25 July 2019
The Macron ceiling assesses minima and maxima indemnities in case of dismissal without cause. It is part of the French Labor Code.
Since 2018, different French Labor Courts contested the validity of the Macron Ceiling pretending that it is contrary to European law, as the ceiling does not allow to offer “adequate” reparation. The French Supreme Court Cour de Cassation has been asked to give a formal opinion (avis) and ruled out that the Ceiling is compatible with European law: as part of the French labor law, it sets a valid scale for indemnities to be paid in case of unfair dismissal.
The French Minister of Labor commented the ruling, pointing out that the validation contributes to secure start ups and foreign investors as they will be able to estimate in advance the damages a Labor Court would apply if no settlement can be reached between employer and employee in case of dismissal.
Indeed, since 2018, the number of Court Actions in France decreased significantly since the mandatory inclusion of the Macron Ceiling in the French Labor Code…..the parties were preferring settlement negotiations and mediation rather than struggling before Court. The attitude of certain French Labor Courts interfered with this reassuring tendency.
The clarification will hopefully help to maintain the job increase in France which is estimated at 0. 9 on an annual basis for 2019 in the private sector.