Newsletter No.89 – May 2016

The Supreme Court has reached the following principle through its recent decision: « when the voluntary departures provided for by a social plan are designed for employees whose dismissal is contemplated due to the reduction of headcount, without any commitment not to proceed with any dismissal in case the objective is not reached through amicable termination of the employment contracts of the employees concerned, the employer is required to perform the redeployment obligation provided for in the plan towards these employees on a preliminary basis, by offering them available positions which are adapted to their personal situation, within the companies of the group whose activities, organization or place of business enable to switch all or part of the staff». Failure to comply with the preliminary internal redeployment obligation provided for by the social plan, termination of the employment contracts on an economic ground results in unjustified termination (Supreme Court, Lab. Section, 19 May 2016, n° 15-12.137 to 15-12.148).

In this case, a court of appeal had ruled a dismissal to be unjustified, notably on the ground that the dismissal letter only referred to the economic difficulties of the company without any reference to the situation of the industry of the group to which it belonged. The Supreme Court reverses this decision, considering that : “although the dismissal letter must state the economic ground of the dismissal as provided for by Article L.1233-3 of the Labour Code and the material consequence thereof on the employment contract of the employee, the assessment of the existence of the ground put forward is to be discussed before the judge in case of litigation » and it is not necessary that “[the dismissal letter] indicates the level on which the economic ground is to be assessed when the company belongs to a group; that it is only in case of a dispute that the employer has to prove, in the relevant scope, that the ground put forward was real and serious » (Supreme Court, Lab. Section, 3 May 2016, n° 15-11.046).

The Supreme Court clarifies the scope of Article L.1235-15 of the Labour Code resulting from the recodification of former Article L.321-2-1 of the Labour Code, which provided that “in companies employing at least fifty employees where the Works Council was not set up while no default minutes were drawn up and in companies employing at least eleven employees where no staff delegate was set up while no default minutes were drawn up, any dismissal based on an economic ground and notified therefore without complying with the obligations of information, meeting and consultation with the Works Council or the staff delegates is irregular and the employee thus dismissed is entitled to an indemnity which can be no less than one month’s gross salary, without prejudice to the severance and notice indemnities which are also due.” Although the new Article L.1235-15 of the Labour Code no longer refers to the obligation of information and consultation, the Supreme Court indicates that the recodification was made without any modification in law and that accordingly Article L.1235-15 of the Labour Code is only applicable to collective economic dismissals. Therefore, the indemnity resulting from the failure to set up staff representative bodies is not due in case of an individual dismissal based on an economic ground (Supreme Court, Lab. Section., 19 May 2016, n°14-10.251).

In this case, the point was to determine, following the cancellation of the elections, what happened to the appointed union delegates and union representative at the Works Council, to the extent that they can only be appointed by representative trade unions, that is to say by unions which among others obtained at least 10% of the votes at the first round of the last elections. The Supreme Court confirms its stance according to which the judgment whereby elections are cancelled has no retrospective effect. The Supreme Court considers that “the cancellation of the elections has no consequence on the regularity of the appointments as union delegate and union representative at the Works Council». Nevertheless, the Court adds that the maintenance of the union offices ends upon the new elections renewing the staff representative body (Supreme Court, Lab. Section, 11 May 2016, n°15-60.171).

In this case, the court of appeal had ruled that a fixed-term employment contract was in fact an indefinite-term employment contract, effective as from December 13, 2004, but had rejected the claim for the payment of sums resulting from the length of service of the employee, on the ground that there was no evidence that the work relationship was maintained between 2007 and 2009. The Supreme Court reverses this decision, on the ground that “by ruling that the fixed-term employment contracts were in fact an indefinite-term employment contract, the employee was deemed to have worked on an indefinite-term employment contract from the day of hiring on an irregular fixed-term employment contract and he was entitled to claim a length of service as from such date” (Supreme Court, Lab. Section., 3 May 2016, n°15-12.256).

Aiming at accelerating the labour court proceedings, the decree provides among others for the removal of the specific rules of “instance unicity” (whereby all claims resulting from one employment contract had to be brought before the court during the same action) and “instance expiration” (by lack of diligence from the parties). The decree makes it mandatory to be represented in appeal by an attorney or a union defender as from August 1^st, 2016. Actions brought as from such date must contain a brief presentation of the grounds of the claim together with the evidence. The new conciliation and orientation office has an increased role in ensuring that the case is ready to be pleaded. The new chambers of judgment are created to reduce the time for the cases to be heard. The decree also sets the procedure before the instance court in case of a claim brought against a decision by the administrative authority with respect to pre-election issues. It also states the conditions for judiciary courts to refer industry-wide or company collective bargaining agreements to the Supreme Court so that the latter gives its opinion on the interpretation of such agreements (D. n°2016-660 of 20 May 2016, Official Journal of 25 May).