Update on the application of “Macron scale” by French judges in case of unfair dismissal

France

Thanks to a major reform in 2017, a statutory scale determines the amount of damages due to the employee in case of unfair dismissal (Article L.1235-3 of the Labour Code). This scale is not applicable in certain cases such as nullity of the dismissal because of discrimination, harassment, etc.

This scale (so-called “Macron scale”) depends on the employee’s monthly gross salary and provides for a minimum amount and a maximum amount of damages depending on the number of employees in the company (more or less than 11 employees in the company) and the employee’s length of service.

For example, in a company employing more than 11 employees, the award allocated to an individual with 2 years of service in case of unfair dismissal would be of min. 3 months of gross salary and max. 3,5 months of gross salary. An individual with 6 years of service would obtain an indemnity of min. 3 months of gross salary and max. 7 months of gross salary.

The introduction of this minimum – maximum award system was a big change in French law because so far, only a minimum award was provided, but no cap. This was creating a lot of legal uncertainties for employers as rulings could be very different from one tribunal to another. Obviously, the introduction of a cap was not seen as good news by employees and unions.

Over the last years, individuals and unions seized French Labour Courts and argued that the “Macron scale" was not compliant with international conventions signed by France.

Some Courts were resisting to new provisions and rejected the application of this scale, considering that it was inconsistent with international texts.

On May 11, 2022, the French Supreme Court ruled for the first time on the validity of the “Macron scale” and indicated that:

  • The scale is consistent with Article 10 of ILO Convention n°158 according to which in case of unjustified dismissal, the judge must be able to order the payment of an “adequate” award to the employee,

  • European Social Charter has no direct effect in France. Consequently, individuals and employers cannot rely on its Article 24 which states that signatory States undertake to recognize the right to adequate compensation for employees who have been unfairly dismissed,

  • French judge cannot choose to set aside the scale provided by the Labour Code, on the grounds that its application would not make it possible to take into account the personal situation of each individual and award him with an “adequate” compensation as referred in Article 10 of ILO Convention n°158.

Thus, the French Supreme Court prevents any reconsideration of the “Macron scale” applying in case of unfair dismissal. This definitely puts an end to the resistance movement of certain courts and will eventually provide legal security as to applicable rules.