News Newsflash 2016 Castegnaro Newsflash 02.08.2016
Castegnaro Newsflash 02.08.2016
Case law - Disparity of treatment between employees who resign for gross misconduct and employees who are dismissed with immediate effect
Employees who are unfairly dismissed with immediate effect are entitled to severance pay if they have worked at the company for at least 5 years, as well as compensation in lieu of notice.
However, employees whose resignation due to the employer’s gross misconduct is recognized as being justified are not entitled to severance pay or compensation in lieu of notice. Does this go against the principle of equal treatment established by article 10bis paragraph 1 of the Constitution? Yes, according to the Constitutional Court.
Brought before the 8th chamber of the Court of Appeal by two rulings dated 22 February 2016 (case role nos. 40356 and 40736), the Constitutional Court had to resolve the following two preliminary questions:
- “Does article L. 124-6 of the Labour Code, which establishes the right to compensation in lieu of notice for employees dismissed by their employer with immediate effect, and whose dismissal is then judged to be unfair by the employment tribunal, but that does not provide the same compensation for employees who have terminated their employment contract due to the gross misconduct of their employer and whose resignation is then deemed to be justified and well-founded by the employment tribunal, thus treating these two groups of employees differently, comply with the principle of equality before the law established by article 10bis (1) of the Constitution?
- Does article L. 124-7 of the Labour Code, which establishes the right to severance pay for employees dismissed by their employer with immediate effect, and whose dismissal is then judged to be unfair by the employment tribunal, but that does not provide the same severance pay for employees who have terminated their employment contract due to the gross misconduct of their employer and whose resignation is then deemed to be justified and well-founded by the employment tribunal, thus treating these two groups of employees differently, comply with the principle of equality before the law established by article 10bis (1) of the Constitution?”
To answer these questions, the Court began by deciding whether the categories of employee between which the discrimination had been alleged – namely employees unfairly dismissed with immediate effect and employees who have resigned with good reason due to the employer’s gross misconduct – are in a comparable situation. For the Court, the two categories of employee are in comparable situations, as in both cases, the termination of the employment relationship with immediate effect is due to the employer.
The Court then continued its analysis by comparing the rights of employees unfairly dismissed with immediate effect with those of employees who resign with good reason due to the employer’s gross conduct, and decided that the second category of employee is only entitled to damages when the resignation is justified, while the first category can, if the dismissal is unfair, claim not only damages, but also compensation in lieu of notice (article L. 124-6 of the Labour Code) and legal severance pay (article L. 124-7 of the Labour Code) which are, as the Court reiterated, lump sum amounts.
In view of the above, the Constitutional Court therefore decided that articles L. 124-6 and L.124-7 of the Labour Code were contrary to the principle of equality of treatment established by article 10 bis (1) of the Constitution, where they grant employees unfairly dismissed with immediate effect due to the employer’s gross misconduct, who find themselves in a comparable position, a “difference of treatment that is not based on objective disparities or rationally justified, adequate or proportional to its purpose”.
