Bankruptcy Law

The provisions of Article L. 622-13 of the Commercial Code, relating to the terms and conditions for the continuation of contracts in progress at the time of the opening of the safeguard procedure, do not apply to employment contracts . In the absence of special rules, ongoing employment contracts are continued by operation of law according to the general rules of law . Contracts are performed in  …

Regime of ongoing employment contracts

The provisions of Article L. 622-13 of the Commercial Code, relating to the terms and conditions for the continuation of contracts in progress at the time of the opening of the safeguard procedure, do not apply to employment contracts . In the absence of special rules, ongoing employment contracts are continued by operation of law according to the general rules of law . Contracts are performed in accordance with the terms initially stipulated, unless the employer proposes modifications necessary to the continuation plan, which the employee may refuse within a period of one month .

An employment contract constitutes an ongoing contract if it has not expired or been terminated before the opening of the safeguard procedure. Since the employment contract is subject to general law, it does not continue, pursuant to Article 1217 of the Civil Code, if it is terminated due to the non-performance by one of the parties of their obligations. An employee may request the termination of his or her employment contract before the agreed term, and despite the opening of an insolvency procedure against the employer, when the latter fails to fulfill its obligation to provide work . Similarly, failure to pay wages justifies the immediate termination of the employment contract, even if an insolvency procedure has been opened at the same time against the employer .

The termination of the employment contract and the implementation of the redundancy insurance cover taken out by the company cannot result solely from the opening of an insolvency procedure . Article L. 1243-1 of the Labor Code provides that “[u]nless the parties agree, a fixed-term employment contract may only be terminated before the end of its term in the event of serious misconduct, force majeure or unfitness for work established by the occupational physician". However, according to the Court of Cassation, the opening of insolvency procedure does not constitute a case of force majeure that allows a fixed-term employment contract to be terminated early . Article L. 1243-4 states that "[t]he early termination of a fixed-term employment contract at the initiative of the employer, except in cases of serious misconduct, force majeure or unfitness for work established by the occupational health physician, entitles the employee to damages in an amount at least equal to the remuneration he would have received until the end of the contract”.

Finally, Article L. 662-4 of the Commercial Code provides that in the context of a safeguard procedure, any dismissal of an employee representative, envisaged by the receiver or the employer, must be submitted to the social and economic council, which gives an opinion on the proposed dismissal.

Cass. soc., 28 November 2000, LawLex202200001633JBJ (RJ).

Cass. soc., 14 January 2004, LawLex202200001632JBJ (RJ).

Cass. soc., 30 June 2010, LawLex202200001631JBJ (LJ).

Cass. 1re civ. 7 July 1998, LawLex202200001661JBJ (LJ). Rappr. Cass. soc., 22 March 2007, LawLex202100001183JBJ (LJ) concerning the guarantee of the AGS.

Cass. soc., 18 October 1994, LawLex202200001636JBJ (RJ) ; 16 October 2002, LawLex202200001670JBJ(LJ).

Bankruptcy Law

108. Regime of ongoing employment contracts

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

108. Regime of ongoing employment contracts

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise