Dismissal due to business reasons in France

AutorFrancis Kessler
CargoProf. Sorbonne Law School, University Paris 1. Attorney, Senior counsel, Gide Loyrette Nouel, Paris
IUSLabor 1/2018
Francis Kessler
Prof. Sorbonne Law School, University Paris 1
Attorney, Senior counsel, Gide Loyrette Nouel, Paris
Employment relationships in France are highly regulated, in particular with regard to
termination of employment. Employment at will does not exist in France. However,
unless a collective bargaining agreement or the employment contract provides
otherwise, an employment contract can be terminated without any restrictions during
the probationary period.
After the probationary period, an employment contract can only be terminated in certain
Beyond traditional dismissals and resignations, French Law n°2008-596 of 25 June
2008 created the “contractual termination”. Such a termination enables the employer
and one employee to mutually agree about the termination of the employment contract,
under the control of the Labor Administration
1. This flexible mechanism is solely
applicable to individual termination.
However, Ordinance n°2017-1387 of 22 September 2017 created “the Contractual
Collective Termination" which enables to terminate employment contracts through a
negotiated collective bargaining agreement2. The content of the voluntary departures
plan is determined by the collective bargaining agreement, which is submitted to the
administration for validation. These voluntary departures plans are autonomous from
social plans: the departures are decided on a voluntary basis and exclude any layoffs.
Regarding indefinite-term employment contracts, an employer can terminate the
contract at any time, but he must be able to justify from a real and serious ground of
termination3, and it must comply with the applicable dismissal procedure which varies
depending on the type of dismissal.
Real and serious cause means that the dismissal has to be exact, specific, objective and
of a sufficiently serious nature to justify the dismissal. This requirement applies to any
1 Labour Code, article 1237-11 et seq
2 Labour Code, article L. 1237-17 et seq
3 Labour Code, article L. 1233-2, par. 2,

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