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In a decision dated May 9, 2019 (1), for the first time, the French Cour de Cassation upheld a mutual termination agreement (rupture conventionnelle) involving an employee declared unfit for his position by the occupational physician (médecin du travail).

The mutual termination agreement of an employment contract is provided for in Articles L. 1237-11 to L. 1237-16 of the French Labor Code.

The law does not provide for any exceptions to establishing a mutual termination agreement between an employer and an employee; nevertheless, the requirements for approval are as follows:

    – For unprotected employees by an employee representative mandate, the termination agreement must be approved by the Administration;
    – For employees protected by an employee representative mandate (2), approval from the labor inspection authority is required.

However, there have been some serious doubts about whether employment contracts can be mutually terminated in certain specific situations.

As an example, before mutual termination agreements were first introduced into the Labor Code (3), the French Cour de Cassation ruled that any mutually termination of an employment contract is not allowed during the period of suspension of an employment contract due to a work-related accident (4).

More importantly, the French administration clearly excluded the possibility of signing a mutual termination agreement in cases where the employee benefited from specific protection against dismissal (during maternity leave, an absence following an occupational accident or due to an occupational disease) (5).

In recent years, the French Cour de Cassation has given several judgments approving mutual termination agreements in the following situations:

    – Between an employer and an employee with whom there is a dispute (6);

    – Between an employer and an employee declared fit pending certain conditions after an occupational accident (7);

    – Between an employer and an employee with a diagnosed occupational disease or who has suffered an occupational accident (8 and 9). The judgment stated that the termination occurred “during the period of suspension due to an occupational accident or disease“.

    – Between an employer and an employee, during the periods of suspension of the employment contract to which the employee is entitled during maternity leave (10);

Nevertheless, the French Cour de Cassation recalled, in each of these judgments, that the mutual termination agreement must be devoid of any defect of consent (error, violence, misrepresentation) or fraud on the part of the employer.

In this respect, the French Cour de Cassation recently ruled (11) that the existence of acts of psychological harassment does not in itself impact the validity of the termination agreement, unless consent has not been properly obtained. In other words, acts of psychological harassment are not grounds on their own to annul the mutual termination agreement. However, the line between psychological harassment and psychological violence is quite thin, so that in practice, in the event of psychological harassment, the employer takes the risk that the lack of consent may be retained by the judges and the mutual termination agreement may be cancelled.

In the decision of May 9, 2019, the French Cour de Cassation clarified that it is possible to mutually terminate an employment contract with an employee declared unfit for his/her job by the occupational physician and as such, the contract is no longer suspended.

This means that it is now possible to bypass certain protective requirements for employees declared unfit, including:

    – the employer’s duty to reassign the employee to a new position, which may be burdensome if the company is part of a group;
    – the re-instatement of salary payments in the absence of a reassignment or termination of the employment contract within one month;
    – the possibility of initiating a dismissal procedure only if it can be demonstrated that it is impossible to reassign the employee to another position;
    – the payment of a specific severance amount in the event of professional incapacity, which is equal to twice the amount of the dismissal indemnity and compensatory payment in lieu of notice period.

However, unless the employee negotiates compensation for termination in excess of the minimum compensation (12) to encourage him to renounce its protective status, it is not in the employee’s interest to consent to a mutual termination agreement of his/her employment contract.

In the judgment of May 9, the judges ruled against the defect of consent since the employee did not allege it and considered that proof of the employer’s fraud was not established, since the employee had 15 days to withdraw before the termination agreement was duly approved and in order.

The French Cour de Cassation also recalled that fraud must be proven by the person who invokes it and cannot be presumed.

Nonetheless, as a precautionary measure and in order to avoid the risk of judges retaining the grounds of fraud or lack of consent, we advise to inform the unfit employee, for whom a mutual termination by agreement is being considered, of the consequences of such a mutually agreed termination.

(1) Cass. Soc., May 9, 2019, o.°17-28767
(2) Mandates specified in articles L. 2411-1 et L. 2411-2 of the French Labor Code
(3) The Mutual termination agreement was first introduced into the French Labor Code through Law no. 2008-596 of June 25, 2008, although prior to that it was used in practice without a specific legal framework.
(4) Cass. Soc., June 29, 1999, no. 97-40426; Cass. Soc., January 4, 2000 no. 97-44566
(5) Circ. DGT no. 2009-04 of March 17, 2009, no.1.2.
(6) Cass. Soc., May 23, 2013, no. 12-13865
(7) Cass. Soc., May 28, 2014, no.12-28082
(8) Cass. Soc., September 30, 2014, no.13-16297
(9) Cass. Soc., December 16, 2015, no.13-27212
(10) Cass. Soc., March 25, 2015, no. 14-10149
(11) Cass. Soc., January 23, 2019, no. 17-21.550
(12) In the event of a mutual termination agreement, the compensation is at least equal to the legal severance pay or, in companies whose industries are represented by the MEDEF, the CGPME or the UPA (French inter-professional employers’ organizations) , to the relevant contractual severance pay if it is higher.

Failure to take care of one’s physical fitness, to comply with the Club’s physical training program and adopt a lifestyle in accordance with one’s profession constitutes serious ” unsporting ” misconduct that justifies the termination of the fixed-term contract.

Article L. 1221-1 of the French Labor Code is explicit in that “the employment contract is executed in good faith“. Derived from good faith, loyalty is a reciprocal duty which neither the employer nor the employee can deviate from, even if the employment contract makes no reference to it.

In a decision of 20 February 2019 (1), the French High Court of Appeal (Cour de cassation) ruled on a dispute between a professional basketball player and his employer. Victim of an injury that occurred in the course of his professional activity, the player on leave has continuously refused to follow the medical care protocol set by the team’s doctor to attend physiotherapy sessions, even though the player is required to do so by virtue of his contract and of the collective agreement.

In these circumstances, the employer terminated the fixed-term employment contract early on the grounds of serious misconduct. However, the professional player considered that his employer could not legitimately require him to perform any activity related to his employment during the suspension of the employment contract due to his sick leave.

This decision is noteworthy for three reasons.

First, while the legislator has never taken a stance on the definition itself of the duty of loyalty, the High Court of Appeal has constantly defined its scope. This decision confirms that loyalty is required for all contracts, regardless of the sector of professional activity.

As such, the sports sector is no exception to the traditional rule according to which an employee is required to be loyal in his professional relationship with his employer; the professional sports player must also not commit acts contrary to the interests of the company, which are likely to damage its reputation or performance (2).

Consequently, loyalty is as much a part of the game on a basketball court as it is in the changing rooms.

Second, and even more importantly, the duty of loyalty extends beyond unexpected changes in an employment contract (3). Even when the performance of the employment contract is suspended by an occupational accident or disease, the duty of loyalty remains, unlike the duty to provide work in return for compensation.

Underlying this, the High Court of Appeal reaffirms the spirit of Article L. 1226-18 of the Labor Code, which stipulates: “when an employee who has suffered an occupational accident or disease holds a fixed-term employment contract, the employer may not terminate the contract during the periods of suspension of the contract unless he can justify either a serious misconduct on his part or a case of force majeure“.

To justify the dismissal of the basketball player on the grounds of violating the duty of loyalty, the High Court of Appeal agrees with the reasoning of the judges that serious misconduct results from the only fact that he did not “lend himself to the care necessary to restore his physical potential in relation to the injury“, whereas he was contractually and conventionally bound even during his work absence following an occupational accident.

It should be noted that the High Court of Appeal strictly applies the principle according to which a reason based on the employee’s personal life may justify disciplinary dismissal if it constitutes a breach of a duty pursuant to the employee’s employment contract.

Finally, reciprocity in the employment relationship can be also demonstrated by the employer’s and employee’s obligation to ensure health and safety.

While an employer is required to ensure that its employees can adapt to changes in their jobs throughout the duration of their contract (4), the fact remains that the Labor Code also requires each worker to take good care, based on the worker’s training and abilities, of his or her health and safety, as well as that of the other persons who are affected by the worker’s actions or failures to perform at work (5).

However, we would have been surprised if the High Court of Appeal had reasoned differently and acknowledged that, for the sake of privacy, the employee should be completely exempted from his or her duty of loyalty. After as, the athlete employee was advised of the health measures after his accident, specifically to ensure his physical recovery.

This being said, from now on, one might expect that serious misconduct will also be whistled at on the benches of the labor courts…

(1) Cass. Soc. 20/02/2019, n°17-18.912, M/ c/Sté JDA Dijon basket: by noting that “during the period of work absence following his work-related accident, the employee had not attended an appointment to organize the physiotherapy sessions prescribed by the team’s attending physician and that he had not made himself available for the physiotherapist for the purposes of following the medical care protocol”, the Court of Appeal “highlighted the existence of a breach by the employee of his duty of loyalty, making it impossible to maintain the employment contract”;
(2) Cass. Soc. 12/10/2011, n°10-16.649 ; Cass. Soc. 21/11/2018, n°16-28.513 F-D ;
(3) Cass. Soc. 18/03/2003, n°01-41.343 ; Cass. Soc. 30/03/2005, n°03-16.167, FS-PB ;
(4) Art. L. 6321-1 C. trav;
(5) Art. L. 4122-1 C. trav.