At a time when media resonate the initiatives on the Collective Agreement Termination (CAT) envisioned by certain groups in France, a short update seems necessary to remind that no, the mechanism implemented by the Macron Ordinance of September 22, 2017 is not a miracle solution, denounced by some people, that would allow companies to notify economic redundancies without any control whatsoever.
The mechanism implemented by Article 10 of the Ordinance of September 22, 2017 aims to allow volunteer-based job cuts, outside the framework of economic redundancies, which are necessarily based on an economic cause.
1. The CAT requires a collective agreement, whose negotiation is mandatory. This agreement will have to be approved by the administration.
In other words, no agreement, no CAT.
The content of the collective agreement, negotiated according to the conditions established in Article L. 2232-12 of the French Labour Code, is fixed by Article L. 1237-19-1 of the same code, and provides a certain amount of measures that the parties to the negotiation have to conform to.
The measures are the following:
Article L. 1237-19-1
Amended by Ordinance n°2017-1718 of 20 December 2017 – art. 1
The agreement on CAT ascertains:
1° The terms and conditions concerning the information of the Social and Economic Committee;
2° The maximum number of departures envisaged, of associated job cuts, and the duration of the implementation of the CAT;
3° The conditions that the employee must satisfy in order to profit from the CAT;
4° The terms of presentation and of examination of the application of departure from the employees, including the conditions of transmission of the written agreement of the employee to the device provided by the collective agreement;
5° The criteria of selection between potential candidates to the departure;
6° The terms of calculation of the severance pay guaranteed to the employee, which cannot be inferior to the legal indemnities owed in case of a dismissal.
7° The measures meaning to facilitate the external reassigning of the employees on equivalent positions, such as training actions, validation of acquired experience or of reconversion or actions supporting the creation of new activities or resumption of existing activities by the employees;
8° The terms of monitoring the effective implementation of the agreement on the CAT.
We can already notice that the CAT requires an agreement negotiated within the company, which agreement provides the mandatory provisions aiming to protect the employees and is, of course, volunteer-based.
But that is not the end of it.
The agreement must be conveyed to the French Labour administration (DIRECCTE) to be approved.
The administration will therefore control whether the agreement conforms to the legal provisions, and, of course, that it is not reached in order to escape, for example, an economic redundancy plan.
The administration has 15 days, after the receipt of the agreement, to approve the agreement. It needs to be specified that the lack of response by the administration on the deadline, will amount to a tacit approval of the agreement.
2. The RCC is not a substitution to Economic Redundancy Plan
Contrary to what has been affirmed by some people, the mechanism implemented by the Macron Ordinances is not supposed to replace Economic Redundancy Plans, for one simple reason: the companies that will actually face economic difficulties, and that will have recourse to the CAT, in an abusive manner, or that will undertake an Economic Redundancy Plan, just after a CAT agreement, would take the risk to see their agreements challenged, or invalided by the administration.
The CAT is an autonomous type of dismissal. It must be entirely distinguished from Economic Redundancy Plans.
Henceforth, a company that faces economic difficulties justifying the recourse to dismissals, would have more chances to resort successfully to an Economic Redundancy Plan (or even implement a voluntary departure plan), rather than attempt a hazardous CAT, that would, at the end, not enable the company to achieve its goals.
So, when is the recourse to a CAT advised?
There are situations in which companies do not have the necessary visibility to decide the implementation of an Economic Redundancy Plan, which is usually costly, and badly reflected internally.
However, it is possible that some employees are candidates to a voluntary departure, and that the employer, on his side, also wishes to profit from this flexibility and this opportunity, without having to justify economic difficulties, legally speaking.
When the CAT enables two wishes to meet – that of several employees, voluntary candidates to departure, and that of the employer – and the contract is balanced following the negotiation of the collective agreement, why not allow this autonomous type of dismissal?
The contractualisation of labour law allows the flexibility which the companies – and the employees – require to adapt to the markets and to the constant and increasingly rapid developments of today’s economic context.
The mechanism implemented by Article 10 of the Ordinance of September 22, 2017 aims to allow volunteer-based job cuts, outside the framework of economic redundancies, which are necessarily based on an economic cause.
1. The CAT requires a collective agreement, whose negotiation is mandatory. This agreement will have to be approved by the administration.
In other words, no agreement, no CAT.
The content of the collective agreement, negotiated according to the conditions established in Article L. 2232-12 of the French Labour Code, is fixed by Article L. 1237-19-1 of the same code, and provides a certain amount of measures that the parties to the negotiation have to conform to.
The measures are the following:
Article L. 1237-19-1
Amended by Ordinance n°2017-1718 of 20 December 2017 – art. 1
The agreement on CAT ascertains:
1° The terms and conditions concerning the information of the Social and Economic Committee;
2° The maximum number of departures envisaged, of associated job cuts, and the duration of the implementation of the CAT;
3° The conditions that the employee must satisfy in order to profit from the CAT;
4° The terms of presentation and of examination of the application of departure from the employees, including the conditions of transmission of the written agreement of the employee to the device provided by the collective agreement;
5° The criteria of selection between potential candidates to the departure;
6° The terms of calculation of the severance pay guaranteed to the employee, which cannot be inferior to the legal indemnities owed in case of a dismissal.
7° The measures meaning to facilitate the external reassigning of the employees on equivalent positions, such as training actions, validation of acquired experience or of reconversion or actions supporting the creation of new activities or resumption of existing activities by the employees;
8° The terms of monitoring the effective implementation of the agreement on the CAT.
We can already notice that the CAT requires an agreement negotiated within the company, which agreement provides the mandatory provisions aiming to protect the employees and is, of course, volunteer-based.
But that is not the end of it.
The agreement must be conveyed to the French Labour administration (DIRECCTE) to be approved.
The administration will therefore control whether the agreement conforms to the legal provisions, and, of course, that it is not reached in order to escape, for example, an economic redundancy plan.
The administration has 15 days, after the receipt of the agreement, to approve the agreement. It needs to be specified that the lack of response by the administration on the deadline, will amount to a tacit approval of the agreement.
2. The RCC is not a substitution to Economic Redundancy Plan
Contrary to what has been affirmed by some people, the mechanism implemented by the Macron Ordinances is not supposed to replace Economic Redundancy Plans, for one simple reason: the companies that will actually face economic difficulties, and that will have recourse to the CAT, in an abusive manner, or that will undertake an Economic Redundancy Plan, just after a CAT agreement, would take the risk to see their agreements challenged, or invalided by the administration.
The CAT is an autonomous type of dismissal. It must be entirely distinguished from Economic Redundancy Plans.
Henceforth, a company that faces economic difficulties justifying the recourse to dismissals, would have more chances to resort successfully to an Economic Redundancy Plan (or even implement a voluntary departure plan), rather than attempt a hazardous CAT, that would, at the end, not enable the company to achieve its goals.
So, when is the recourse to a CAT advised?
There are situations in which companies do not have the necessary visibility to decide the implementation of an Economic Redundancy Plan, which is usually costly, and badly reflected internally.
However, it is possible that some employees are candidates to a voluntary departure, and that the employer, on his side, also wishes to profit from this flexibility and this opportunity, without having to justify economic difficulties, legally speaking.
When the CAT enables two wishes to meet – that of several employees, voluntary candidates to departure, and that of the employer – and the contract is balanced following the negotiation of the collective agreement, why not allow this autonomous type of dismissal?
The contractualisation of labour law allows the flexibility which the companies – and the employees – require to adapt to the markets and to the constant and increasingly rapid developments of today’s economic context.
