Successive fixed-term contracts: When each new fixed-term contract allows the employee to […]

Cass. soc. March 15, 2023, n°21-17.227

The employer cannot invoke a fault committed during a previous fixed-term contract in the case of successive fixed-term contracts …. each new contract allows the employee to wipe out the past!

– Possible early termination of a fixed-term contract in the event of serious misconduct by the employee

First of all, it is important to remember that a fixed-term contract (CDD) can only be terminated before the end of its term in the following cases:

• serious fault of the employee or the employer ;
• force majeure ;
• inaptitude established by the occupational physician
• the employee and the employer agree amicably;
• the employee can prove that he/she has been hired on a permanent contract.

As serious misconduct is that which makes it impossible for the employee to remain in the company, the disciplinary procedure must be initiated within a limited period of time after the employer has become aware of the alleged facts.

What happens if in the meantime the employer contracts a new fixed-term contract with the employee?

– The alleged acts must have been committed during the same contract

In a decision of March 15, 2023 (Cass. soc. March 15, 2023, n°21-17.227), the Court of Cassation rules that if an employee on a fixed-term contract has committed a serious fault, it is too late:

• to pronounce the early termination of the expired fixed-term contract,
• to pronounce the early termination of the new fixed-term contract, since the facts concerned the previous fixed-term contract.

The alleged acts must have been committed during the current fixed-term contract and not during a previous contract.

What happens if the employer was not immediately informed of the facts or if a verification was necessary even though he had meanwhile contracted a new fixed-term contract?

– Late knowledge does not allow deferring the sanction

In the case examined by the Court of Cassation, a senior administrative assistant had been hired by a pharmaceutical laboratory; she had been on three fixed-term contracts.

The employer terminated the 3^rd fixed-term contract because of a fault (the nature of which is not specified in the judgment) in the context of the 2^nd fixed-term contract.

The employee argued that since the alleged facts had not been committed in the context of the last contract, they could not justify an early termination.

In its defense, the employer indicated that it had had to conduct an investigation so that it was only during the 3^rd fixed-term contract that it had been able to have exact knowledge of the reality, the nature and the extent of the alleged facts and thus take the decision to sanction the employee.

Both the Court of Appeal and the Court of Cassation rejected this argument.

There are no exceptions to this principle: “the fault that justifies the early termination of a fixed-term contract must have been committed during the performance of that contract”.

Such a decision is severe for employers insofar as each new fixed-term contract purges, de facto, all previous acts committed by an employee.

If it seems natural that an employer who, although informed of a fault committed by the employee, chooses to conclude a new fixed-term contract with this same employee, this not allowing him to invoke a previous fault, such a decision is however severe in situations where he had no knowledge of the wrongful acts previously committed.

An employer who discovers serious facts too late is therefore obliged to be patient and wait for the expiry of the new fixed-term contract (unless he can invoke another cause for termination mentioned at the beginning of the article)…

Clearly, in practice, in the following situation:

• D – last day of the fixed-term contract, an employee commits acts whose materiality and seriousness cannot be disputed,
• D+1 the employer contracts a new fixed-term contract with the same employee,
• D+2 the employer learns (with horror) that the employee has committed the facts mentioned two days earlier…

He cannot invoke these facts to break the new contract (and for the old one, he missed the boat since it has already expired).

The employer who breaks the new fixed-term contract – thinking he is doing the right thing and proving that the facts are true and serious and that he has just learned of them – should pay the employee damages for wrongful termination and a specific compensation for precariousness.

Such a decision could encourage employers who have doubts about facts committed by an employee, and who do not have the material time to carry out verifications, not to renew him on a new fixed-term contract…

In the case of successive fixed-term contracts, there is therefore a real autonomy of contracts. Going further, it is even inadvisable to invoke facts of the same nature committed during a previous fixed-term contract in support of new acts committed during the new fixed-term contract.