The scale applicable to compensation for unfair dismissal - “Barème Macron”

The scale applicable to compensation for unfair dismissal - “Barème Macron”

• Genesis of the French compensation scale

Under French law, if a dismissal is without real and serious cause, the judges may either (i) propose the reinstatement of the employee in the company (very rare in practice), or (ii) allocate to the employee an compensation to be paid by the employer.

Ordinances dated September 22, 2017 introduced a scale governing this compensation. This scale, known as the "Barème Macron", provides for minimum and maximum amounts expressed in months of salary, varying according to the employee's seniority and the size of the company.

• Confirmation by the French Supreme Court (“Court of Cassation”) of the legitimacy of the Scale

The question of its validity was quickly raised.

Critics of the scale argued that it contradicted the provisions of the article 24 of the European Social Charter and the article 10 of Convention 158 of the International Labour Organization. These texts provide that any unjustified dismissal must be the object of an adequate or appropriate compensation for the prejudice suffered by the employee.

In two decisions of May 11, 2022, the Court of Cassation put an end to the divergence of interpretation of the Courts of Appeal by deciding that:

• The provisions of the European Social Charter do not have a direct effect between individuals, so that its invocation before the judge, in the context of a dispute over a dismissal, cannot lead to the exclusion of the application of the scale;

• Article 10 of Convention 158 of the International Labour Organization does have a direct effect, but the scale is consistent with it.

According to these decisions, the provisions of the Labor Code reasonably allow for compensation for the unjustified loss of employment.

The Court concludes that, in the event of dismissal without real and serious cause, it is only up to the judge to assess the concrete situation of the employee in order to determine the amount of compensation due between the minimum and maximum amounts determined by the Scale.

• A Scale deemed contrary to the European Social Charter by the European Committee of Social Rights (ECSR)

Believing that this scale does not comply with Article 24 of the European Social Charter ratified by France, insofar as it does not allow for adequate or appropriate compensation for the damage suffered by the employee, in disregard of this text, the unions filed a complaint with the ECSR.

In a decision of March 23, 2022 the ECSR ruled in favor of the unions - the Committee considers that the right to adequate compensation or other appropriate remedy within the meaning of Article 24.b of the Charter is not guaranteed by this scale and that, consequently, there is a violation of this article

The Committee considered that the ceilings resulting from the Ordinance of 2017 "are not high enough to repair the damage suffered by the victim and to be dissuasive for the employer".

The Committee also emphasized that "the judge has only a narrow margin of maneuver in examining the individual circumstances of wrongful dismissals."

However, this decision is not binding. The Court of Cassation had moreover reminded us in a press release accompanying these decisions that the decisions of the ECSR "will not produce any binding effect".