3/11/2017 - Does terminating an employment contract reclassified as a resignation require the employee to comply with the contractual notice period ?


By  Alexandre MARINELLI, lawyer in Paris

From the employee’s perspective, prior to terminating an employment contract under the mechanism known as “prise d’acte de rupture” (notification of termination), account should be taken of the risk of reclassification (“requalification” or the act whereby a court restores an act’s or a fact’s classification or characterisation, without settling on the parties’ classification or characterisation of that act or fact) into a mere resignation, pursuant to which damages would be due the employer for failure to comply with the prior contractual notice period.

Alexandre Marinelli, of the ADAM-CAUMEIL law firm, intervened in an employment-related dispute between an employer, a subsidiary of an international group, Company Z, and a former employee, Mr LS.

Mr LS had filed a claim before the Conseil des Prud’hommes (or Labour Relations Court) of BOULOGNE-BILLANCOURT (Hauts-de-Seine) for damages based on a “prise d’acte de rupture”, a judicial legislative creation that allows an employee, in the event of the employer’s material breach, to dismiss himself (“s’auto-licencier”), leaving the employer to bear the termination damages and contractual notice period.

The employee petitioned for the recognition of the termination of the contract at his initiative and the reclassification of this termination into a wrongful dismissal against Company Z.

To establish his employer’s liability, Mr LS raised the issue of the substantial amendment of several aspects of his employment contract, which took place in the context of implementing a new work organisation within the group’s companies.

Having given notice of his termination under the “prise d’acte de rupture” mechanism, the employee stopped reporting to work, without his employer having waived his contractual notice period. 

However, it is settled case law that, particularly in the event of a dismissal deemed to be unfair, the contractual notice period gives rise to damages by operation of law for the benefit of the employee, irrespective of a finding of any harm.

Conversely, when a resigning employee does not comply with his contractual notice period, it is reasonable to believe that the employee may be required to pay such damages to his employer. 

In practice, however, in the situation just described, courts generally dismiss the employer’s claim for damages on the ground that there is no evidence of injury suffered by the employer. In this case, the Conseil de prud’hommes had dismissed Mr LS’s claim and found that his notification of termination (his “prise d’acte”) was in fact a notification of resignation, but did not draw the necessary conclusions, including, in particular, as regards the failure to implement his contractual notice period.

The employee appealed and the employer cross-appealed, petitioning for the court to order the employee to pay the employer damages for non-compliance of the employee’s notice period.  In its decision handed down on 26 October 2017 (case number 15/04002), pursuant to Article L.1237-1 of the Employment Code, the Court found that “in the event of resignation, the employee is required to comply with a notice period … and, unless waived, the employee who does not comply owes his employer damages the amount of which is equal to his corresponding wages”. 

These damages are therefore one-time damages and the VERSAILLES Court of Appeal held that they are due “irrespective of a finding of injury suffered by the employer”.  

This decision is certainly not a first, the Labour Chamber having already ruled in this direction in 1990 and 1991 (Labour Ch., 9 May 1990, case number 88/40044 and Labour Ch., 23 Oct. 1991, case number 88/41278), but it is rare that it is taken up by the lower courts.

This decision should nevertheless be celebrated since it contributes to the improvement of moral and ethical standards in employment relations, which remains one of the objectives of civil liability in general.

From the employee’s perspective, prior to terminating an employment contract under the “prise d’acte de rupture” mechanism, account should be taken of the risk of reclassification into a mere resignation, plus, in this case, damages to the employer for non-compliance with the contractual notice period.

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