Specific consultation in the event of restructuring: no obligation to consult the Social and Economic Committee upstream on strategic orientations

In a decision dated September 21, 2022 (n°20-23.660), the French Supreme Court settles the question of the articulation of the consultation of the Social and Economic Committee (SEC) on a specific project with the recurrent consultation on the strategic orientations.

In this case, a Catholic Education Management Organization ("OGEC") had informed its SEC of a project to close a high school. The SEC was also to be consulted, a few days later, on the strategic orientations. However, the SEC contested this timing and lodged a claim in courts. According to the SEC, the consultation on the proposed closure of the high school should have been preceded by the consultation on the strategic orientations. The Tribunal, and then the Court of Appeal of Paris, agreed. The consultation on the closure project was suspended until the consultation on the strategic orientations was completed.

However, the French Supreme Court censured this reasoning, judging that the punctual consultation on the modification of the economic or legal organization of the company, or in case of restructuring and reduction of the workforce, is not subordinated to the prior consultation of the SEC on the strategic orientations of the company. In an explanatory note, the French Supreme Court recalls that the consultation on the strategic orientations has been defined by the legislator as independent from the punctual consultations. It differs from the latter by its object - it must allow a prospective discussion on the general future of the company, whereas the specific consultations concern a determined project - and by its temporality - it takes place every year unless an agreement provides for another periodicity, which cannot exceed three years.

This decision follows a previous one of September 30, 2009 (n°07-20.525), which stated that the consultation of the SEC on a project of economic dismissal and the consultation on the annual evolution of jobs and qualifications were autonomous.

Payment of an annual bonus provided for by a collective bargaining agreement: strict assessment of the condition of presence by the French Supreme Court

In this case, an employee was employed as a qualified airport security operator. The employment relationship was governed by the collective bargaining agreement for prevention and security companies and in particular by the provisions of Annex VIII of this collective bargaining agreement, which provides in its article 2.5 for the payment of an annual airport security bonus.

As a result of an occupational accident, this employee's contract was suspended as of November 20, 2014. Not having received the annual bonus, he lodged a claim in front of the Labor Court for a backpay of the bonus for the years 2015 and 2016, during which his employer had considered that he was not eligible for it given the suspension of his contract.

The judges ruled in favour of the employer and dismissed the employee's claim on the grounds that, as he was not actually present in the company on October 31, 2015 and 2016 due to his sick leave, he could not receive this bonus.

However, this analysis was censured by the French Supreme Court in a decision dated October 26, 2022 (n°21-15.963). The Court ruled that the condition of presence of the employee means the presence in the company's workforce on October 31 of each year, based on a strict application of the collective bargaining agreement provisions.

This interpretation, which is favourable to the employee, should encourage employers to be precise when drafting a contractual clause concerning the payment of a bonus. Employers who intend to exclude employees whose contracts are suspended from receiving the bonus should make it clear that payment of the bonus is conditional on the continuous effective presence in the company.

Risk of nullity of the dismissal: to limit the condemnation, the employer must ask the judge to examine the other dismissal grounds that are invoked

If the dismissal is ruled null and void, the scale provided for in Article L. 1235-3 of the French Labor Code, relating to unfair dismissals, does not apply.

An employer who, in the dismissal letter, relies on several dismissal grounds, may however ask the judge to examine all the dismissal grounds invoked in order to limit the amount of damages, in accordance with the provisions of article L. 1235-2-1 of the French Labor Code. However, this request must be expressly made to the judges at the hearing on the merits, as the French Supreme Court recently ruled in a decision dated October 19, 2022 (no. 21-15.533).

In this case, an employee, working as a dental assistant, had lodged a claim of constructive dismissal. One month later, her employer dismissed her for personal reasons. The dismissal letter referred to several breaches and referred to the employee's recent action lodged in courts. For this reason, the dismissal was ruled null and void due to an infringement of the employee's fundamental rights. The Court of Appeal awarded the employee 16 months' salary as damages for null and void dismissal, the ceiling of 10.5 months' salary for employees with 11 years of length of service not being applicable, the dismissal being null and void. The employer did not contest the amount requested by the employee in courts.

The employer appealed to the French Supreme Court and criticized the decision of the Court of Appeal, on the basis of Article L. 1235-2-1, for not having taken into account the other dismissal grounds referred to in the dismissal letter in order to determine the amount of damages awarded to the employee.

The decision of the French Supreme Court is clear: the provisions of article L. 1235-2-1 offer the employer a defence on the merits that must be submitted to the adversarial debate. Consequently, the judges will only examine this defence if the employer asks them to do so - which was not the case in this instance.

When this request is made by the employer, the judges must take into account the other dismissal grounds invoked in the dismissal letter in order to assess the damages to be awarded to the employee, which may not be less than six months' salary.

It should therefore be borne in mind that, where there is a risk that the dismissal be ruled null and void and where the dismissal letter mentions several dismissal grounds, the employer must ask the court, in the alternative, to take account the other dismissal grounds invoked in order to limit the amount of damages for null and void dismissal that may be awarded.

The decision rendered by the French Supreme Court also reminds us that in case of null and void dismissal, the employer can only be ordered to reimburse the unemployment benefits to "Pôle Emploi" (French unemployment agency) in the cases mentioned in article L.1235-4 of the French Labor Code.

Authored by Alexandra Tuil and Hélène de Nazelle.