Bankruptcy Law

The transferee is not required to take over all the employees assigned by the debtor to the units sold, but only those required to maintain the business. Where the transferee has indicated such an intention in its offer, the plan for the disposal of the business, which provides for redundancies on economic grounds, may only be adopted after consultation with the staff representative under the cond …

Redundancies

The transferee is not required to take over all the employees assigned by the debtor to the units sold, but only those required to maintain the business. Where the transferee has indicated such an intention in its offer, the plan for the disposal of the business, which provides for redundancies on economic grounds, may only be adopted after consultation with the staff representative under the conditions set out in Article L. 1233-58 of the Labor Code . In particular, the plan provides for the redundancies that must take place within one month of the judgment, upon simple notification by the receiver, subject to the rights of notice provided for by law or collective labor agreements . The fact that a redundant employee is made redundant more than one month after the court has authorized the sale of the business is merely a formal irregularity which has no effect on the authorization contained in the court's decision, but which gives rise to a right to compensation .

Furthermore, in companies with fifty or more employees, a job protection plan must be drawn up by the receiver, who implements the procedure provided for in II of Article L. 1233-58 of the Labor Code within one month of the judgment . In the absence of such a plan, the redundancies have no real or serious cause . A collective agreement may determine the content of the plan . In particular, it provides the timetable for redundancies, the number of jobs to be lost, the occupational categories concerned and the arrangements for implementing training and redeployment measures . In the absence of an agreement, a document drawn up by the legal representative or the receiver after the last assembly of the social and economic committee sets out the content of the job protection plan and contains the same information as the agreement . An employee may only be made redundant for economic reasons if all efforts to train and adapt have been made and if the person concerned cannot be redeployed in the available jobs located in France in the company or other companies in the group to which the company belongs and whose organisation, activities or place of operation allow all or some of the staff to be transferred . The receiver, who is bound by the same legal and contractual obligations as the employer, may not, in order to avoid his obligation to redeploy, invoke the reduced time-limits imposed by the combined application of Articles L. 641-4 of the Commercial Code  and L. 3253-8 of the Labor Code for notifying redundancies .

For redundancies involving at least ten employees in a company with at least fifty employees, Article L. 1233-58, II, provides that the collective agreement or the document drawn up by the receiver or legal representative must be sent to the administrative authority for validation of the agreement or approval of the document. The employer, receiver or legal representative may not terminate the employment contracts before notification of the favorable validation or approval decision, or the expiry of the time-limits set, on pain of irregularity . In the event of an unfavorable validation or homologation decision, the employer, receiver or legal representative must consult the social and economic committee within three days. Depending on the case, the amended document and the opinion of the social and economic committee or an amendment to the collective agreement are sent to the administrative authority, which renders its decision within three days . The administrative authority verifies the conformity of the content of the agreement or document, in particular the implementation of redeployment measures. The Court of Cassation considers that a receiver who is content to send a standard letter to certain companies in the debtor's group, mentioning the redundancy of fifty-eight employees, without specifying the characteristics of the positions occupied, who makes a limited search for external redeployment solutions, in particular by omitting major companies in the region, and who does not implement the conventional redeployment procedure, cannot certify that serious and personalized efforts have been made, and is liable to the employee .

Pursuant to Article R. 631-36 of the Commercial Code, redundancies may only be validly ordered by virtue of an authorization to dismiss given by the court that adopts a disposal plan if the decision provides, in its operative part, the number of employees whose redundancy is authorized, as well as the activities and professional categories concerned . Consequently, a redundant employee who is made redundant pursuant to a decision that only specifies the number of employment contracts whose continuation has been proposed by the purchaser lacks real and serious grounds . Redundancies involving a greater number of employees than that provided for in the disposal plan approved by the commercial court also lack real and serious cause . Furthermore, a transferee who replaces a redundant employee with another commits fraud, thereby depriving the dismissal ordered by the receiver of the debtor company of real and serious cause, and entitling the employer to damages .

Lastly, the transferee, who, in his initial offer, undertook not to make any of the debtor's employees redundant for a period of twenty-four months, may not, after adoption of the disposal plan, which includes this offer as an annex, make any redundancies for economic reasons . On the other hand, the clause in the disposal plan which requires the transferee to operate the business taken over for two years with the debtor's employees, on pain of damages, or not to make any redundancies without the prior authorization of the commercial court, does not deprive it of the right to make redundancies on disciplinary grounds . The judgment, which adopts a disposal plan and authorizes dismissals, is res judicata only as regards the existence of an economic cause, the number of redundancies authorized, and the activities and categories of employment concerned, without it falling within the powers of the court which adopts it to authorize the dismissal of employees whose employment contract has been suspended following an accident at work .

Cass. soc., 19 May 2015, LawLex202100003469JBJ (RJ).

Cass. com., 6 March 2019, LawLex202100003464JBJ (LJ).

Cass. com., 23 March 2016, LawLex202100003471JBJ (LJ).

Cass. soc., 10 July 2001, LawLex202100003472JBJ (RJ).

Cass. soc., 3 February 1998, LawLex202300003814JBJ (RJ).

Cass. soc., 13 February 2008, LawLex202300004491JBJ (RJ).

Cass. soc., 14 September 2016, LawLex202100001175JBJ (RJ).

Cass. soc., 17 May 2011, LawLex202100003496JBJ (RJ) ; 16 May 2007, LawLex202300004457JBJ (RJ).

Cass. soc., 5 January 2022, LawLex202200002254JBJ (LJ).

Cass. soc., 24 March 2010, LawLex202100003475JBJ (RJ).

Applicable to the receivership procedure on reference from art. L. 631-22 C. com.

Bankruptcy Law

601. Redundancies

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601. Redundancies

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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