JILPT Research Report No.173
Present Situation of the Legal System Governing Dismissal in France

May 29, 2015

Summary

Research Objective

In Japan, a legal principle nullifying unfair dismissal has traditionally been established under the so-called “doctrine of dismissal rights’ abuse” (currently: Labour Contract Act §16). Meanwhile, in practical application of the labor tribunal system since 2006, as well as conciliation and other systems for dispute resolution based on the Act on Promoting the Resolution of Individual Labour-Related Disputes enacted in 2001, it has become clear that many (dismissal-related) disputes are processed through some form of monetary compensation by employers to dismissed workers. In recent years, moreover, judgments recognizing workers’ claims for damages against unfair dismissal have also started to appear in civil litigation in the courts. In light of these circumstances, the possibility of redressing dismissal disputes with monetary payment has also been discussed at some length in labor law studies.

When examining this kind of issue, it is generally thought useful to survey and analyze situations in other countries, as a basic reference material to expedite the discussion. As discussed below, the French legal system adopts a different approach from that in Japan, in that abusive dismissal (unfair dismissal) is in principle redressed by paying compensation for wrongful termination (indemnité de rupture abusive) or some other form of compensation. In addition, there are cases where the dismissal may be ruled invalid and workplace reinstatement permitted under certain conditions. Thus, analyzing the approach of the French legal system based on redress for unfair dismissal in the form of monetary payment, and the situation in actual practice, should be of significance as basic Research in terms of comparative law.

The purpose of this report, therefore, will be to give a comprehensive description of the system concerning dismissal and other termination of labor contracts in France, and to clarify its practical application, as well as clarifying certain aspects of legal policy trends on this issue in recent years.

Research Method

Basic survey using literature obtainable in Japan, together with an interview survey and gathering of literature in France

Major Findings

  1. The first characteristic of dismissal legislation in France is a clear distinction between prohibited dismissal (licenciement prohibé) and unfair dismissal (abusive dismissal: licenciement abusif). Specifically, the law prohibits dismissal of workers who should be protected (“protected workers”) and dismissal that violates the individual’s freedom or the basic workers’ rights, and as distinct from redress for unfair dismissal through the payment of compensation, the system also provides the option of workplace reinstatement. In many cases actually, resolution through monetary compensation appears to be chosen for this kind of prohibited dismissals as well. In that sense, resolution of disputes regarding termination of labor contracts (dismissal) in France does not necessarily conform to the formal convention of the law, which divides them into two types (prohibited dismissal and unfair dismissal) and distinguishes between the respective methods of redress. Instead, the majority of cases seem to be resolved by monetary payments, mainly involving compensation.

  2. The second characteristic of dismissal legislation in France is that general rules on dismissal procedures have been enshrined in law. The purpose in doing so is assumed to be, firstly, to set a deliberation period and make employers think whether dismissal is really necessary (in other words, to deter dismissal), and secondly, to provide a process to pave the way for possible future litigation over such dismissal. In reality, of course, only the latter aspect of this purpose is functioning, while the first aspect, i.e. the function of preventing disputes by means of a “deliberation period”, seems not to be functioning adequately in practice. In France, the reality seems to be that statutory dismissal procedures in companies are, essentially, procedures whereby a worker targeted for dismissal judges whether or not to contest the dismissal in a labor court, etc., or prepares for the same, and on the other hand, a process for confirming and organizing factual relationships and arguments in order to smooth procedures in a labor court. Of course, it is not that these statutory dismissal procedures fulfil no function at all, from the viewpoint of preventing disputes; we may also point out that, by having such a system in place, it has the indirect function of at least preventing opportunistic dismissal.

  3. The third characteristic of dismissal legislation in France is that sanctions (effects) against unfair dismissal (i.e. dismissal that lacks realistic or serious grounds) are not deemed to invalidate the dismissal but are taken as the basis for monetary payments, such as compensation for wrongful termination.

    Although the law stipulates an amount equivalent to six months’ wages as the bottom line in principle, in actual practice, various increments are added to increase the resolution amount to the equivalent of 12-18 months. As factors justifying these increments, the time required until re-employment is considered as the basis (mainly involving the age and years of service of the worker in question), while circumstances leading to dismissal, particularly the fault of the employer in the process are also taken into account.

    The fact that monetary payment is specified as the legal method of redress may conversely cause disputes to become protracted. That is, labor disputes in France (not only those concerning dismissal) are basically supposed to be resolved in a labor court, but the rate of settlement in mandatory prior arbitration procedures is extremely low at around 10%. Even when a case progresses to the judgment stage and is subject to a court ruling, the dispute as a whole tends to be prolonged by appeals against the judgment. Often, indeed, cases are then taken further to the “Court of Cassation” (the equivalent of the Supreme Court).

  4. Dismissal for economic reasons in French law is characterized in that, while subject to the same substantive conditions as for personnel-related dismissal, procedural requirements and, in particular, detailed procedures are added for collective economic dismissal. Actually, cases related to economic dismissal in labor courts are very few in number, representing only 1.4% of all cases. Although the reason for this is not necessarily clear, one could point to the possibility that post-dismissal disputes are suppressed by the detailed stipulation of collective procedures and the close adherence to the process of labor-management negotiation.

  5. As a precondition for termination of labor contracts by mutual consent as made law in 2008, it should first be pointed out that the extremely practical requirement of eligibility to receive unemployment benefit exists as an important background factor. With this point in mind, as a whole, the system of statutory termination of contract by consent has been appraised as successful. On the other hand, there still remain problems in terms of ensuring the equality of labor and management, particularly with regard to achieving termination by consent when initiated by the employer.

Policy Contribution

The published results are due to be used in various government meetings as data of the Ministry of Health, Labour and Welfare.

Contents (only available in Japanese)

Research Category

Themed Research “Status Survey on Employment Termination in Japan”

Research Period

FY2014

Author

Ryo HOSOKAWA
Researcher, the Japan Institute for Labour Policy and Training
Shuhei KOGA
Research Assistant, the Japan Institute for Labour Policy and Training (Ph.D. Student at Graduate School of Law, Waseda University)

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