Last week, France’s Court of Cassation, one of its highest courts, put the issue of the so-called “Macron Grid” beyond doubt. Individual judges have no discretion to depart from it because they think it might breach the International Labour Organization Convention on Termination of Employment. The Court said the law did not breach the Convention and judges are strictly bound to work within its compensation framework.
In France, if a judge finds that a dismissal, including a collective dismissal, is without “cause réelle et sérieuse” (real and serious cause) – and they often do – they can award compensation to the dismissed employee to make up for the harm resulting from the loss of employment. Over the years, the payments awarded by judges varied considerably from court to court and region to region.
In 2017, an Ordinance (No. 2017-1387 of 22 September 2017) changed the rules significantly. Known as the “Macron Grid” (barème Macron), judges were constrained to award compensation based on minimum and maximum amounts set in terms of number of months’ salary, depending on the employee’s seniority.
The “Grid” was designed to give certainty to employers and employees dismissal compensation and to eliminate “unfairness” between courts and regions. But unions and union-side lawyers hated it. Despite court ruling that it was in conformity with the French Constitution, they suggested to judges that it breached international laws, such as Article 24 of the European Social Charter and Article 10 of International Labour Organization Convention No. 158 on Termination of Employment. This gave first instance and appeal judges the latitude to depart from the Grid notably in cases where they felt the grid did not allow them to compensate employees entirely for the prejudice involved in losing their job, especially for employees with little seniority, for which the upper part of the grid is on the low side.
The Court of Cassation has now ruled that:
- The compensation scale for employees dismissed without “cause réelle et sérieuse” does not contravene Article 10 of Convention No. 158 of the International Labour Organization (ILO).
- Judges have no discretion and must apply the Grid.
- Art 24 of the European Social Charter is irrelevant as the Charter does not have direct effect.
However, as the grid does not apply to cases of discrimination, bullying or working time issues, this leaves plenty of scope for litigation around these issues.
Commenting on the decision, Joel Grangé, from the Paris-based law firm, Flichy Grange, said: “This decision not only secures the exposure in case of litigation on unfair dismissal but also makes it much easier to find amicable solutions before the trial.”