Update on the termination of the employment contract by mutual agreement
Introduction
The termination by mutual agreement (rupture conventionnelle) is an original method which allows the employee and the employer to put an end to the employment contract under the conditions they have fixed in an accredited convention. The applicable legislation for the termination by mutual consent is fixed in the articles L.1237-11 to L. 1237-16 of the labor code. Nevertheless, the growing success of this alternative way to terminate an employment contract led the Supreme Court to clarify by its caselaw, some unclear points. Thus, specific compensation, withdrawal period, or cancelation of the termination agreement are the matters which have occupied the Supreme Court the last few months.
A specific indemnity in case of termination by mutual agreement
Employer and employee negotiate the employee’s indemnity. This indemnity cannot be inferior to the common dismissal indemnity, as fixed in article L. 1234-9 of the labor code (L.1237-13 Lab. Code) nor to the indemnity as set forth in the collective bargaining agreement or a company-wide agreement.
But what happens if the employee can benefit from a more advantageous dismissal indemnity such as, the derogatory dismissal indemnity for journalist for instance (L7112-3 Lab. Code) ?
In June 2015 (Cass. soc., June 3, 2015, n° 13-26.799), the Supreme Court already ruled that the minimum amount of the specific indemnity for termination by mutual agreement is to be calculated according to the common dismissal indemnity.
As regard the possibility to benefit from a more advantageous conventional indemnity ; what happens if the employer is not represented by one of the signatory unions of the addendum n°4 of January 11, 2018 of the ANI (Interprofessional National Agreement) ?
In June 2018 (Cass. soc., June 27, 2018, n° 17-15.948), the Supreme Court has ruled that, since this addendum is not extended, only the employees working in a company represented by the signatory unions (Medef, UPA, CGPME) can benefit from the minimum threshold provided in their collective bargaining agreement as long as it is more favorable than the common dismissal indemnity. Therefore, the employees belonging to the sector of audiovisual, edition, television broadcasting or caoutchouc for instance, cannot impose to their employer the benefit of the minimum threshold established in their collective bargaining agreement. The employer is only obliged to pay to the employee an indemnity at least equal to the legal dismissal indemnity.
In front of such difference of regime, the supreme court as renewed in his annual report, his proposal to amend article L. 1237-13 of the labor code, so that the specific indemnity for termination by mutual agreement cannot be inferior to a more advantageous indemnity as set forth in a collective bargaining agreement or a derogatory legal provision, irrespective of the business sector of the company.
But what happens if the employee can benefit from a more advantageous dismissal indemnity such as, the derogatory dismissal indemnity for journalist for instance (L7112-3 Lab. Code) ?
In June 2015 (Cass. soc., June 3, 2015, n° 13-26.799), the Supreme Court already ruled that the minimum amount of the specific indemnity for termination by mutual agreement is to be calculated according to the common dismissal indemnity.
As regard the possibility to benefit from a more advantageous conventional indemnity ; what happens if the employer is not represented by one of the signatory unions of the addendum n°4 of January 11, 2018 of the ANI (Interprofessional National Agreement) ?
In June 2018 (Cass. soc., June 27, 2018, n° 17-15.948), the Supreme Court has ruled that, since this addendum is not extended, only the employees working in a company represented by the signatory unions (Medef, UPA, CGPME) can benefit from the minimum threshold provided in their collective bargaining agreement as long as it is more favorable than the common dismissal indemnity. Therefore, the employees belonging to the sector of audiovisual, edition, television broadcasting or caoutchouc for instance, cannot impose to their employer the benefit of the minimum threshold established in their collective bargaining agreement. The employer is only obliged to pay to the employee an indemnity at least equal to the legal dismissal indemnity.
In front of such difference of regime, the supreme court as renewed in his annual report, his proposal to amend article L. 1237-13 of the labor code, so that the specific indemnity for termination by mutual agreement cannot be inferior to a more advantageous indemnity as set forth in a collective bargaining agreement or a derogatory legal provision, irrespective of the business sector of the company.
The withdrawal period of a new termination agreement replacing the first one
Once the termination agreement is signed, the parties benefit from a 15 days withdrawal period. Following this period, the administration has another 15 days period to certificate the agreement. But what happens if the administration refuses to certificate the agreement (in case it is illegal for instance) and the parties sign another agreement ? do they have to fix a new 15 days withdrawal period ?
Considering that the withdrawal period is an essential guarantee of the parties’ free consent to terminate the employment contract, the Supreme Court has ruled that “the employee shall benefit from another withdrawal period and, as he did not benefit from it, the second termination agreement must be declared null and void”; even if it was more favorable to the employee than the first one (Cass. soc., June 13, 2018, n° 16-24.830). Therefore, as soon as the termination agreement is modified or cancelled, a new agreement must be drafted and certificated by the administration, which creates a new 15 days withdrawal period.
Considering that the withdrawal period is an essential guarantee of the parties’ free consent to terminate the employment contract, the Supreme Court has ruled that “the employee shall benefit from another withdrawal period and, as he did not benefit from it, the second termination agreement must be declared null and void”; even if it was more favorable to the employee than the first one (Cass. soc., June 13, 2018, n° 16-24.830). Therefore, as soon as the termination agreement is modified or cancelled, a new agreement must be drafted and certificated by the administration, which creates a new 15 days withdrawal period.
The consequences of the judicial cancellation of the termination agreement
The employee has a 12-month period to request the cancellation of his termination agreement to a judge.
This cancellation has many consequences. The termination of the employment contract will be considered as a redundancy without actual and serious basis and will oblige the employer to pay to the employee a dismissal indemnity and damages. But what happens with the indemnity the employee has perceived in virtue of his termination agreement. In May 2018 (Cass. soc., May 30, 2018, n° 16-15.273), the Supreme Court confirmed his caselaw and ruled that if indeed the cancelation of the termination agreement obliges the employer to pay to the employee a dismissal indemnity and damages for dismissal without actual and serious basis, it also obliges the employee to restitute the amount he has perceived in virtue of his termination agreement. It is therefore up to the employee to consider the most advantageous situation before contesting his agreement to a judge, all the more since the new severance indemnity scale : keep the indemnity based on his termination agreement or restitute it and receive the indemnities for redundancy without actual and serious basis.
This cancellation has many consequences. The termination of the employment contract will be considered as a redundancy without actual and serious basis and will oblige the employer to pay to the employee a dismissal indemnity and damages. But what happens with the indemnity the employee has perceived in virtue of his termination agreement. In May 2018 (Cass. soc., May 30, 2018, n° 16-15.273), the Supreme Court confirmed his caselaw and ruled that if indeed the cancelation of the termination agreement obliges the employer to pay to the employee a dismissal indemnity and damages for dismissal without actual and serious basis, it also obliges the employee to restitute the amount he has perceived in virtue of his termination agreement. It is therefore up to the employee to consider the most advantageous situation before contesting his agreement to a judge, all the more since the new severance indemnity scale : keep the indemnity based on his termination agreement or restitute it and receive the indemnities for redundancy without actual and serious basis.
