Other Author: Pauline Vauléon, Trainee Solicitor, Mayer Brown
In a long-awaited decision, on 11 May 2022 the Cour de cassation validated the “Macron scale” of compensation which can be ordered in unfair dismissal cases and confirmed that judges cannot disregard it based on an employee's personal situation.
The “Macron scale” results from an ordinance1 which came into force in 2017. It introduced a major change in the French labor code:
- it removed the minimum amount of damages equal to six-months’ salary for employees with at least two years of seniority which could be ordered by the judge in an unfair dismissal case, and set a lower minimum between one and three months’ salary, and
- most of all, it set a maximum amount of damages varying according to the length of service and the size of the company, between one and twenty months’ salary.
This scale does not apply when the judge finds that the dismissal is null and void notably on the ground of a violation of a fundamental right, bullying, harassment, discrimination, etc.
Since 2017, employees and unions have repeatedly challenged the validity of this ordinance before French courts. They argue that the “Macron scale” is in breach of Article 10 of Convention 158 of the International Labor Organization and Article 24 of the European Social Charter, which provide that in a case of unfair dismissal, the judge must be able to order the payment of an "adequate" compensation to the employee.
In two opinions dated 17 July 20194, the Cour de cassation (highest civil jurisdiction) also validated the principle of the compensation scale. Although important, these opinions were not legally binding.
Despite all this, some Employment Tribunals and Courts of Appeal have ruled that the “Macron scale” can be disregarded if, given the employee's situation, it does not provide adequate compensation for the prejudice suffered.
The Cour de cassation ruling
In two cases, both relating to unfair dismissals, on 11 May 2022, the Labor chamber of the Cour de cassation5 ruled that:
- the “Macron scale” is not in breach of provisions of Article 10 of ILO Convention No. 158 on the ground that:
– the compensation provided for is adequate since it is sufficiently dissuasive to avoid unfair dismissal (the Court also recalled that, in addition to the compensation for unfair dismissal, the judge could order the employer to reimburse to the unemployment national agency (“Pôle Emploi”) all or part of the unemployment allowances paid to the dismissed employee up to a limit of 6 months);
– the judge may, in the case of a violation of a fundamental right, discrimination or harassment, etc. exclude the application of the “Macron scale” and provide for higher compensation, proportionate to the employer's fault.
- Article 24 of the European Social Charter does not have direct effect and therefore cannot not be invoked in a dispute between individuals.
- Consequently, apart from cases covered by the law (harassment, discrimination, violation of a fundamental right, etc.), judges may not exclude the application of the “Macron scale” according to the employee's personal situation. According to the Court, this would create uncertainty for individuals and is contrary to the constitutional principle of equality before the law.
1 Ordinance. n° 2017-1387, 22 Sept. 2017 as codified in article L. 1235-3 of the French Labor code
2 Decision no. 415243 of 7 December 2017
3 Decision no. 2018-761 of 21 March 2018
4 Cass. consultations, 17 July 2019, no. 15012 and no. 15013
5 Cass. soc., 11 May 2022, n° 21-14.490, FP-B + R ; Cass. soc., 11 May 2022, n° 21-15.247, FP-B + R