News

8 June 2020

Employers: be careful about the reason for dismissal!

If an employee refuses to accept a change in his employment contract proposed by his employer for a reason not related to his person, the dismissal constitutes a dismissal for economic reasons. (Regarding the judgment of the Social Chamber of the Court of Cassation of May 27, 2020, No. 18-19.605) In order to strengthen team cohesion and optimize operating procedures, a company decides to reorganize its commercial activity by business sector rather than by geographical sector. It therefore proposes to a modification of her employment contractnamely her position and salary. She refused. The employer then dismissed the employee for personal reasons, which she contested, arguing that the reason for termination of her employment contract was not related to her person. The company stated in the dismissal letter that it was not experiencing any cash flow difficulties and that the dismissal was simply a matter of maintaining its competitiveness. The reason for dismissal, related to the employee herself, was therefore invalid. The Court of Cassation also indicated that the dismissal, which could not be considered for personal reasons, could not be considered within the framework of a redundancy procedure. Indeed, the employer failed to demonstrate any economic difficulties or a desire to safeguard the company's competitiveness. The Court of Cassation therefore characterized the dismissal as a dismissal without real and serious cause: "In so ruling, when it was clear from its findings that the reason for the modification of the employment contract refused by the employee lay in the employer's desire to reorganize the company's commercial activity and that it was not alleged that this reorganization resulted from economic difficulties or technological changes or that it was essential to safeguarding the company's competitiveness, so that the dismissal was without real and serious cause, the Court of Appeal violated Article L. 1233-3 of the Labor Code, in its wording prior to Law No. 2016-1088 of August 8, 2016."