French Labour Law: Employees, executives, seniors executives: 4 tips to avoid the capping of compensation for unfair dismissal implemented by the Macron ordinance

Macron Ordinance N°. 2017-1387 of September 22nd, 2017 on the predictability and securing of employment relationship, provides for a capping on compensation for unfair dismissal with a minimum scale (Barème minimum) and a maximum scal (Barème maximum).

In our brief of September 5th, 2017 titled "What Changes for employees with Capping of compensation for unfair dismissal", we analyzed the changes to the ceilings on the severance pay system.

The capping (plafonnement) of the Macron ordinance will inevitably weaken and contributed to the precarious of employees in companies because compensation for unfair dismissal will be priced and it will no longer be dissuasive, especially for employees under 5 years seniority.

  • Take for example an employee who has 2 years’seniority in a company with more than 10 employees and whose dismissal is without cause (unfair dismissal). Whereas previously, this employee would have obtained a minimum compensation of 6 months of gross salary to labour courts, the dismissal compensation planned by the Macron Ordinances is now fixed at 3.5 months of salary, that is almost two times less.
  • Now take an employee who has 5 years’seniority in a company with more than 10 employees, he can now obtain, a maximum compensation of 6 months salary in case of unfair dismissal but will also be applied the minimum amount of 3 months' salary provided for in the scale.
  • Finally, take an employee who has 10 years’seniority in a company with more than 10 employees, he can obtain in the event of unfair dismissal, a compensation varying between the minimum amount of 3 months and a ceiling of 10 months salary.

Having said that of these new rules, the purpose of this article is to present four simple tips to avoid the ceiling of the Macron ordinance and to secure your employment contract.

1) Tip n° 1: Negotiate a "golden parachute" in your employment contract and / or negociate longer contractual notice period

To negotiate a "golden parachute" is THE Council (almost) unstoppable

In practice, this advice is however intended for executives (cadres supérieurs) or senior managers (cadres dirigeants) who are most often granted such clauses.

However, any employee may attempt to negotiate a "golden parachute" with his new employer or current employer.

The "golden parachute" or contractual compensation allows to avoid the Macron scale (Barème) provided for by ordinances.

It consists in providing, in advance and contractually, the amount of compensation that will be due in the event of dismissal instead of legal or contractual compensation.

This contractual compensation is in addition to the possible compensation for unfair dismissal of Macron ordinances.

It can be negotiated freely and therefore be much higher than the scale.

However, it should be noted that these "golden parachutes" are penal clauses (clauses pénales) and as such, the compensation provided can be reduced to court, if the judge considers them excessive.

Even if today, this kind of clause is rather reserved for the executives, any employee whose know-how is sought, as it is dismissed by his employer, can negotiate a "golden parachute" in order to avoid the Macron scale and thus dissuade his employer from dismissing him.

Example of "golden parachute" clause to insert in your employment contract: "In the event of dismissal or termination of the employment contract at the initiative of the employer, the employee will receive a contractual dismissal compensation of 6 or [12] or [18] or [24] months of gross salary which adds to the conventional dismissal compensation of the collective agreement applicable to the contract. "

Another possibility to increase the compensation due in the event of a break-up is the negotiation of a longer contractual notice (préavis) than that provided by the applicable collective agreement or the law.

Longer contractual notice (préavis contractuel) (for example 6 months, 9 months, 12 months) ensures that the employee's remuneration is maintained during this period in order to amortize his dismissal and, if necessary, to seek a new job more peacefully.

2) Tip n ° 2: Plead to the labor courts that you are in one of the 8 cases of exclusion of capping provided for by Article L. 1235-3-1 of the french Labour Code.

Cases of exclusion from the capping of compensation for dismissal without real and serious cause are expressly provided for in Article L. 1235-3-1 of the Labour Code (art.2 ord n ​​° 2017-1387 of  September 22nd, 2017).

In this respect, Article L. 1235-3 is not applicable when the judge finds that the dismissal is tainted with one of the 8 nullities provided for in the second paragraph of Article L. 1235-3-1 of the Labour Code.

The "nullities" (nullités) are those relating to the violation of a fundamental freedom (violation d’une liberté fondamentale), to acts of moral or sexual harassment(harcèlement moral ou sexuel) under the conditions mentioned in Articles L. 1152-3 and L. 1153-4, to a discriminatory dismissal under the conditions provided for Articles L. 1134-4 and L. 1132-4 or following an action in court, for gender equality at the workplace under the conditions mentioned in Article L. 1144-3 and in case of denunciation of crimes or misdemeanors, or the exercise of a mandate by a protected employee mentioned in chapter I of title I of book IV of the second part, as well as to the protections of certain employees in application of articles L. 1225-71 and L. 1226-13.

In these cases, when the employee does not request the continuation of his employment contract or his reinstatement is impossible, the judge awards him an indemnity, paid by the employer, which cannot be less than the wages last six months (no matter the size of the company).

The indemnity is then payable without prejudice to the payment of the salary, which would have been collected during the period covered by the invalidity when it is due pursuant to the provisions of Article L. 1225-71 and the protective status and, where appropriate, legal, contractual or conventional compensation.

  • Case 1: Nullity related to the violation of a fundamental freedom (liberté fondamentale)

The Macron scale (Barème Macron) will be rejected as soon as such dismissal is pronounced in violation of a fundamental freedom.

This would be the case, for example, of a dismissal based on the exercise by the employee of his right to strike.

  • Case 2: Nullity related to acts of moral or sexual harassment (harcèlement moral ou sexuel) under the conditions mentioned in Articles L. 1152-3 and L. 1153-4

Capping on compensation will also not apply each time the dismissal of the employee is made in a context of moral or sexual harassment.

However, the courts are (and probably will be) very strict in the assessment of moral or sexual harassment or violation of a fundamental freedom.

  • Case 3: Nullity relating to a discriminatory dismissal (licenciement discriminatoire) under the conditions provided for in Articles L. 1134-4 and L. 1132-4

Similarly, no capping will apply to dismissals that are discriminatory, that is to say, pronounced because of the origin of the employee, his sex, his morals, his sexual orientation, his gender identity, age, family status or pregnancy, genetic characteristics, particular vulnerability resulting from economic status, apparent or known to the perpetrator, belonging or non-belonging, true or assumed , an ethnic group, a nation or an alleged race, its political opinions, its trade union or mutual activities, its religious beliefs, its physical appearance, its surname, its place of residence or its bank domiciliation or because of his state of health, loss of autonomy or disability, ability to express himself in a language other than French.

  • Case 4: Nullity of dismissal following a lawsuit

The employee who is dismissed consecutively to the exercise of a legal action to assert his rights will not be able to be opposed against the scale provided by the ordinances.

  • Case 5: Nullity of a discriminatory dismissal in the matter of professional gender equality under the conditions mentioned in Article L. 1144-3 of French Labour Code

In the same way, the scale will be rejected in the case of a dismissal following a legal action taken by the employee on the basis of provisions relating to professional gender equality.

  • Case 6: Nullity of dismissal in case of denunciation of crimes and misdemeanors

An employee who has been dismissed as a result of his denunciation of crimes or misdemeanors of which he is aware, cannot be opposed to the scale of Macron ordinances.

This is particularly the case of employees whistleblowers who would be sanctioned following the denunciation of the practices of their employer.

  • Case 7: Nullity of dismissal linked to the exercise of a mandate by a protected employee (salarié protégé) mentioned in Chapter I of Title I of Book IV of Part Two (see "Tip 4")
  • Case 8: Nullity related to a dismissal because related to the protections of certain employees in application of articles L. 1225-71 (dismissal related to the state of pregnancy) and L. 1226-13 (accident at work or illness)

Finally, dismissal in breach of special protection such as protection against dismissal in case of pregnancy or accident at work or occupational disease will avoid the ceiling.

3) Tip n° 3: Make claims to labour courts other than a claim for compensation for the prejudice caused by your unfair dismissal: ex: request for overtime payment, allowance for covert work (travail dissimulé), damages for moral harassment, recall bonus, salary reminder related to unequal treatment, etc.

Example 1: Requests for overtime (heures supplémentaires) and covert work (travail dissimulé)

Overtime claims are not included in capping provided by Macron Ordinances.

For employees whose working time is determined on the basis of a certain number of days (forfait jours), it is possible to ask for the cancellation of the working time organization if there is no control of the workload (charge de travail) related to this organization; in this case, the employee can obtain payment of his/her overtime within the limit of the prescription, provided he can prove it.

Similarly, a salaried executive who does not fulfill the 4 legal conditions relating to this status (ie: autonomy, great responsibility, salary among the highest of the company and belonging to the management of the company) may request nullity of this status and get the payment of his overtime (heures supplémentaires) if he can prove it (proof by an agenda with the start and end time each day, emails sent early in the morning and late at night etc.).

Example 2: Request a bonus

A bonus request may also be added to dismissal requests. An employee may request a bonus if the targets assigned to him/her are unrealistic and not reasonable, or if they were not brought to his attention at the beginning.

In such a case, the employee is entitled to claim 100% of the bonus he could have claimed if he had achieved all of his objectives. Again, no capping applies.

Example 3: Claim for damages for harassment (harcèlement moral ou sexuel)

Likewise, the employee who demonstrates that he is in a situation of harassment, whether moral or sexual, is entitled to claim damages to the Labour Court for the damages suffered.

To do this, the employee must provide elements likely to suggest the existence of a situation of harassment.

In this case, the damages may be cumulated with the dismissal compensation without capping limit.

Example 4: Salary reminder related to unequal treatment

The employee may also make a request for salary reminder based on unequal treatment, as long as he demonstrates that he received a lower salary than his colleagues in the same position with equivalent qualifications and seniority.

Once again, no cap applies to such a request.

4) Tip n°4: Get a union mandate (représentant syndical), a staff delegate (délégué du personnel) or a workers council member (membre du comité d’entreprise) to make it harder to fire

A warrant is the best way to deter your employer from firing you.

Your employer may reproach you for "instrumentalizing your mandate" but he will not be able to do anything except to challenge your election or appointment to the Court (Tribunal d’instance).

Protected employees (union mandate or staff representative) cannot be dismissed without authorization from the labor inspectorate (Inspection du travail).

However, labor inspectors are reluctant and very strict to grant the authorization of dismissal of a protected employee.

An employee who warrants a mandate will therefore be in practice better protected against dismissal.

He will also be better compensated if he is dismissed without authorization since, if necessary, his dismissal will be void and he will be able to apply for reinstatement and an eviction indemnity corresponding to the wages he should have received between the date of his dismissal and the expiry of the period of protection.

Frédéric CHHUM

Avocats à la Cour (Paris et Nantes)

. Paris : 4 rue Bayard 75008 Paris - Tel: 01 42 56 03 00 ou 01 42 89 24 48
. Nantes : 41, Quai de la Fosse 44000 Nantes -  Tel: 02 28 44 26 44

e-mail :

Blog :!/fchhum



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