Termination of employment

Grounds for termination

May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?

An employer must have a real and serious cause to terminate the employment agreement and must comply with all applicable dismissal procedures (on economic or personal grounds). There is no legal definition of what is a real and serious cause. The judge will determine on a case-by-case basis whether or not the dismissal was legitimate. The cause must be ‘real’, meaning exact, precise and objective, and ‘serious’, which justifies the termination of the contract.

Notice

Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?

Whatever the cause for a contract’s termination (except for serious misconduct or gross negligence), an employer must give a notice period prior to dismissing an employee (generally between one and three months, but sometimes up to six months). The employer may release the employee from working during the notice period and instead pay an indemnity in lieu of notice. The indemnity is calculated on the basis of the base salary, bonuses and benefits that the employee would have received if he or she were to work during the notice period. The employee may ask to be released from working during the notice period, and when the employer accepts the employee’s request, no indemnity shall be paid.

In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?

Serious misconduct and gross negligence are legal bases for terminating an employment contract without allowing the employee to serve his or her notice period and without having to pay him or her an indemnity in lieu of notice and severance pay. The qualification used by the employer is not binding on the judge, who can order the employer to pay an indemnity in lieu of notice.

Severance pay

Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?

Yes. The employer must pay the dismissed employee a minimum legal severance pay, provided that the employee has been employed for a minimum of one year by the company for dismissals notified before 23 September 2017, and eight months for dismissals notified since 24 September 2017. This severance pay is paid whether the grounds for dismissal are personal or economic. For dismissals notified before 26 September 2017 (some litigation relating to which is still pending), the severance pay is equal to one-fifth of a month’s salary for each year of service, increased by two-fifteenths of a month’s pay per year of service longer than 10 years (ie, one-third of a month’s pay per year of service after 10 years). For dismissals notified since 27 September 2017, the severance pay is equal to one-quarter of a month’s salary per year of service for each year of service up to 10 years, and one-third of a month’s salary per year of service for each year of service after 10 years.

The collective bargaining agreement may provide for higher severance pay in lieu of the legal requirement.

Procedure

Are there any procedural requirements for dismissing an employee?

Yes. The procedure to dismiss an employee is highly formalistic. The employer or its representative must ask the employee to attend a preliminary meeting in order to discuss his or her potential dismissal. After this meeting, the employer must send a dismissal letter to the employee that indicates, among various requirements, the reasons for the dismissal and the duration of the notice period. For dismissals notified since 18 December 2017, the employee can request precision regarding the reasons for his or her dismissal within 15 days of the notification. In the absence of such a request by the employee, the dismissal cannot be void for insufficient motivation.

The applicable procedure depends on the nature of the dismissal, that is, for personal reasons (including disciplinary grievances) or for economic reasons, and on the number of employees to be dismissed as well as on the number of employees in the company.

When applicable, the employer has to consult its works council or social and economic committee regarding the economic grounds and on a redundancy plan when the number of employees who are made redundant exceeds certain thresholds. The works council or social and economic committee has no veto power and simply provides its opinion. The employer must notify the council of the procedure and must look for any redeployment solution.

Employee protections

In what circumstances are employees protected from dismissal?

Employee representatives are covered by specific protection. A special procedure (authorisation of the labour inspector) must be followed should the employer wish to terminate the employee representatives’ contracts.

Moreover, as a general rule, it is illegal for an employer to treat an employee differently based on the categories listed in question 2 when terminating an employment contract. Specific procedures apply where the employment contract is suspended (eg, for illness or maternity). Termination of fixed-term employment contracts is also subject to specific rules.

Mass terminations and collective dismissals

Are there special rules for mass terminations or collective dismissals?

Yes. The procedure is highly complex and formalistic.

The law provides for two different methods of carrying out a collective dismissal (10 or more employees dismissed in a company of 50 or more employees): negotiating a collective agreement or drawing up a ‘unilateral document’.

A collective agreement must be negotiated and signed with one or several trade unions. The agreement must provide details of the content of the collective redundancy plan (measures aimed at avoiding or at least mitigating the effects of redundancies, including redeployment measures) and can also contain provisions concerning the consultation procedure to be carried out with the works council or social and economic committee. The trade union representatives may be assisted by an expert paid by the company.

The collective agreement is sent to the labour authorities at the end of the works council or social and economic committee consultation period for checking. If the labour authorities approve the agreement within a 15-day period, the employer can then dismiss the employees.

A unilateral document drafted by the employer sets out the terms of the collective redundancy plan and other specific details concerning the redundancies. This document is then submitted to the works council or social and economic committee for consultation. The works council or social and economic committee is also informed and consulted on the restructuring leading to the collective dismissals.

The final document is sent to the labour authorities at the end of the works council or social and economic committee consultation period for checking. If the labour authorities validate the agreement and the project within a 21-day period, the employer can then dismiss the employees.

The law provides for a maximum period for the works council or social and economic committee to give its opinion following consultation on the redundancy process (two to four months depending on the number of employees to be dismissed). If the works council or social and economic committee does not give its opinion by the end of this period, it will be deemed to have been properly consulted.

If the works council or social and economic committee elects to be assisted by an expert, the law also provides for a specific framework and timing for the exchange of information and questions, and requires the expert to render its report 15 days before the end of the maximum period for consultation.

Class and collective actions

Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?

Employees may assert labour and employment claims on an individual basis. However, several employees may petition the court and join their claims into one sole procedure.

Class actions are only allowed in the specific field of discrimination. They can pursue two different aims: to enjoin an infringement; and to establish the liability of the employer to obtain compensation for the prejudice suffered. Class actions can only be exercised by some particular associations or by a trade union representative of employees, before a civil court in order to establish that several applicants for a job, internship or training period at a company or several employees are subject to direct or indirect discrimination. A formal notice to cease the infringement or to repair the prejudice sent to the potential defendant is a prerequisite. No class action can take place until a six-month period has elapsed since the date on which the potential defendant received the formal notice, if he or she has not refused to answer in the meantime. Any term of a contract that aims to prohibit anyone from taking part in a class action is null and void.

Mandatory retirement age

Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?

No. Retirement ages are defined by statute and may not be imposed by the employer. Except in a limited number of situations that are strictly regulated (eg, public companies or companies governed by specific statute), the employer may not pension off an employee before the age of 70, and covenants imposing automatic retirement from a certain age are therefore unenforceable. Below the age of 70, the employee’s express consent is required for retirement, and a specific procedure applies.