Redundancy for economic reasons is any dismissal motivated by an economic or social crisis. interior reorganisation or by economic difficulties.
Dismissal for economic reasons is subject to a strict procedure, failure to comply with which is sanctioned by a court ruling that the dismissal is unfair. It is also up to the employer to prove economic difficulties or internal reorganisation.
The redundancy procedure for economic reasons is divided into the following phases:
- Employers contemplating redundancies for economic reasons must convene a meeting of staff representatives and work with them to find all possible solutions for preserving the jobs threatened. These solutions include, for example, reducing working hours, short-time working, redeployment, etc.
- Minutes of the meeting must be drawn up and sent to the Labour Inspectorate within eight days.
- The labour inspector has 15 days from receipt of the report to mediate, with a view to finding a solution to maintaining jobs.
- If some redundancies prove necessary within the 15 days, a list of workers to be made redundant must be drawn up, together with a redundancy order to be followed.
Order of redundancy for economic reasons
The order of redundancy takes account first and foremost of workers with professional skills for the jobs maintained.
In the event of equal professional aptitude, the employees with the most seniority are retained. To establish the order of dismissal, seniority in the company is increased by one year for married workers and by one year for each dependent child, within the meaning of the legislation on family benefits.
The criteria do not apply if no jobs are maintained.
- Staff representatives are given the list of employees to be made redundant.
- The staff delegates are convened to a meeting no later than seven days after the list has been communicated, to hear their suggestions; these are recorded in the minutes of the meeting drawn up by the employer.
- Letters of dismissal can be drafted as soon as the meeting is over.
- Letters of dismissal and minutes of the meeting are forwarded to the Labour Inspector within one week of the meeting.
If the company does not have a staff representative, the Labour Inspector must be involved in the redundancy procedure for economic reasons.
Employee rights in the event of redundancy for economic reasons.
In addition to their statutory entitlements (wages and holiday pay), employees made redundant for economic reasons are entitled to the following benefits:
- Compensation in lieu of notice equivalent to one month's salary if the employee is not a manager and three months' salary if the employee is a manager.
- Redundancy pay calculated on the basis of seniority and salary.
- A special allowance equivalent to one month's gross salary.
Employees made redundant for economic reasons have priority hiring rights for a period of two years in the event of the redundant position being re-opened. They must be given their employment certificate.
Amicable termination solution
In any event, it is always possible to consider negotiated departure solutions with employees who are being considered for redundancy on economic grounds. This amicable solution often avoids the need for litigation.
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