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France – ‘Termination by mutual consent’ for employees unfit to work following a workplace accident

Written by
Capstan Avocats, the law firm setting the benchmark for labour law in France.
According to a recent decision from the French Supreme court an employment contract can be validly terminated ‘by mutual consent’ by an employee declared unfit for his or her post following an accident at work, except in cases of fraud or defective consent.

An employee made unfit to work by an accident at work may agree to the termination of his/her employment contract mutually with their employer (‘rupture conventionnelle’).

Termination by mutual consent allows an employer and an employee to terminate the employment contract by agreeing on the principle and the consequences of the termination. It is solely based on the free consent of both parties. It is an easy way to terminate an employment contract while allowing the ex-employee to receive termination pay and unemployment benefits. This type of termination procedure is subject to validation by the labour administration, which only conducts a high-level review, checking the agreement of both parties and the level of the termination pay (to which a statutory minimum applies).

The termination by mutual consent procedure has had great success since its creation in 2008 and is now expanding through case law, even in the most protected territory of employment: health at work.

An employee who has been the victim of an accident at work is protected against termination by a number of legal provisions relating to discrimination. But if an employee is declared unfit for his or her post, some specific rules apply. The French Labour Code obliges the employer (unless exempted by the doctor responsible for health in the workplace) to redeploy the incapacitated employee, within the company or within the group. The obligation to redeploy is considered in the strongest terms by judges in the event of litigation. The dismissal can only take place if the employer demonstrates that the employee cannot be redeployed or has refused its redeployment offers.

In 2014, the Supreme Court already accepted that an employment contract could be terminated by mutual consent while the employee was on sick leave after an accident at work (30 September 2014) and also that a termination by mutual consent could be concluded with an employee who had been declared fit with some restrictions after an accident at work (28 May 2014), in a context where the employee did not argue that her consent was defective and as long as the employer did not commit any fraud.

Now, with a decision rendered on 9 May 2019, the Supreme Court has gone further and accepted the validity of a termination by mutual consent more widely, extending it to an employee who has been a victim of a work accident and declared unfit afterwards. Mutual termination will be valid in these circumstances, as long as there is no fraud and as long as both parties have given their consent to the termination freely. This is an important decision, which allows employers to find an alternative to having to organise the redeployment of an employee who is unfit to work following a workplace accident.

Anne-Laure Périès
Partner - France
Capstan Avocats