Macron Scale - Concrete Review of Conventionality in Practice

Unconventionality in concreto

Conseil de Prud'hommes (hereinafter CPH) of Troyes

The CPH of Troyes is the first having upheld the unconventionality of the compensation ranges by two judgements of December 13, 2018 (no. 18/00035 and 18/00036).

To do so, he invoked three arguments, namely :

  • a decision of the European Committee of Social Rights (hereinafter ECSR) which upheld the violation of Article 24 of the European Social Charter (hereinafter (ESC) confronted to a Finnish system of capping unjustified dismissal compensation close to that of France;

  • the impossibility of making full compensation for the damage suffered;

  • and the non-dissuasive nature of a compensation ceiling.

In the case Finnish Society of Social Rights v. Finland (no. 106/2014), the ECSR ruled - on September 8, 2016 – that, “in certain cases of unfair dismissal, the award of compensation [capped] up to 24 months [may] not be sufficient to compensate for the losses and damage suffered [and] that the capping of compensation provided for [may] leave situations in which the compensation awarded does not cover] the damage suffered” (paragraph 47).

The parallel made by the judges between Finnish and French Law to justify the violation of ESC’s Article 24 by Article L1235-3 of the Labour Code is irrelevant for several reasons.

The Committee did not condemn the legal ceiling on unjustified dismissal compensation but the consequences it may have on the dismissed employee in the absence of alternative grounds for compensation. Beyond, the deterrent or non-deterrent nature of the capped compensation is not decisive in evaluating the conventionality of the compensation provided for.

In addition, the ECSR received on March 12, 2018 a complaint (no. 160/2018) from the French General Confederation of Labour against the “Macron” scales for “incorrect application” of ESC’s Article 24. If the forthcoming decision will not, as such, bind the French judges, it will have a leading interpretative authority. Pending the outcome of this procedure, it would be more prudent to avoid referring to the unconventionality of a foreign Law to justify the unconventionality of French provisions which, while similar in some aspects (ceiling on compensation, potential incentive to dismiss) are distinguished by others (cases of exclusion, alternative grounds of compensation).

Focused on the concrete assessment of the conventionality of a severance pay ranging from ½ to 2 months’ gross salary, the arguments drawn from the inappropriate compensation for job loss and the non-deterrent nature of the compensation ceiling imposed in the two cases in question are much more robust. The judgments of December 13, 2018 concern the dismissal of a couple who worked for the same company – with less than 11 employees – for almost 2 years.

The CPH relies on the “deleterious conditions” of their eviction, particularly on :

  • the concomitance of the two dismissals and the doubling of their financial impact on the household concerned;

  • the employer’s failure to honor an employment guarantee commitment of at least 3 years for each of the spouses;

  • and the great dishonesty of the employer;

to set aside the range provided for in Article L1235-3 of the French Labour Code and order the defendant to pay a severance of 6 months’ gross salary for the wife and 9 months’ gross salary for the husband.

On the basis of this concrete assessment – in consideration of the relevant facts – the advisers consider that the legal ceiling on compensation of dismissal WRSC should be deemed unconventional in abstracto, both in the light of ESC’s Article 24 and ILO Convention no. 158’s Article 10 : “a restrictive ceiling on labour tribunal compensation […] does not make it possible […] to assess the individual situations of employees unfairly dismissed as a whole and to make fair compensation for the damage they have suffered”. In addition, they specify that “these scales do not dissuade employers who would like to dismiss an employee WRSC. These scales make wrongdoers safer than victims and are therefore unfair” (page 9).

The link between the concrete and abstract unconventionality of the new regime is problematic because it is unjustified. It is not the principle of capping, but its application in this case that is likely to make inadequate the compensation for dismissal WRSC. Similarly, it not the principle of the scale, but its application in this case, that is likely to induce the employer to dismiss WRSC. The employee’s higher seniority increases the range of compensation and at the same time reinforces the deterrent effect of unfair dismissal.

While the concrete assessment of the unconventionality of the new system seems justified in the two cases involving low-seniority employees, it was not sufficient to establish its abstract unconventionality for all unjustified dismissals.

Conventionality in concreto

Paris Court of Appeal (pole 6, chamber 8)

The judgment (no. 16/05602) delivered on October 30, 2019 concerned the dismissal WRSC of an employee with 16 years’ seniority. In this case, the compensation range imposed by Article L1235-3 of the Labour Code varies between 3 and 13,5 months’ gross salary.

The margin of appreciation left to the judges in this case – 10,5 months for an average gross salary of 5,222.83 euros per month – explains by its magnitude the choice to validate in concreto the conventionality of the new system. Although it is not comparable with that of the lowest levels of seniority, the judges chose to generalize their validation reasoning to the whole system (page 25).

Unjustified, the generalization made on the basis of the particular facts of the case inevitably tends to discredit this approach.

In the end, the employee obtained a severance payment of 13 month’s gross salary in consideration of his age (45 years) and employment status (“a situation of compensated unemployment for 15 months and then […] paid training” (page 25).

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