(Cass. Soc., 18 January 2011, no. 09-69.199; Cass. Soc., 1 February 2011, nos. 10-30.045 to 10-30.048)
These two cases do not challenge the principle of autonomy governing the economic grounds for dismissal arising from a cessation of business, provided the cessation is not the result either of wrongful carelessness or misconduct on the part of the employer. However, in the case of restructuring within corporate groups, the Court has extended the scope of its review to other companies in the group for purposes of assessing the validity of such grounds.
In the first case (no. 09-69.199), a foreign holding company, whose financial position was not under threat, had decided to close one of its French subsidiaries. Finding that there was a "confusion of interests, activities and leadership" between the foreign holding company and its French subsidiary, which was under the control of the holding company, the Court concluded that these two companies should be regarded as the co-employers of the employees dismissed by the French subsidiary. The Court thus laid down the principle according to which "where the employee has as co-employers two entities forming part of the same group, the cessation of business of one of these entities shall only constitute economic grounds for dismissal if this is justified by economic difficulties, technical modifications or the need to maintain the competitiveness of the sector of activity of the group to which they belong". In this case, the cessation of activity is not sufficient in itself to justify redundancy. However, the situation of co-employment must first be recognized from a legal point of view.
In the second case (nos. 10-30.045 to 10-30.048), the issue of co-employment was not raised. In this case, a French company that was wholly owned by a holding company had ceased all commercial activity and had made all of its employees redundant. Finding that the decision had been taken by the group, the Court held that "it is not forbidden for it to take into account the economic situation of the company for assessing the conduct of the employer", which, because it had simply wanted to make savings and improve profitability rather than safeguard competitiveness, had acted with blameworthy carelessness and the dismissals were therefore devoid of any real and serious cause.