New law on employee relocation

On announcing redundancies, a French employer is obliged to propose alternative positions elsewhere within the company or group. This policy is not limited to vacancies within France – companies must look globally within their group. In the past, companies had proposed alternative vacancies in India or Romania, and had offered the worker the local wage. Now, a new law states that, for any job proposal out of France, companies will have to offer the same wage as that offered in France.

According to Article L1233-4 (in French) of the French Labour Code, an employee can be dismissed on economic grounds only if the employer has made every effort to transfer the employee elsewhere within the company or within the group. However, the French Supreme Court (Cour de cassation) has ruled that the employer must seek alternative vacancies elsewhere in the company, and not just in France (Cass. soc. 7 October 1998, 96-42812 (in French)). It is only when foreign legislation prevents reinstatements in another country that the employer is not subject to such requirements (Cass. soc. 4 December 2007, 05-46073 (in French)).

This law has meant that employers must propose alternative posts in any country of the world where they have operations, including places where salaries and working conditions are inferior to those in France. Trade unions argued that such propositions, though imposed on the employer by case law, were unfair. In addition, many dismissals have been ruled unfair when employers did not seek alternative opportunities for the employee abroad, even after considering that they were unrealistic both for economic (for example, proposing a job in Thailand at a tenth of the salary in France) and cultural/linguistic reasons, and were unfair to the employees concerned.

Conditions set for relocation offers

The Law of 2010-499 of 18 May 2010 (in French) modifies the rules in an attempt to balance the interests of the parties. It provides that when the company or the group has operations outside France, the employer must ask employees, prior to their dismissal, whether they agree to receive offers of reinstatement abroad, and under what restrictions in terms of location and remuneration. The employees must express their agreement within six days of receiving the offer and failure to reply is taken as a decline of the offer of reinstatement to another company location abroad. Finally, the law provides that such offers (when the employees agree to receive them) must be in writing and clearly defined and must take into account the objections expressed by the employees.

The procedure has not been precisely outlined by the legislator. The new law does, however, provide that reinstatement must be in the form of a job of ‘the same category’ or an ‘equivalent job’ with an ‘equivalent remuneration’. According to discussions in the French parliament, ‘equivalent’ does not mean ‘identical’. However, when equivalent offers are not available, the reinstatement can apply to jobs of an ‘inferior category’ with the agreement of the employee. The rules described in this paragraph will also apply to offers of reinstatement within French territory.

Legal clarification awaited

In terms of the law of 18 May 2010, questionnaires asking affected workers their opinions regarding reinstatement and sent to them before their dismissal on economic grounds, had been considered lawful. However, the Supreme Court has since ruled that they have no legal value and that the absence of a response by the employee should not be taken by the employer as a reason to stop looking for reinstatement options abroad (Cass. soc. 4 March 2009, 07-42381). Moreover, the law does not state in detail what form the employers’ proposals for reinstatement should take, only that they must be in writing and personalised. It has also failed to specify the time period during which employees can be individually asked whether they agree to be offered a post abroad.

The wording of the law, which was introduced following the use of an emergency procedure, is very unclear and will require further interpretation. The French employment administration has already announced the publication of a circular to clarify the matter. Nevertheless, such a circular will not be binding before the courts.

Jean-Philippe Lhernould, HERA

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