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. (A propos de l'arrêt de la Chambre sociale de la Cour de cassation du 27 mai 2020, n° 18-19.605) With the aim of strengthening team cohesion and optimising operating costs, a company decided to reorganise its commercial activity by business sector rather than by geographical sector. It therefore proposed to a modification of her employment contractThese are his function and his remuneration. The latter refused. The employer then dismissed the employee for personal reasons, which she contested on the grounds that the reason for terminating her employment contract was not personal. The company indicated in the letter of dismissal that it was not experiencing any cash flow difficulties and that it was simply a question of maintaining its competitiveness. The reason for the dismissal, inherent in the employee herself, was therefore invalid. The Court of Cassation also stated that the dismissal, which could not be considered on personal grounds, could not also be considered as part of an economic redundancy procedure. In fact, the employer did not justify economic difficulties or a desire to safeguard the Company's competitiveness. The Court of Cassation therefore ruled that the dismissal was without real or serious cause: "In so ruling, even though it was clear from its findings that the reason for the change in the employment contract refused by the employee was the employer's desire to reorganise the company's commercial activity, and that it was not alleged that this reorganisation was the result of economic difficulties or technological change or that it was essential to safeguard 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 Labour Code, as it read prior to Law 2016-1088 of 8 August 2016."