prove that it
did its best efforts to find an alternate job position for
the employee to be dismissed, the Court may declare that the
dismissal process is null and void on the basis of Articles
L.122-14-4 and L.321-4-14 of the French labour Code. In such
a case, the Court will order the employee’s reinstatement in
the company. If the reinstatement is no longer possible or
alternatively if the employee does not want to be
reinstated, the court will sentence the employer to pay to
the employee damages that cannot be less than the employee’s
remuneration over his last 12-months of work.
