Is the “rupture conventionnelle” offered as an alternative to dismissal valid?

In a ruling handed down on November 15, 2023, the French Supreme Court (Cour de cassation) accepted that an employer may propose a conventional severance agreement as an alternative to dismissal (Cass. soc. 15-11-2023, n° 22-16.957). Although the High Court has already ruled on the relationship between these two autonomous methods of termination, this crystal-clear clarification in a case that is frequently encountered in practice is most welcome.

 

In this case, a construction worker repeatedly worked without a safety harness or helmet. As this incident was repetitive, the employer considered dismissing him for gross misconduct. However, given the length of the employment relationship (7 years), the employer gave the employee the choice between dismissal for gross misconduct and a conventional severance agreement.

The employee then chose to sign a contractual severance agreement, but then sought to have the agreement annulled, arguing that his consent had been vitiated, as the agreement had been signed, in his view, under the threat of dismissal for gross misconduct.

As a reminder, the French Supreme Court has established the principle that the existence of a dispute between the parties to the employment contract at the time of its conclusion does not in itself affect the validity of the termination agreement.

The Cour de cassation also accepts that the interview prior to dismissal can take the place of a preparatory interview for a contractual termination. (Cass. soc. 19-11-2014 n°13-21.979).

Nonetheless, it remains true that consent to the termination must be freely given. Failing this, the agreement is null and void, and the termination may be requalified as a dismissal without real and serious cause.

This is the case when the employer threatens or uses violence against the employee to get him to accept the “rupture conventionnelle” (Cass. soc. 23-5-2013 n° 12-13.865).

In its November 15, 2023 ruling, the French Supreme Court (Cour de cassation) therefore reiterates that an employer considering dismissing an employee may offer to sign a “rupture conventionnelle” as an alternative to dismissal, provided that the employee’s consent has not been vitiated.

In this case, the employee had not exercised his right of withdrawal within the 15-day time limit (C. trav. art. L 1237-13, para. 3) and had not established that the contractual termination had been imposed by the employer. As a result, the employee, who failed to provide proof of a defect in consent, lost his claim for annulment of the contractual termination.

This ruling legitimizes and endorses a common practice whereby the employer proposes a contractual termination in the context of employee misconduct, as an alternative to a generally disciplinary dismissal, in order to take account of the employee’s seniority or lack of disciplinary record.

The mere fact that the employer proposes that the employee sign such a contract does not in itself constitute a form of pressure.

It remains to be seen whether the change in the tax and social security treatment of severance pay since January 1st last September, which notably excluded the 20% lump-sum social security contribution in favor of a 30% employer’s contribution to the Caisse nationale d’assurance vieillesse, may or may not undermine the attractiveness of this type of termination.

Lastly, the Social Division of the Cour de cassation had already ruled that, in the absence of a defect in consent, the existence of acts of moral harassment does not in itself affect the validity of the termination agreement (Cass. soc. 23-1-2019 n° 17-21.550).

In practice, the “rupture conventionnelle” is often an alternative to dismissal, even if legally it is an independent method of terminating an employment contract.

To this end, it is worth recalling the links between dismissal and contractual termination, which are accepted by case law when the contractual termination has been validly retracted within 15 days:

An employee may still be dismissed if he or she has waived the termination agreement by exercising his or her right of withdrawal. On the other hand, an employer who initiates dismissal proceedings for misconduct must, in this case, act within the two-month limitation period, as the signing of a contractual termination agreement does not interrupt the limitation period.

The French Supreme Court has also ruled that the signing of a contractual termination agreement, after the initiation of disciplinary dismissal proceedings, does not entail the employer’s waiver of its disciplinary powers. If the agreement is withdrawn, the employer can resume the dismissal procedure.

Finally, the French Supreme Court (Cour de cassation) has accepted the possibility for parties to renounce a dismissal already notified by signing a “rupture conventionnelle”.

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