Reasons for Terminations: New Procedural Rules
From now on, an employer will be able to specify the reason for the termination retroactively, which significantly weakens the scope of one of the fundamental principles of termination law—namely, that “the termination letter sets the boundaries of the dispute”—a principle that was previously strictly enforced by labor courts. For the record, any deficiency or lack of clarity in the grounds for dismissal—at the time the termination notice was issued—necessarily rendered the dismissal without real and serious cause (Cass. ass. plén. November 27, 1998, No. 97-40.423, No. 96-40.199, and No. 96-44.358).
Today, even for ongoing termination proceedings (that is, for terminations that have not yet been finalized), the employer is therefore permitted to specify the grounds—after sending the termination letter—in the following two cases:
- when he wishes to specify the grounds for the termination, on his own initiative. He must then do so within fifteen days of receiving notice of the termination,
- when required to do so, following a request from the employee. The procedure in such cases is as follows:
- Within fifteen days of receiving notice of termination, the employee may request further details from the employer regarding the reasons stated in the termination letter by registered mail with return receipt requested or by hand delivery with a receipt,
- Upon receipt of such a request, the employer will then have fifteen days to provide further details if it so wishes (rather than to elaborate on the reason, as the government had initially envisaged).
From now on, therefore, the scope of the dispute is determined only after the employer has provided any necessary clarifications.
However, under no circumstances may the employer add new grounds.
This new procedure itself has implications for penalties related to insufficient justification, since the new Article L. 1235-2 of the Labor Code now provides that if the employee has not submitted a request for clarification to the employer, “the irregularity constituted by insufficient grounds in the termination letter does not, in and of itself, deprive the termination of valid and serious cause and entitles the employee to compensation not exceeding one month’s salary.”
There are three possible scenarios:
- Case No. 1: The terminated employee did not request clarification from the employer
In this scenario, the lack of sufficient grounds in the termination letter will not, on its own, render the termination without valid and serious cause. The employee will therefore only be entitled to compensation equal to a maximum of one month’s salary. - Case No. 2: The terminated employee requested clarification, but the employer did not respond
The judge may rule that this failure to provide a reason, or an insufficient reason, constitutes termination without real and serious cause. - Case No. 3: The terminated employee requested clarification, to which the employer responded, or the employer clarified the reason on its own initiative
In both of these scenarios, the judge will exercise his or her discretion regarding the grounds cited to determine whether the termination is indeed justified.
According to Decree No. 2017-1820 of December 29, 2017, establishing standard templates for termination notices, the employer must expressly state in the termination letter that the employee has the right to request further details regarding the reason for the termination within fifteen days of receiving the letter, as well as the employer’s obligation to respond within fifteen days or to take the initiative to provide further details regarding the stated reason.
This reform will undoubtedly lead to litigation over a new substantive issue: Did the employer merely specify the grounds for the termination, or did it go much further by presenting new arguments—which, for their part, remain inadmissible? It will be up to labor court judges to decide this issue on a case-by-case basis, which could become an additional source of legal uncertainty for a reform that was, in fact, intended to provide greater certainty in labor relations.
