Ten years ago, the legislator entrusted the administrative judge with disputes relating to "severance schemes", i.e. disputes relating to the validation or approval of job protection plans (JPP) by the DREETS (regional directorates for economy, employment, work and solidarity). Today, the Conseil d'État made three important decisions in this area. In the first two, it specified how psychosocial risks must be taken into account by companies when a JPP is drawn up and how the DREETS must verify it; in the third decision, it specified the legal regime of the new collective agreement termination system (RCC) established in 2017 and how it works with the JPP.
Psychosocial risks must be expressly taken into account when developing JPPs
In the event of collective redundancy, the French Labour Code provides for the drawing up by the employer of a job protection plan (JPP) or "severance scheme" which, in order to be implemented, must be validated (when it takes the form of a majority agreement with the unions) or approved by the DREETS (if the JPP results from a unilateral document from the employer), following a check that covers both the procedure for informing and consulting the staff representative institutions and the content of the JPP. With its two decisions today, the Conseil d'État ruled that as part of its control, the administration must also verify that the IRPs have been informed and consulted on the psychosocial risks (PSR) likely to be caused by the reorganisation of the company at the origin of the severance scheme and that the JPP contains, if necessary, specific measures to protect the workers against them during the implementation of the reorganisation.
For these matters, the Conseil d'État was called on by a public body and a company to challenge the annulment, by the administrative court and then the administrative court of appeal, of the administrative decisions approving their respective JPPs.
In the first case, while the DREETS had ensured that the staff representative institutions had been properly informed and consulted on the psychosocial risks, it had not checked that the employer's unilateral document included measures to ensure the safety, and protect the physical and mental health of workers. As DREETS did not implement its obligation to monitor the JPP in terms of PSR, it could not legally approve it.
In the second case, the JPP submitted to the DREETS did not include any specific measures to protect employees from the consequences on their physical or mental health of the cessation of the company's activity. In the absence of measures to prevent psychosocial risks, even though they were proven, DREETS could not legally approve the company's JPP.
For these reasons, the Conseil d'État confirmed the decisions of the CAA annulling the administrative decisions approving the job protection plans in question.
A collectively agreed termination agreement cannot be validated when it aims to replace a JPP for cessation of activity
Since 2017, the French Labour Code has provided for the possibility of collective termination agreements (RCC). This mechanism, which differs from the "voluntary departure plans" that existed previously, and which are not governed by the Labour Code, authorises an employer to offer their employees the option of voluntarily terminating their employment contract in exchange for compensation fixed within the framework of a majority collective agreement signed with representative trade unions. These contractual terminations exclude dismissal and resignation and cannot be imposed by either party.
The law specifies that, as with severance schemes, it is up to the administration (DREETS) to validate such agreements to ensure their legality and that the decisions of the administration – validation or refusal of validation – can only be challenged before the administrative judge. This is, therefore, a new competence in labour law for the administrative judge, and the decision in question is the first in which the Conseil d'État has ruled under this new competence.
In this case, the Conseil d'État was called on by a company asking it to confirm the validation by the administration of the agreed collective termination agreement signed in December 2020 and cancelled by the administrative court of appeal in October 2021.
The Conseil d'État ruled that while an agreement relating to a collective contractual termination can be validated when it is concluded for an economic reason, it cannot be in the event of the cessation of activity of a company or one of its establishments, which leads with certainty to employees who have not opted, within the framework of the RCC agreement, for a termination of their employment contract by mutual agreement, to be subject to redundancy within the framework of a JPP.
This was the case submitted to the Conseil d'État, where the closure of the production activity of an establishment of the applicant company implied that the employees who would not accept a termination by mutual agreement of their employment contract could only be made redundant within the framework of a JPP. This is why the Council of State confirms the decision of the CAA annulling the decision to validate the agreement relating to the collective contractual termination of the applicant company.
Decision No. 459626