The ordinance “regarding the predictability and securing of employment relationships” establishes a mandatory scale of allowances that an Employment Tribunal may grant in case of abusive dismissal or dismissal without real and serious grounds. From now on, judges have restricted discretion regarding the award of damages for the prejudice suffered: they may not go beyond floor and ceiling thresholds while adjudicating.
Apart from the government’s commitment to provide greater predictability to companies (and employees) by structuring indemnities awarded by the industrial tribunals, it appears from the scale that the amount of compensation likely to be allocated to employees with minimal seniority has substantially declined.
Hence, the minimal statutory six months’ salary allowance provided for by the law to an employee with at least two years’ seniority who has been dismissed without any real and serious grounds from a company with at least 11 employees is now replaced by a minimum three months’ salary allowance (for the same category of employee).
In addition, the scale drastically limits the maximum allowances which could potentially be paid to employees with minimal seniority. Thus, employees having less than one year’s seniority are allowed to collect a maximum of one month of salary as compensation. Afterwards, this threshold is grossed up by more or less one month per year of seniority up to eight years (e.g., maximum two months for employees ranging from one to two years’ seniority, maximum 3.5 months for employees ranging from two to three years’ seniority, maximum four months for employees ranging from three to four years of seniority).
One should note that the present scale does not apply to unlawful dismissals (those related to discrimination or harassment) or to dismissals which occurred in violation of fundamental freedoms. For these cases, the fixed compensation equivalent to six months’ salary remains unchanged. Finally, it is possible to claim complementary compensation due to specific circumstances of termination (abrupt or vexatious).
- Entry into force: the present scale applies to dismissals notified subsequent to the ordinance publication date (i.e., after September 23, 2017). Dismissals notified prior to this date remain subject to previous legislation.
Moreover, the ordinance reduces deadlines for lawsuits related to employment contract termination: from now on, the deadline is set at 12 months, instead of the previous two year period.
It is worth noting that:
- the new deadline does not apply to either discrimination or harassment cases (five year deadline), or to lawsuits related to employment contract performance (two year deadline);
- in case of redundancies on economic grounds, the time limit for contestation will only be effective if mentioned in the letter of dismissal.
- Entry into force: the new deadline for lawsuits is applicable to statutes of limitations running at the date of publication of the ordinance.