Bankruptcy Law

Article L. 641-11-1, VI of the Commercial Code expressly excludes employment contracts from the general rules governing the continuation of ongoing contracts. Therefore, in the absence of special rules, current employment contracts are continued ipso jure in accordance with the rules of ordinary law . Contracts are performed in accordance with the terms initially stipulated, unless the employer pr …

Ongoing employment contracts

Article L. 641-11-1, VI of the Commercial Code expressly excludes employment contracts from the general rules governing the continuation of ongoing contracts. Therefore, in the absence of special rules, current employment contracts are continued 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 progress if it has not expired or been terminated prior to the opening of the court-supervised liquidation procedure. Where the employment contract is subject to ordinary law, it does not continue, pursuant to Article 1217 of the Labor Code, if it is terminated due to the non-performance by one of the parties of its obligations. An employee may request the termination of his employment contract before the agreed term, and despite the opening of an insolvency procedure against the employer, when the latter no longer fulfils its obligation to provide him with work  or no longer pays him his wages .

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 . Article L. 1243-4 provides 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 certified by the occupational physician, entitles the employee to damages at least equal to the remuneration he would have received until the end of the contract”.

Lastly, Article L. 662-4 of the Commercial Code stipulates that any redundancy of an employee representative envisaged by the receiver or the employer must be submitted to the Works Council, which gives its opinion on the proposed redundancy.

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

801. Ongoing employment contracts

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

801. Ongoing employment contracts

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise