France: Introduction of a cap for Employment Tribunal awards

The French Government has proposed a new law intended to cap tribunal damages awards in respect of unlawful dismissals.

The bill has not yet been finally adopted but is close to finalisation. Due to its highly political nature, it is still subject to discussions and may be further amended.

Under the current proposals, the usual cap is determined by the individual’s length of service and the size of the employer, as set out in the following table, but in some cases further damages may be due (see below). All references to “months” are to months’ remuneration, both fixed and variable:

These sums are obviously in addition to the notice, holiday and remunerations payments under the collective bargaining agreement, when applicable.

The Tribunal may grant damages exceeding the above-mentioned limits in the event of particularly serious failings by the employer, including:

• moral or sexual harassment;
• dismissal based on discrimination;
• breach of the right to strike, of the protective status of employee representatives, of the protective status relating to maternity and paternity leave, workplace accidents, occupational disease, or incapacity;
• more generally, the breach of a fundamental freedom.

Once finalised, the law is likely to enter into force from end of July 2015 but would only apply to proceedings initiated after such date.

Impact for employers

If these measures are passed, this would obviously provide employers with more certainty in terms of the costs of dismissal and sums which are negotiated in settlement.

Author: Celia Gallo, Associate