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 request for party accessories. It would seem that this is not his first act of insubordination, since, in a moody mood, he sometimes refuses to answer customers without reason. Mr Grognon was therefore dismissed for serious misconduct. His employer did not wish to be the subject of a possible legal action and preferred to settle.

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 if a settlement agreement is reached, the employer waives the right to classify the employee's conduct as an offence. serious misconduct and agrees to pay a settlement indemnity. ➢ The drafting of the Settlement Protocol must highlight the existence of reciprocal concessions on the part of the employee and the employer, otherwise the settlement will be null and void. ➢ The concessions will relate to the employee's waiver of compensation in lieu of notice, on the one hand, and the employer's waiver of serious misconduct, on the other. FOCUS ON THE DRAFTING OF THE TRANSACTIONAL PROTOCOL TO AVOID ANY RISK OF URSSAF ADJUSTMENT:

First, let's remember that : Article L. 242-1 of the French 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, in order to be exempt from the payment of social security contributions, the settlement agreement must include a clause stating clearly, precisely and unambiguously that the employee "expressly waives any claim for payment of any indemnity and/or sum of any kind resulting from the conclusion, performance and/or termination of his contract". This clause stems from the case law of 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:

"But whereas it results from the statements of the judges of the court of first instance that the parties to the employment contract, making use of the option they had to set the date of expiry of the said contract at their convenience, decided by mutual agreement in the transaction of 15 November 1983, without infringing a rule of public policy, to shorten the duration of the notice period that the employee owed to his employer and to set the end of this period at 16 November 1983; Having noted the existence of a reciprocal waiver of the notice period without indemnity, they deduced exactly that the employee had lost the right to indemnity in lieu of notice, which could not therefore have been included in the amount of the settlement indemnity.

The company ELLE EST BELLE LA VIE may therefore resort to a transactional protocol to settle the terms of its dispute with Mr GROGNON, but must ensure that the contractual clauses are precise.

Cécile ZAKINE assists company directors in drafting settlement agreements in labour law. A good transaction is always more interesting than a bad decision!