Tuesday, February 23, 2016

El Khomri law and redundancy: Why so much concern? – The Express

The redefinition of redundancy is one of the great changes contained in the draft bill Myriam El Khomri. It offers indeed to rewrite the definition of redundancy and re-specify in the possible reasons for using them.

Since the publication of the text, lawyers have denounced a real “catastrophe” for employees. Reason: in the future law, Article 30a indicates that redundancies may follow the cessation of business activity, technological changes, or a “corporate reorganization necessary to safeguard competitiveness. ” But it also provides that the result of economic difficulties characterized:

  • or by a drop in orders or sales for several consecutive quarters compared with the same period of the previous year
  • or by operating losses for several months, or by a significant deterioration in cash,
  • or by all evidence to justify these challenges. “

Stephen Beal, lawyer at Fidal firm that claims to have been consulted by the Grenelle street services in the development of this law, it is incorrect to speak of total redefinition of redundancy. “rather, it is an evolution of the definition of redundancy and the addition of a few details,” he said.

a codification of the case

an opinion shared by Mai Le Prat. “This is mainly a codification of existing case law,” said the lawyer. This argument is also put forward by the government, which claims to have taken into account the recommendations of the Court of Cassation to draft the new text and set some new criteria certifying of business difficulties can demonstrate a redundancy.

So, stating for example that redundancy can be characterized more “a reorganization of the company necessary to safeguard competitiveness”, the text is based on the laws in force since years. “Several judgments of the Court of Cassation had already admitted these reasons, comments Stéphane Beal. The part of the labor code allows to set in stone and avoid turnovers jurisprudence on the matter.”

A change of geographical scope

But beyond integration into the labor code decisions already in force, the draft law also contains some changes in philosophy. “The text consolidates a new scope of appreciation advanced by the employer on economic grounds, advanced Mai Le Prat. The preferred geographic area will now be national and not international.” Until now, if a company was a subsidiary of a group located around the world, the judge considered the economic health of the entire company. Now, it will consider the territory only. Clearly, if a company wants to dismiss in its French subsidiary even though it is in a prosperous condition, she can.

Stéphane Nice, is the correction of a “no economic sense.” “France was the only country to impose a perimeter group and not limited to companies located in the country and it was absolutely uneconomic: an international group had to pay for the efforts of its French subsidiary did not want” says the specialist.

Conversely, Mai Le Prat, believes that this is a worrying sign. “To me, the message it sends is that text is now cheaper and easier to fire in France, that the financial risk it represents for companies will be reduced,” analyzes Mai Le Prat, who sees some political symbol. The measure is in any case a significant boost to the incorporated groups, including the largest.

A little leeway for judges

One of the main questions that bears on this text, it is the flexibility that will have judges face a text to sufficiently precise formulations to guide his judgment but also vague enough to leave a little leeway.

“We can actually do two readings of the bill and say the one hand that the judge will now be bound and even a tiny drop in orders will require it to recognize the redundancy as characterized and, conversely, one can also say that the assessment of the gravity of the economic difficulties will still be within its jurisdiction and that it will retain some decision space “analysis Mai Le Prat.

“The new text clarifies the jurisdiction but leaves freedom to assess the arguments put forward by the company, believes Stéphane Beal. Take the drop in orders or sales that are highlighted as criteria. the rates are obviously not fixed in the text, which would have made no sense. the judge will therefore assess alone. ”

“Companies do not terminate positions for fun”

The lawyer also believes that the phrase “by all evidence to justify these challenges” , is a free space for the judge, allowing him not to confine his judgment to the list of economic criteria as defined in the bill.

“I want to believe that the judge will not consider that the economic motive is filled just because there will have been a revenue decline of 0.1%,” continues Mai Le Prat.

As for a possible explosion in the number of redundancies, the two lawyers consider it highly unlikely. “Companies do not engage in such a process for fun, tempers Stéphane Beal. So I do not see an increase in the number of layoffs in the months following the entry into force of the law.”

A very long maturity

The discussions on the reform of the labor code are only at the beginning and the final version could be very different from before this bill.

“Anyway, we will not be able to measure the consequences of these changes before the three years since the industrial tribunals are the first to appreciate the different reasons then it will be the courts of appeal who will decide and interpretations may vary depending on the room and finally, there will be appeals on points after which the Court will define the scope of this text, “concluded Mai Le Prat.

The Road to El Khomri law is still long …


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