Collective redundancy for economic reasons and consultation of the social and economic committee : reclassified employees are excluded from the number of employees to be taken into account. 

Cass. Soc., april 5, 2023 n°21-10.391

In a ruling rendered on April 5, the French Supreme Court clarified how to assess the collective nature of redundancies for economic reasons, triggering the obligation to implement a consultation procedure with employee representatives.

For the record, under article L. 1233-8 of the French Labor Code, any employer planning to lay off at least two employees for economic reasons within a thirty-day period must convene and consult the social and economic committee.

In this case, the employer, who had initially planned to lay off three employees for economic reasons – whose jobs were to be eliminated – finally initiated the redundancy procedure for just one of them: two of the employees concerned accepted to be redeployed to new positions, involving a modification of their employment contract.

As only one employee was affected by the dismissal, the employer considered that it was not necessary to consult employees’ representatives.

On the contrary, the Court of Appeal ruled that the employer should have consulted the staff representatives, given the collective nature of the redundancy initially planned, regardless of the fact that two of the employees concerned had accepted the redeployment proposal.  

The Court of Cassation disagreed: since two of the employees had accepted to be redeployed proposal, and the dismissal had only been envisaged for one, no consultation procedure with the CSE was required. Dismissals for economic reasons in such circumstances are individual in nature.

The apparent pragmatism of this decision calls for caution.

Of course, proposing a modification to an essential element of an employee’s employment contract for economic reasons does not necessarily imply compliance with the procedure for dismissal for economic reasons. In this sense, the Cour de cassation’s decision is consistent with the spirit of article L. 1233-25 of the French Labor Code, under which the collective redundancy scheme for economic reasons only applies when at least ten employees have refused the modification of an essential element of their employment contract.

However, this position may come as a surprise, given that :

– Article L. 1233-8 of the French Labor Code specifies that the collective nature of the redundancy is identified when the employer “is considering” a redundancy for economic reasons of at least two employees over a period of thirty days.

– and that the CSE must – as part of its general power under article L. 2312-8 of the Labor Code – be informed and consulted on issues concerning the organization, management and general running of the company, and in particular on measures likely to affect the size or structure of the workforce, and on changes to the economic or legal organization.

The contradiction between the legal texts thus seems to have been resolved by the Court in favor of a restrictive interpretation: in its view, redundancy for economic reasons was not “considered” at the stage of the redeployment proposals, but only when these were refused.