Definition of dismissal

The dismissal is a termination of the employment contract of the employee, at the initiative of the employer. It is only permitted for open-ended contracts. The employer may dismiss the employee for a reason related to the employee’s person (personal reason), or for a reason unrelated to the employee’s person (economic reason). In all cases, the dismissal must be based on a real and serious reason.

The main reasons for dismissal

In labor law, there are different types of dismissal. Choosing the « right » dismissal is essential for the employer who must be able to justify it.

Disciplinary dismissal

It is motivated by a problem of behavior of the employee.

There are 3 different degrees of misconduct: :

  • Simple misconduct: the employee’s attitude makes it impossible for him/her to remain in the company (Cass. soc. October 25, 2007, n°06-43.101) ;
  • Serious misconduct: this is the result of a fact or a set of facts attributable to the employee which constitutes a violation of the obligations arising from the employment contract or the employment relationship of such importance that it makes it impossible for the employee to remain in the company during the notice period (Cass. soc. February 26, 1991, n°88-44.908) ; 
  • Gross misconduct: lhe employee’s misconduct will constitute gross misconduct when it is committed with the intention of harming the employer or the company (Cass. soc. November 29, 1990, n°88-40.618).

Some examples : it constitutes gross misconduct for an employee to send a letter to his employer containing an insulting assessment of his superior (Cass. soc. April 28, 1994, n°92-43.917). It is also a serious misconduct for a foreign employee to provide his employer with false documents (notably a false residence permit). It is a gross misconduct for an employee to hit another employee who refused to join a strike movement (Cass. soc. May 26, 1981, n°79-41.623).

I invite you to read the article of the blog which gathers a small “best of” cases of serious misconduct encountered in case law. 

Dismissal for physical unfitness and impossibility of reclassification

It is pronounced following a notice of unsuitability of the employee for his or her job issued by the occupational physician and the impossibility of reclassifying the employee within the company or the group.

Example : the fact that a handling agent employee has been declared unfit for any position, and in particular for positions requiring the carrying of heavy loads, and has not been able to be reclassified within the company or the group.  

Dismissal for professional inadequacy

This concerns the employee’s inability to perform the tasks required by his or her position.

For example : a technical director who does not carry out his duties satisfactorily: in this case, he recommended unprofitable investments and left the company in a difficult situation (Cass. soc. December 17, 1976, n°75-41016).

Dismissal for refusal of a modification of the contract or of the working conditions

An employee may be dismissed for refusing a change in his working conditions, by virtue of the employer’s power of direction. The dismissal following such a refusal is based on a real and serious cause (Cass. soc. May 3, 2012, n°10-27.152).

In principle, an employee cannot be dismissed for refusing a change in his employment contract. However, there are some exceptions.

For example : an employee who refuses a modification of his employment contract resulting from the application of a collective performance agreement (art. L. 2254-2 of the French Labor Code).

Termination of the employment contract of a foreign employee in an irregular situation

The employer may terminate the employment contract of a foreign employee who has not obtained a renewal of his or her work permit, or who has been in an irregular situation since his or her hiring (Cass. soc. Octobre 1st, 2014, n°13-17.745 and Cass. soc. July 4, 2012, n°11-18.840).

Dismissal for economic reasons

The employer may also dismiss for economic reasons. It is « carried out by an employer for one or more reasons not inherent to the employee’s person resulting from a job elimination or transformation or from a modification, refused by the employee, of an essential element of the employment contract » (art. L. 1233-3 of the French Labor Code).

In the context of an economic dismissal, the employer must be able to prove the existence of an economic reason for the dismissal. Several obligations will fall to the employer in the context of such a procedure, in particular the search for redeployment positions for the employees concerned.

The economic dismissal can be individual or collective.

Risks related to dismissals

The dismissal may be contested by the employee before the Conseil de Prud’hommes (industrial tribunal). The employer must then be able to demonstrate that the dismissal was carried out in compliance with the applicable procedure and that the reason given is real and serious.

The dismissed employee can make various claims for compensation for his or her loss. The Conseil de Prud’hommes (industrial tribunal) verifies that the procedure has been respected, that the reason for dismissal is real and serious and, if necessary, orders the employer to pay damages.

In order to further secure companies, which were faced with unpredictability as to the amount of the penalties incurred, the so-called “Macron” ordinances introduced a compensation scale in case of dismissal without real and serious cause. The article L 1235-3 of the French Labor Code sets the scale of compensation to be paid to an employee who is dismissed for a reason that is not real and serious, and who is not reinstated in the company.

The scale sets minimum and maximum amounts of compensation (in gross wages) that may be awarded, depending on the employee’s seniority within the company. It also distinguishes the amounts according to the number of employees in the company, since the amounts differ if the company employs less than 11 employees.
The scale allows the employer to estimate the cost to the company of a dismissal that would be declared without real and serious cause by the judge, and to anticipate it.

However, the scale will not be applicable in certain cases listed in article L 1235-3-1 of the French Labor Code: : 

  • Violation of a fundamental freedom ;
  • Acts of moral or sexual harassment ;
  • Discriminatory dismissal ;
  • A dismissal resulting from a legal action regarding gender equality in the workplace or from reporting crimes and offenses ;
  • UDismissal of a protected employee (e.g. union representative, local representative, etc.) because of the exercise of his/her mandate ;

The scale is now being contested by many employees and has been declared non-compliant with international law by several industrial tribunals conseils de prud’hommes / industrial tribunal. 

For more information on the conformity of the scale with international law  and on the dismissal procedure simplified by the Macron ordinances.