France: Employment May Amicably End When There Is Incapacity

By Lucille Gressier and Pierre-Alexis Quéré June 7, 2019
LIKE SAVE
France: Employment May Amicably End When There Is Incapacity

​French employers can terminate the employment of workers who can't perform their job after a workplace accident by entering "amicable termination agreements," according to a recent decision from the nation's highest court.

These agreements allow employers to end a worker's employment in exchange for paying the worker an agreed-upon severance. In France, such terminations are usually considered valid, except in the case of fraud by the employer or lack of consent by the employee.

Before the high court's recent decision, case law—law formed in the French courts—held that employers and workers can agree on termination, even if a work accident didn't lead to incapacity, or an inability to work.

But the high court—the French Court of Cassation—had never ruled on incapacity. In a May 9 judgment, it did.

Landmark Ruling

In the case before the court, an occupational physician declared a worker unable to perform her job after a work accident. The worker agreed to quit her job in exchange for a sum of money from her employer.

She subsequently sued, alleging that the purpose of this agreement was to circumvent the employer's legal obligation to find another job for her. She asked a lower court to annul the agreement—a request the Court of Appeal ultimately denied.

[SHRM members-only toolkit: Introduction to the Global Human Resources Discipline]

The court ruled that except in cases of contract fraud or a defect in consent, a termination agreement may be valid when signed by an employee who has been declared by a doctor to be unfit for work because of a workplace accident. Contract fraud is when a fact in the contract is intentionally misrepresented. Consent to a contract must be freely given by someone with the mental capacity to form a contract.

The French Court of Cassation upheld the appeal court's reasoning.

In an earlier case involving similar circumstances, the Court of Cassation had already approved the appeal court's reasoning that the termination agreement of an employee who suffered a workplace injury but was not incapacitated was valid. In that case, the employee did not allege a defect of consent, and there was no fraud by the employer.

In this case, the Court of Cassation applied the same reasoning to incapacity.

This decision provides employers with additional security for amicable termination agreements involving workers injured on the job.

Lucille Gressier and Pierre-Alexis Quéré are attorneys with Ogletree Deakins in Paris.

LIKE SAVE

SHRM HR JOBS

Hire the best HR talent or advance your own career.

Salary Increase Projections 2021

The economic effects of COVID-19 have forced employers to re-evaluate salary increase plans for 2021.

The economic effects of COVID-19 have forced employers to re-evaluate salary increase plans for 2021.

VIEW REPORTS

SPONSOR OFFERS

HR Daily Newsletter

News, trends and analysis, as well as breaking news alerts, to help HR professionals do their jobs better each business day.