Before 2017, when employees were dismissed without a real and serious cause, they could obtain full compensation for the damage suffered. The amount of damages was left to the discretion of the judges and could therefore be very depending on the time, place, section of the court and the specific cases submitted to the courts. There was an important uncertainty depending before which court the suit had been filed and at what moment it was judged and, to be true, what kind of company was involved. Besides, the damages awarded were far higher than what was expected or the opposite for the employees.

In 2017, a reform introduced a compensation scale for unfair dismissal in the French labour code. This dismissal indemnity grid provides for minimum and maximum damages according to the seniority of employees.

After a few years of harsh opposition of the lower courts, the French Supreme Court (“Cour de cassation”) ruled on the conformity of this indemnification grid with international conventions.

• According to this grid, the French labour courts grant employees, whose dismissal is judged to have no real or serious cause, damages whose amount varies from 1 month’s salary (for employees with at least 8 months of seniority) and up to 20 months’ salary (for an employee with 20 years of seniority and beyond).
• A specific scale also exists for companies with fewer than 11 employees. In this case, damages allowed to employees are lower: from 5 month’s salary (for employes with at least one year of seniority) to 2.5 months’ salary (for employees with 10 years of seniority and beyond).

Macron indemnification grid only compensates damages resulting from the termination of the employment contract. Additional damages may be granted to employees for overtime hours, or in case of discrimination or harassment, or termination based on unlawful reasons, like health, origin, gender, etc.

Thanks to this grid, employers are now able to anticipate more accurately what they risk before French labor law courts, in case of wrongful dismissals, unless the CJUE (Court of Justice of the European Union) overruled the French Supreme Court.

Isabelle Quenet, Partner

Alice Urbain, Associate

Marc Patin, Partner