FAQ

Is it possible to compromise in the case of serious misconduct?

Mr. Grognon, an employee of the company ELLE EST BELLE LA VIE, refused to answer a customer's order for party supplies. It appears this is not his first act of insubordination, as he is prone to mood swings and sometimes refuses to respond to customers without explanation. Mr. Grognon was therefore dismissed for serious misconduct. His employer, wishing to avoid potential legal action, opted for a settlement.

Did he have the opportunity?

➢ The employer may reach a settlement even in the event of serious misconduct committed by its employee. ➢ It should be noted that in the event of a settlement agreement, the employer waives the right to classify the serious misconduct and agrees to pay a settlement. ➢ The settlement agreement must clearly demonstrate the existence of reciprocal concessions from both the employee and the employer, otherwise the settlement will be void. ➢ These concessions will include the employee waiving their right to compensation in lieu of notice, and the employer waiving any claim of gross misconduct. FOCUS ON THE DRAFTING OF THE TRANSACTIONAL PROTOCOL TO AVOID ANY RISK OF URSSAF ADJUSTMENT:

First, let us recall that: Article L. 242-1 of the Security Code The French social security system provides that sums paid to an employee on termination of an employment contract are included in the basis of assessment for social security contributions.The employer must prove that all or part of the amount is used to compensate a loss.

✓ In its ruling of 15 March 2018, the French Supreme Court (Cour de cassation) clarifies that the settlement indemnity paid following termination of a contract for gross misconduct may be exempt from social security contributions provided that the employer proves that the disputed settlement indemnity has an exclusively compensatory basis(reparation of a damage suffered) as it does not necessarily include compensation in lieu of notice.

Under these conditions, to be exempt from social security contributions, the settlement agreement must include a clause clearly, precisely, and unambiguously stating that the employee "expressly waives any claim for payment of any compensation and/or sum of any kind resulting from the conclusion, performance, and/or termination of their contract." This clause is based on case law from the Court of Cassation.(Cass. soc., 2 Nov. 1989, no. 87-11.117) which clarified the management of a Settlement Protocol in cases of serious misconduct: