Sunday, August 1, 2010


New French law relating to redeployment of employees in case of lay-offs 

By Deborah Sankowicz & Stéphane Henry
Paul Hastings

Under French law, when a company terminates an employee for economic reasons (i.e. not linked to the person of the employee) without having valid grounds to do so, it may be held liable for damages for wrongful termination. Moreover, even when companies have good grounds, they remain exposed to payment of damages for wrongful termination in cases in which the court considers that they have failed to comply with their redeployment obligation. 

Article L. 1233-4 of the French Labor Code imposes, on the employers, an obligation to search for an alternative redeployment position before terminating an employee. The company has to search for and propose any vacant position (equivalent job or, if not available, a job requiring lesser qualifications) within the company or within companies belonging to the same group, even if they are located abroad.

Under the pre-existing law, without being certain that the employee would be interested in an international redeployment, the employer had to search and propose any open positions, which were available all over the world. The search process was long and burdensome, all the more in large groups with multiple locations. As a result of such redeployment obligation, employers were required, in many cases, to propose jobs located in low cost countries at low salaries, which gave rise to public and media criticism as well as litigation, these offers not being considered as fair by the courts.

To facilitate employers’ redeployment search, a new law was passed (law n°2010-499 dated 18 May, 2010): employers are now required to send a questionnaire to the employees concerned by a termination for economic reasons in order to know if each employee would accept to receive redeployment proposals abroad, and the potential restrictions that he/she may have, notably in terms of location or compensation. The employee has six working days to answer this questionnaire. If the employee accepts to receive offers abroad, the employer has to send him/her a precise proposal in writing depending on the restrictions the employee has expressed, if any. If the employee refuses to be redeployed abroad, the employer is exempted from searching for open positions abroad.

It should be noted that the possibility to use a questionnaire does not alter the employer’s obligation regarding vacant positions available within any of its French legal entities, which must still be proposed in any case.

An administrative circular letter is still to be issued, in particular to specify the content of the questionnaire.