Group dismissal procedure.
The Employment Protection Plan (PSE)
In this article, we present a dismissal procedure of more than 10 people within 30 days in a company in France with more than 50 employees. Actually there is another procedure to respect for companies in France with less than 50 employees.
An employer who is considering this kind of dismissal procedure for economic reasons must establish and implement an Employment Protection Plan (PSE). This Plan as well as the procedure (see below) is mandatory in companies with at least 50 employees, when the proposed dismissal concerns at least 10 employees over a period of 30 days. Its purpose is to avoid dismissals or at least to limit the number of dismissals, as provided for in Article L 1233-61 of the French Labor Code.
The PSE includes a reclassification plan to facilitate the reclassification of employees whose dismissal could not be avoided, particularly that of older employees or with social or qualification characteristics making their professional reintegration particularly difficult. Article L 1233-62 of the French Labor Code details the measures provided for by the PSE, such as: internal or external reclassification actions, new business creations by the company, etc.
All modes of dismissal, including early retirement and conventional unique settlements in the process is taken into account.
A.) Number of dismissals
Only employees belonging to the company established in France are to be taken into account (Cass, soc., 23-9-2008 n ° 07-42.862 F-P: RJS 12/08 n ° 1181). For enterprises with several separate establishments in France, the assessment framework to be adopted is on the establishment if the dismissals concern it and do not exceed the power of the head of establishment, and the entire group in France if they concern simultaneously several establishments or structures different from this one (Circ DGEFP / DRT / DSS 1 of 5-5-2002, Cass.Soci 7-5-2003 n ° 08-45.113 FD: RJS 7/03 n ° 862).
An establishment is any production unit with separate equipment and specialized staff, the operation of which is not influenced by that of the other units of the company and provided with a management ensuring the good performance of the work and supervision of the entire operation of the installations, as well as the resolution of technical issues.
In order to prevent employers from repeatedly making small dismissals to avoid the heavy dismissal procedure (with the PSE), where a company of at least 50 employees has made more than 10 dismissals for 3 consecutive months without reaching 10 employees in the same period of 30 days, any new dismissal envisaged over the next 3 months is subject to the provisions governing the dismissal of at least 10 employees over 30 days.
B.) Information of the Work Council
They take place at least during two meetings and must be spaced at least 15 days apart. The employer is also obliged to send to the DIRECCTE (governmental working control office) in a dematerialized way via the PSE portal all the information’s concerning the proposed dismissal. The Work Council issues two opinions, one on the project and its implementing rules, within the meaning of Article L. 2323-15 of the French Labor Code, and the other on the proposed collective redundancy. The Working Council may choose to be assisted by an external accountant. In this case, the employer informs the DIRECCTE while transmitting the report of this specialist on the project and any changes made.
C.) Information of the DIRECCTE (governmental working control office)
The DIRECCTE must be informed by the employer of all matters relating to the proposed dismissal procedure (information on collective redundancies, accompanying measures such as the PSE, etc.), at the same time as the dispatch of notices to meetings of employee representatives. It also receives the minutes of the meetings and the opinions of the Working Council.
The employer is obliged to inform the DIRECCTE about the negotiations concerning a possible majority collective agreement, the unilateral document of the redundancy program and the assistance of the Working council by an external accountant. The DIRECCTE ensures that the manager respects his social obligations and the procedures for consulting the staff representatives.
In addition, it deals with the validation of a possible majority collective agreement on the redundancy program (15 days after receipt) or the homologation of the unilateral document of the employer (21 days after receipt).
D.) Dismissal interview
There is no need to convene employees affected by the proposed collective redundancy of more than 10 employees when the company employs more than 50 employees and has a working council. Note that this is not valid in the case where several protected employees are concerned. On the other hand, if there is no working council, the preliminary collective redundancy interviews apply under the same conditions as for the economic dismissal of less than 10 employees.
E.) Notification of dismissals
The conditions related to the letter of dismissal are the same regardless of the size of the company, except for the deadlines for sending. Dismissals must be notified to the employees concerned by registered letter with acknowledgment of receipt. The document must mention the economic reason, the possibility of benefiting from the CSP (professional security contract) or the reclassification leave or the impossibility of reclassification. It must also have the benefit of a possible hiring priority and the period during which the validity of the dismissal may be contested (12 months from the notification).
Unless more favorable provisions for employees defined by agreement or collective agreement, the letter of dismissal must be sent to employees at least within 30 days of notification of validation or homologation of the redundancy plan by DIRECCTE.
F.) Prior notice
The common notice period of dismissal applies (usually 3 months) except in the case of an exemption authorized by the employer or the acceptance by the employee of the CSP, the reclassification leave or the mobility leave.
G.) The Employment Protection Plan (PSE)
The PSE is a mandatory Social Plan for any employer who plans to lay off for economic reasons at least 10 employees over the same period of 30 days in a company with 50 employees or more.
It should be noted that the PSE can be set up by a majority collective agreement validated by the DIRECCTE and respecting the conditions set by Articles L. 1233-24-1 to L. 1233-24-3 of the French Labor Code. Also, this must not derogate from the provisions of Article L. 1233-24-3 of the same Code. In the absence of agreement, it is the employer’s responsibility to unilaterally determine the content of the PSE, namely:
- The organization of internal reclassification efforts of employees on equivalent positions or the same categories as the previous ones (or lower category if the employee accepts it);
- Actions that promote external redeployment (support for the reactivation of the labor pool);
- Training, validation of experience acquired (VAE) or retraining actions, to facilitate reclassifications;
- The initiative to create new activities for the company;
- Support for the creation of new activities or the resumption of activities by employees;
- Measures to reduce, adjust working time and reduce the amount of overtime worked regularly;
- The conditions for implementing the reclassification leave or the professional security contract (CSP);
- The redeployment plan for employees with social or qualification characteristics, which considerably penalizes their reintegration into the labor market (older workers, disabled people).
In the absence of a collective agreement, the employer draws up a document listing all the measures of the PSE after the last consultation with the works council. He must then have it certified by the DIRECCTE and inform the employees of this approval. It should be noted that some of the arrangements provided for in the PSE can be defined by a collective agreement and others by the employer’s document.
The company can establish a PSE in two different ways:
– negotiate an agreement with the unions. The agreement must be signed by an absolute majority (50%) of the representative trade union organizations in the company. This agreement may make it possible to adapt the procedure, in compliance with the social public policy, and to determine the accompanying measures adapted to the employees concerned by the plan for safeguarding employment.
– prepare a unilateral document. The unilateral document is stopped by the employer at the end of the information / consultation procedure of the works council.
This article has been prepared for informational purposes only. It is not a substitute for legal advice addressed to particular circumstances. You should not take or refrain from taking any legal action based upon the information contained herein without first seeking professional, individualized counsel based upon your own circumstances. The hiring of a lawyer is an important decision that should not be based solely upon advertisements.
Information by ALARIS AVOCATS, English speaking lawyers in France (Paris) specialized in French labor law, especially any kinds of Social Plans, dismissal procedures and labor contract clauses.