Bankruptcy Law

The provisions of the Commercial Code relating to the continuation of contracts in the course of performance when the insolvency procedure is opened do not apply to employment contracts . In the absence of special rules, current employment contracts continue ipso jure in accordance with the rules of ordinary law . Contracts are performed in accordance with the terms initially stipulated, unless th …

Current employment contract in the course of performance

The provisions of the Commercial Code relating to the continuation of contracts in the course of performance when the insolvency procedure is opened do not apply to employment contracts . In the absence of special rules, current employment contracts continue ipso jure in accordance with the rules of ordinary law . Contracts are performed in accordance with the terms initially stipulated, unless the employer proposes modifications required by the continuation plan, which the employee may refuse within one month .

An employment contract is a contract in the course of performance if it has not expired or been terminated prior to the opening of the receivership procedure. Since the employment contract is subject to ordinary 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 his or her obligations. An employee may request termination of his or her employment contract before the agreed term, and despite the opening of the insolvency procedure against the employer, when the latter fails to fulfill its obligation to provide work . Similarly, failure to pay wages justifies the employee's intention to terminate the employment contract, even if an insolvency procedure has been opened against the employer at the same time .

Under no circumstances, however, can the termination of the employment contract and the triggering of the redundancy insurance cover taken out by the company result solely from the opening of the insolvency procedure . Article L. 1243-1 of the Labor Code stipulates that “[u]nless agreed by the parties, a fixed-term employment contract may only be terminated before expiry of the term in the event of serious misconduct, force majeure or unfitness certified by the occupational physician”. However, according to the Court of Cassation, the opening of an insolvency procedure does not constitute a case of force majeure which would allow a fixed-term employment contract to be terminated early . In this respect, Article L. 1243-4 stipulates that “[a]n early termination of a fixed-term employment contract at the initiative of the employer, except in cases of serious misconduct, force majeure or unfitness certified by the occupational physician, entitles the employee to damages at least equal to the remuneration he or she would have received until the end of the contract”.

Lastly, Article L. 662-4 of the Commercial Code stipulates that any dismissal of an employee representative by the manager or the employer must be submitted to the social and economic commitee, which gives its opinion on the proposed dismissal.

C. com. L. 622-13, VI, applicable by reference to art. L. 631-14.

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 AGS guarantee.

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

Bankruptcy Law

378. Current employment contract in the course of performance

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Les notions juridiques connexes

378. Current employment contract in the course of performance

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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