Redundancy is a delicate procedure that can quickly lead to disputes if not handled properly. There is a risk that this type of dismissal will be requalified as unfair dismissal, which can be costly for the company. This article will guide you through the best practices to adopt to minimize this risk.
Understanding the economic reasons for dismissal
Redundancies must be based on real and serious economic reasons. It is important to understand what exactly is meant by the term “economic reason”. In general, it refers to economic difficulties, technological change, safeguarding competitiveness or cessation of activity.
To justify a sound economic dismissal, it is essential to document the reasons precisely. Indeed, without a concrete basis, the dismissal could easily be contested and potentially requalified as unfair dismissal following a decision by the industrial tribunal.
Economic difficulties
Economic difficulties can take many forms: a significant drop in sales, substantial financial losses, a reduction in orders, and so on. Make sure you have tangible, verifiable evidence to back up these claims.
Technological change
Technological advances can sometimes render certain skills obsolete. However, the company must demonstrate why these technological developments have a direct impact on certain positions, justifying the need for redundancy.
Strict adherence to the dismissal procedure
The redundancy procedure is highly regulated by employment law. A fault in this procedure can immediately turn your economic dismissal into an unfair dismissal. Here are a few crucial steps to follow:
- Informing employee representatives
- Calling the employee to a preliminary interview
- Notify the dismissal within the legal deadlines
- Propose a job protection plan if necessary
Prior interview
Thepreliminary interview is an essential stage at which the employer must explain to the employee the reasons envisaged for his dismissal. The employee also has the opportunity to present his or her observations. Be sure to document this meeting thoroughly, to avoid any ambiguity in the event of a subsequent dispute.
Notification of dismissal
Notice of dismissal must be given by registered letter with acknowledgement of receipt. This letter must clearly state the economic reasons justifying the termination of the employment contract. Failure to do so may result in the dismissal being deemed to be without real or serious cause.
Setting up a job protection plan
In companies with more than fifty employees, when at least ten redundancies are envisaged over a thirty-day period, it is compulsory to draw up a job protection plan (PSE). The aim of this plan is to limit the number of redundancies and promote the redeployment of the employees concerned.
An effective PES often includes measures such as training, assistance with internal or external mobility, and sometimes even financial aid. Transparency and rigor in the preparation and implementation of this plan are essential to avoid any risk of requalification.
Reclassification measures
Before laying off an employee for economic reasons, the employer must actively seek out outplacement solutions for the employee, both within the company and, where applicable, with other companies in the group. Every attempt to find another position for the employee must be thoroughly documented.
Training and support
Offer the employees concerned appropriate training to help them find a new job more easily. A good training and support plan considerably reduces the risk of the dismissal being contested.
Dealing with contested dismissals
Despite all the precautions taken, an employee can still contest a dismissal for economic reasons. In the event of a dispute, the employee can take the matter to the industrial tribunal (Conseil des prud’hommes), requesting that the dismissal be reclassified as unfair dismissal. If the industrial tribunal overturns your decision, this may result in the employee’s reinstatement or the payment of significant damages.
That’s why it’s crucial to be prepared, and to have all the documents you need to prove that the economic reason is real and serious, and that the redundancy procedure has been followed in full.
| Stage | Description |
|---|---|
| Economic reasons | Document economic difficulties, technological change, etc. |
| Informing employee representatives | Communicate with employee representatives from the outset. |
| Pre-interview | Invitation and detailed interview documentation. |
| Notification | Send a registered letter explaining the reasons for dismissal. |
| Employment protection plan | Implementation of a PSE including redeployment and training. |
Avoiding the reclassification of a redundancy as unfair dismissal requires rigor and attention to detail at every stage of the process. By carefully documenting the economic reasons, strictly following the redundancy procedure, and putting in place an appropriate job protection plan, the risks of a challenge can be greatly reduced.
For the employer, it’s a proactive approach designed not only to protect himself legally, but also to deal humanely with the difficult situations encountered by employees during redundancies.
