Thursday, December 1, 2016

Redundancy : the law of Work is changing in concrete terms – Europe1

Adopted at the heart of the summer, the act Work scope by Myriam El Khomri has been strongly opposed by the trade union organisations in many aspects. But there is one that has particularly crystallised the debate : the reform of the economic dismissals. Since 1 December, a company has many more legal tools to fire without fear of being pursued before the prud’hommes. The proof with three examples.

That says exactly the law in respect of economic dismissals ?

The article 67 of the law Work adds new reasons deemed legitimate to proceed with a dismissal on economic grounds :
- changing technology.
- the reorganization of the company necessary to safeguard its competitiveness.
- The cessation of activity of the company.
- economic difficulties. These are “characterised by the significant development of at least one economic indicator, such as a drop in orders or sales, operating losses or a deterioration of the cash flow or gross operating surplus, or by any other element of nature to justify these difficulties.” The decrease of this indicator has to last a certain time, which depends on the size of the company : a quarter for a business with fewer than eleven employees, two consecutive quarters for a company of at least eleven employees, and less than fifty employees, three consecutive quarters for a company of at least fifty employees and less than three hundred employees, four co nsecutive quarters for a company of three hundred employees and more. For companies that are part of a large group, the calculation of the decrease in turnover, the order book, etc, must be at the level of the group.

Termination due to a change in technology. If the technological breakthroughs allow companies to grow and to invite them to the table of the great, they are also the cause of the fall of companies that were not able to adapt. The law El Khomri is, therefore, a change in technology a legitimate reason for an economic dismissal. Take the example of a company that employs surveyors, experts, key players in the construction sector or the mining operation. The arrival of the drones civilians totally change the in this business since such a device, associated with the calculation power of computers allows the user to perform the same work but with fewer people and in a shorter time. Even if she is doing well, the company can then invoke a change in technology : his profession is experiencing a mini-revolution, it adapts, or it is doomed to disappear. It may, therefore, proceed with economic dismissals for a reason now provided by law and that the courts can hardly question it. Th e laid-off employees will have less margins of maneuver to challenge the termination.

Termination due to a decline in revenue. A decrease in backlog or revenue – for a period that depends on the size of the company – is now a valid reason to proceed with a dismissal on economic grounds. If this reform now allows companies to license it before it is too late and that its very existence is threatened, it will also facilitate the layoffs that would previously have been regarded as questionable. Master Judith Krivine, a founding partner of the law firm Dellien Associated, is to take “the example of a company of new technologies”. “This company is launching pre-Christmas a new phone, or something else, the product proved a massive hit so well that it achieves a very good turnover. The following year, the same company does not necessarily intend to highlight a new product at Christmas time and would rather wait a few months before the launch : the turnover at the end of the year will be lower than the previous year. This does not mean that th e company is going less well but with the new agreement, the company has a pattern, which will automatically be considered as valid”, explains she. And Me Judith Krivine of regret : “businesses will be able to play when they released their new products to make more sales, at such or such moment.”

Termination to preserve the competitiveness. The law El Khomri further provides that a company threatened by competition can be fired if it allows him to gain in competitiveness and therefore to better cope with its rivals. This could for example be the case of a company which produces dried mushrooms, a very niche reduced where the actors are few in number and know each other. But this market equilibrium is upset by the arrival of a new company from a developing country which offers similar products but at rates much lower. The French SME has to react : either by range or lowering its rates. In this second case, it can decide, for example, of an overhaul of its production process to produce the same volumes but with fewer employees, or even buy robots to automate certain tasks. Citing “reorganization of the company necessary to safeguard its competitiveness”, the company can dismiss without fear of a guerrilla legal in front of the prud’hommes.


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