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Job Safeguard Plan (PSE) - Economic Redundancy

Verified 28 June 2019 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Labor

In the event of dismissal for economic reasons, the employer must implement a job-saving plan (PES). The plan aims to prevent or limit layoffs. It is based on the number of employees whose dismissal is envisaged. It must be validated or approved by the Direct: titleContent..

The Employment Safeguard Plan (EDP) is a scheme which provides for various measures with the aim of avoiding or limiting redundancies for economic reasons in the company.

PES is compulsory in 50 minimum employees, where the redundancy project concerns 10 minimum employees over a period of 30 consecutive days..

Mandatory measures

The PES has included a reclassification plan to facilitate the reclassification of employees whose dismissal is inevitable.

The procedure for monitoring the implementation of the reclassification plan shall be specified in the PSE.

The PSE provides for:

  • Actions for the internal reclassification in France of employees, on jobs falling within the same category of employment or equivalent to those they hold (or, subject to the express agreement of the employees concerned, on lower category jobs)
  • Actions promoting the resumption of all or part of the activities with a view to avoiding the closure of one or more establishments
  • New business creation
  • Actions promoting external reclassification (in particular by supporting the reactivation of the employment pool)
  • Support measures for the creation of new activities or the takeover of existing activities by employees
  • Training, validation of experience (VAE) or conversion measures to facilitate the internal or external reclassification of employees to equivalent jobs
  • Measures to reduce or adjust working hours and measures to reduce the volume of overtime worked on a regular basis
  • Conditions for implementing the reclassification leave or professional security agreement (CSP)
  • Reclassification plan for older employees or employees with social or qualifying characteristics which make their reintegration into employment particularly difficult

FYI  

the employer of an undertaking employing at least 1,000 employees who intends to close an establishment is subject to the obligation to seek a potential buyer.

Optional measures

The PSE may also provide for other optional measures, such as:

A majority corporate agreement must specify the measures provided for by the PSE.

In the absence of agreement, the employer shall draw up a document containing the measures taken by the PSE.

Agreement

A majority collective agreement in the undertaking may determine the measures provided for by the PSE.

The procedure for monitoring the implementation of the reclassification plan shall be specified in the PSE.

The Social and Economic Committee is consulted.

The agreement shall be subject to Direct: titleContent..

The measures provided for in the Agreement shall enter into force after validation by the Directorate.

The employee must be informed of the validation decision:

  • By posting at the workplace
  • By any other means to determine the date on which he was informed
No agreement

In the absence of agreement, the PSE measures are specified in a document prepared by the employer.

The Social and Economic Committee is consulted.

The document shall be submitted to Direct: titleContent..

The measures provided for in this document shall enter into force after approval by the Directorate.

The employee shall be informed of the approval decision:

  • By posting at the workplace
  • By any other means to determine the date on which he was informed

Please note

one part of the PES measures may be determined by agreement, and the other part by the employer's document.

Except in the case of recovery or liquidation, the dismissal of the employee shall be canceled in one of the following cases:

  • No decision to validate an agreement or to approve the document by the Directorate
  • Direct Refusal to Validate Agreement or Certify Document
  • Cancelation by the Directorate of the validation or approval decision due to the absence or inadequacy of the PSE
  • Failure to consult the ESC

The judge may order the continuation of the employment contract or declare the dismissal null and void.

The employee asks for his reinstatement in the company

The judge may order the employee to be reinstated in the undertaking if the employee so requests.

The employee is reinstated in the enterprise (if the employee and the employer agree), with the maintenance of his acquired advantages.

The employee does not ask for his reinstatement in the company

If the employee does not request his/her reinstatement in the undertaking or if it has become impossible (in particular because of the closure of the establishment or the site or the absence of available employment), the employer must pay him/her compensation for zero termination..

This allowance is at least equal to the salaries of the last 6 months.

Please note

a 12 months from the date of notification of the termination of the employment contract shall apply to contest dismissal on economic grounds.

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