Economic redundancy: consultation of elected representatives is essential

In a decision rendered on October 17, 2018 (n° 17-14.392), the Court of Cassation affirms that in the context of an economic dismissal, the absence of staff representation necessarily causes prejudice to the employee dismissed for economic reasons.

The Court of Appeal had wrongly limited itself to considering that the employee had not demonstrated the existence of any prejudice. The question could legitimately be raised insofar as the article L.1235-15 of the French Labor Code

provides only that «any procedure for dismissal for economic reasons in a company where the social and economic committee has not been set up, even though the company is subject to this obligation and no report of the lack of representation has been drawn up, is irregular. The employee is entitled to an indemnity payable by the employer which may not be less than one month’s gross salary, without prejudice to the redundancy and notice payments ». The Court of Cassation has censured the Court of Appeal considering that there is necessarily a prejudice linked to the irregularity of an economic dismissal due to the absence of staff representation. The extent of the prejudice may be debated but the principle of the existence of a prejudice is clearly recognized according to the Court of Cassation.

This decision moderates the decision of the Court of Cassation of April 13, 2016 (n° 14-28.293) in which it refuted the notion of automatic prejudice : « the existence of a prejudice and the evaluation of the latter fall within the sovereign power of appreciation of the judges of the court of first instance; that the industrial tribunal, which noted that the employee did not bring any element to justify the alleged prejudice, has, by these reasons alone, legally justified its decision ».

In the judgment of October 17, 2018, the Court of Cassation affirms that the culpable absence of employee representatives (due to the employer’s failure to organize elections) necessarily causes prejudice to the employee deprived of the possibility of representation and defense of his interests. The Court of Cassation bases itself on the fact that the representation of employees is guaranteed both constitutionally and by European law.

In practice, I would like to remind you that prior to any economic dismissal, the consultation of the CSE is mandatory. As such, you are obliged to organize elections in order to set up a CSE as soon as the threshold of 11 employees during 12 consecutive months is reached (art. L. 2311-2 of the Frecnh Labor Code.) . If there are no elected representatives, a report of deficiency must be established (art. L. 2314-9 of the French Labor Code). The failure to organize the elections is therefore wrongful. The economic dismissal will then be irregular and the employee will be entitled to an indemnity that cannot be less than one month’s salary (art. L. 1235-15 of the French Labor Code)

In addition to the economic dismissal, the non-consultation of the CSE also has consequences in the dismissal procedure for unfitness. Indeed, an employee declared unfit by the occupational physician must receive proposals for redeployment at the initiative of the employer. These proposals must first be submitted to the CSE (art. L. 1226-2 and L. 1226-10 of the French Labor Code).  Otherwise, the employee’s dismissal will be requalified as a dismissal without real and serious cause.