For several months, various French Courts have judged that the absence of an economic reason for collective redundancies is a valid ground to cancel the procedures and makes the consultation with staff representatives null and void. The French Supreme Court of Appeal's decision in May this year in the Viveo case was eagerly anticipated, therefore.
The Supreme Court of Appeal in Viveo overruled a decision of the Court of Appeal of Paris in May last year that had stated that the lack of sufficient economic reasons behind redundancies is a valid ground for cancelling a redundancy procedure. Instead, according to the Supreme Court, the validity of the social plan and the economic reasons for the collective redundancies are independent issues. The Supreme Court emphasised that the cancellation of the procedure can only be justified by the absence, or inadequacy, of the redeployment measures associated with the social plan.
But despite the clarity of the Supreme Court’s decision, the High Court of Justice in Créteil recently gave a ruling that contradicts the Viveo decision. The High Court considered that the validity of a redundancy procedure is based on whether or not there are sufficient economic reasons. According to the High Court, a redundancy procedure is void in the absence of an economic reason. The tribunal had ruled that the employer was in breach even though the company's staff representatives were consulted and despite the fact that there was a valid economic reason.
The High Court has been criticised for interfering in the company's management; in effect, the High Court is controlling a managerial decision even though French law does not specifically authorise this. However, very recently, the Court of Appeal of Versailles agreed with the French Supreme Court of Appeal, ruling that the cancellation of a social plan cannot rely on the absence of an economic reason.