French Labour Code
In forceA redundancy for economic reasons is a redundancy carried out by an employer for one or more reasons not inherent in the person of the employee, resulting from the elimination or transformation of a job or a modification, refused by the employee, of an essential element of the employment contract, following in particular :
1° Economic difficulties characterised either by a significant change in at least one economic indicator such as a fall in orders or sales, operating losses or a deterioration in cash flow or gross operating surplus, or by any other factor likely to justify these difficulties.
A significant fall in orders or sales is deemed to have occurred when the duration of the fall, compared with the same period in the previous year, is at least equal to :
a) One quarter for a company with fewer than eleven employees ;
b) Two consecutive quarters for a company with at least eleven employees and fewer than fifty employees;
c) Three consecutive quarters for a company with at least fifty employees and fewer than three hundred employees;
d) Four consecutive quarters for a company with three hundred employees or more;
2° Technological change ;
3° A reorganisation of the company necessary to safeguard its competitiveness;
4° The closure of the company.
The elimination or transformation of a job or the modification of an essential element of the employment contract is assessed at company level.
Economic difficulties, technological change or the need to safeguard the competitiveness of the company are assessed at company level if it does not belong to a group and, if it does, at the level of the sector of activity common to this company and the companies of the group to which it belongs, established on national territory, in the absence of fraud.
For the application of this article, the notion of group refers to the group formed by an undertaking called the dominant undertaking and the undertakings it controls under the conditions defined inarticle L. 233-1, in I and II of article L. 233-3 and inarticle L. 233-16 of the Commercial Code.
The sector of activity used to assess the economic reason for redundancy is characterised, in particular, by the nature of the products, goods or services delivered, the target clientele, as well as the distribution networks and methods, relating to the same market.
The provisions of this chapter apply to any termination of the employment contract resulting from one of the causes set out in this article, with the exception of the conventional termination referred to in articles L. 1237-11 et seq. and the termination by mutual agreement within the framework of a collective agreement referred to in articles L. 1237-17 et seq.
