Grounds for Termination
In the case of an indefinite-term employment contract, there should be real and serious grounds for dismissal. There are two types of valid grounds: personal grounds and economic grounds.
The redeployment efforts of a collective dismissal should be carried out throughout the group in France. The employer should offer individual and precise offers to the targeted employees. In case of failure to comply with these rules, the dismissal may be considered unfair by the Labour Courts.
The employee may request additional information on their dismissal within 15 days of receipt of the dismissal letter. The employee may dispute the grounds for dismissal before a Labour Court.
Is severance pay required?
The employee made redundant will receive a dismissal indemnity calculated based on the employee’s years of service, as well as any accrued and untaken paid vacation.
Is a Separation Agreement required or considered best practice?
The legislator imposes that a separation agreement, other than a dismissal or resignation, should be done through a specific procedure called the “rupture conventionnelle” (mutually agreed termination), which is subject to specific regulations and conditions. Hence, the “rupture conventionnelle” is the only method to terminate an employment contract by mutual agreement.
Remedies for employee seeking to challenge wrongful termination
When seeking remedies, the employee may request before the Labour Courts:
- the nullity of the dismissal (only possible where a text provides for a nullity, such as harassment or discrimination): as appropriate, reinstatement within the company or compensation of unfair dismissal;
- damages for unfair dismissal (e.g. insufficient economic grounds or insufficient redeployment efforts in a redundancy, or gross misconduct not demonstrated): these damages are now set out in a binding grid containing minimum and maximum amounts, based on the employee’s length of service.
- damages for irregularity of the dismissal (i.e. the dismissal procedure was not correctly followed): damages equal to a 1-month salary maximum in the event that the dismissal is considered as grounded.
- damages for any additional demonstrated prejudice.
Please note that when entering into a “rupture conventionnelle”, the remedies are limited. The employee may only challenge the mutually agreed termination in Court within a year of the homologation or authorisation and only on the grounds that he did not consent to signing the agreement.
The new “Sapin II Law” fully named the “Law on Transparency, the Fight against Corruption, and for the Modernisation of Economic Life” puts in place new rules for whistleblowing in France. The Sapin II expands extra-territorial reach for French prosecutors. The law applies fully to corruption by French companies overseas and foreign companies who have a presence in France. It creates new obligations for companies to take an active role in preventing corruption. Companies with over 500 employees and/or an annual turnover in excess of EUR 100m must put in place a framework to allow for accountability.
The law puts in place eight mandatory measures for a corruption prevention program. So far, these include a code of conduct to be integrated into the internal regulations of the company; an internal whistleblowing mechanism; ongoing risk assessments; due diligence regarding clients, suppliers and intermediaries; internal and external controls; training; a roster of disciplinary sanctions; and an internal audit of the program.
The law creates a new national anti-corruption agency called Agence Française Anticorruption (AFA). The law requires all companies with more than 50 employees to establish a whistleblower mechanism and provide protection against retaliation guaranteeing confidentiality. The system is different from its UK and US counterparts and only applies to disinterested parties. Whistleblowers receive immunity from criminal prosecution. Whistleblowers must first use the internal whistleblowing channels before blowing the whistle to the public authorities and the press.