Since the entry into force of French President Emmanuel Macron’s labor reforms on September 24, 2017, the amount of damages for unfair dismissal has been subject to both a floor and a cap, depending mainly on the employee’s length of service. However, the scale used in determining damages does not apply to dismissals held null and void in, for example, the case of discrimination or sexual or workplace harassment.
The goal of the so-called “Macron scale” under the labor reforms was to improve the predictability of the damages that an employer may have to pay in case of unfair dismissal. Needless to say, the measures were also adopted with a view to attracting foreign investors, who are – let’s be honest – often scared off by the complexity of French employment law.
The implementation of the Macron scale was, however, highly criticized by members of France’s left-wing political parties and trade unions, as well as the lawyers of employees, who have initiated various actions to freeze its implementation.
The first two legal battles were won by supporters of the reforms. On December 7, 2017, the French Supreme Administrative Court ruled that the scale was in compliance with French law and international conventions, in particular article 10 of the Termination of Employment Convention (No. 158) of the International Labour Organization (ILO) and article 24 of the European Social Charter, which provide for an adequate indemnity and appropriate compensation in case of unfair dismissal. Furthermore, on March 21, 2018, the French Constitutional Council declared the Macron scale compliant with the French constitution.
But was that the end of the road for its opponents? Not at all. The battle has resumed, this time before French industrial tribunals (Conseils de Prud’hommes).
The tribunal judges have the distinction of being nonprofessional. Half are elected by employers and the other half by employees. The idea behind this is to promote as much as possible the settlement of disputes between employers and employees, and if settlement proves elusive, to have judges who are aware of the reality of employment relationships.
Certain French industrial tribunals have recently been in the spotlight for having set aside the Macron scale. The rationale used has not always been the same, but in essence it is that the Macron scale is in breach of article 10 of the Termination of Employment Convention of the ILO and article 24 of the European Social Charter. The tribunals have ruled that these international conventions provide for full reparation of the loss suffered by the employee and as such do not allow the implementation of any scale for damages.
In our opinion – one shared by many other commentators – this interpretation of the two international conventions is flawed. However, not all French industrial tribunals share this view.
The French government has tried to avoid spreading revolt among judges against the background of the “Yellow Vests” protests. The French Ministry of Justice recently began circulating instructions to ensure French public prosecutors are in attendance at court of appeal hearings to help secure the government’s position.
The first decisions reached by the courts of appeal should be known this summer, while the position of the French Supreme Civil Court will have to wait until 2020. Let’s hope that the courts of appeal only take into consideration the legal aspects of the labor reforms, to save the Macron scale.
Over the summer, expect both supporters and opponents of the Macron scale to continue to count their victories.
To be continued.
Client Alert 2019-093
