Executive Summary In France, after the signature of the agreed termination form between the employer and the employee, the parties have 15 calendar days to withdraw their consent. At the expiry of this cooling-off period, the employer or the employee has to ask the Labor authorities approve the agreed termination. In a recent decision, the French Supreme Court had to take a position on the following questions:

• Can the breach of the cooling-off period make the agreed termination null and void?
• Is the Industrial Tribunal empowered to approve in lieu of the Labor authorities the agreed termination?

In a decision of 14 January 2016, the French Supreme Court answered two unresolved issues regarding the regime of agreed termination.

Firstly, the Supreme Court had to confirm whether or not the French Industrial Tribunal is empowered to approve, in lieu of the labour authorities, the agreed termination, should it consider that the decision of the labour authorities to reject the agreed termination is unjustified.

According to the French Employment Code, only the judicial judge is empowered to settle disputes concerning agreed terminations.

In the case at hand, the employer requested the Court of Appeal not only to overturn the decision of the labour authorities rejecting the agreed termination, but also to approve the agreed termination.

Bringing to an end the disagreements between some lower French courts, the French Supreme Court took the view that the judicial judge itself is not empowered to approve an agreed termination. The French Industrial Tribunal is therefore only empowered to overturn the decision to approve or refuse the agreed termination taken by the French labour authorities.

Although this decision is in line with the French labour authorities’ position, as well as with the separation of powers’ principle, it nevertheless outlines the drawbacks of a legal action designed to overturn a decision rejecting an agreed termination.

Indeed, considering the long procedural delays common with industrial tribunals, the employer or employee would have a greater interest in circulating a new approval request, rather than waiting for the outcome of the judicial action.

In addition, the Supreme Court had to take a position on whether or not the breach of the cooling-off period had the effect of making the agreed termination null and void.

In the present case, the labour authorities did not approve the agreed termination. They considered that the company had sent its request before the expiry of the cooling-off period starting from the signature of the agreed termination, and during which the parties can withdraw their consent.

Based on a literal interpretation of the French Employment Code, the French Supreme Court set aside the employer’s arguments. It confirmed the position of both the labour authorities and the Court of Appeal, taking the view that the agreed termination form cannot validly be sent before the expiry of the cooling-off period.

How Reed Smith can assist Reed Smith Paris Employment team has strong experience in handling labor issues. Séverine Martel, partner, is leading a 3-people team dedicated to both individual and collective working relationships matters. They remain available to share with you their experience and address your questions.

Client Alert 2016-057