Quarterly revenue growth nullifies economic redundancy

An employee is dismissed by his company for economic reasons. The dismissal was notified to him on 26 December 2017. He brought an action before the court challenging the validity of the dismissal.

The Court of Appeal dismissed the employee's motion and his claim for compensation and damages. It was based on the decline in the company's turnover for four consecutive quarters in 2016 compared with 2015, with the company employing more than 300 employees. The Court of Appeal did not consider that the slight increase in turnover of 0.50% in the first quarter of 2017 was such as to indicate an improvement in the company's economic situation.

The Court of Cassation ruled that the appeals court did not properly assess the four consecutive quarters before the dismissal as it did not take into account the slight increase in the first quarter of 2017.

The company granted the employee's requests because the increase in turnover in the first quarter of 2017 was part of the last four quarters preceding the dismissal. Indeed, the Court of Cassation states that it is now necessary to look at the date of notification of the termination of the employment contract (and not at the date of initiation of the proceedings) to establish the significant drop in turnover over the last four quarters.

A slight quarterly increase in the company's turnover is therefore sufficient to invalidate an economic dismissal.