An employee who is unfairly dismissed with immediate effect is entitled to:
- severance pay, if he or she worked at the company for at least five years; and
- compensation in lieu of notice.
However, an employee who resigns as a result of his or her employer's gross misconduct – which is later deemed to be justified – is not entitled to receive severance pay or compensation in lieu of notice. The Constitutional Court recently considered whether this disparity breaches the equal treatment principle established under Article 10bis(1) of the Constitution.
Articles L 124-6 and L 124-7 of the Labour Code establish the right to compensation in lieu of notice and severance pay, respectively, for "employees dismissed by their employer with immediate effect and whose dismissal is then judged to be unfair by the employment tribunal". However, the articles do not provide the same compensation for "employees who have terminated their employment contract due to the gross misconduct of their employer and whose resignation is then deemed to be justified and well-founded by the employment tribunal", thus treating these two groups of employees differently.
Following two February 22 2016 Eighth Chamber of the Court of Appeal rulings (Cases 40356 and 40736), the Constitutional Court considered whether these articles comply with the principle of equality before the law under Article 10bis(1) of the Constitution.(1)
The court first considered whether employees who have been unfairly dismissed with immediate effect and employees who have resigned with good reason due to their employer's gross misconduct are comparable. For the court, the two groups are comparable, as in both cases the termination of the employment relationship with immediate effect is due to the employer.
The court continued its analysis by comparing the rights of employees in both groups. It observed that employees in the second group are entitled to damages only when the resignation is justified, while employees in the first group, if the dismissal is unfair, can claim:
- compensation in lieu of notice (Article L 124-6); and
- legal severance pay (Article L 124-7).
In view of the above, the Constitutional Court ruled that Articles L 124-6 and L124-7 of the Labour Code are contrary to the equality of treatment principle under Article 10bis(1) of the Constitution in cases where they grant employees who have been unfairly dismissed with immediate effect because of their employer's gross misconduct a "difference of treatment that is not based on objective disparities or rationally justified, adequate or proportional to its purpose".
For further information on this topic please contact Guy Castegnaro or Ariane Claverie at Castegnaro by telephone (+352 26 86 82 1) or email ([email protected] or [email protected]). The Castegnaro website can be accessed at www.castegnaro.lu.
(1) Constitutional Court, July 8 2016, Cases 123/16 and 124/16.