OD Flash | Total cessation of activity justifies termination of employment contract for an employee on sick leave due to a work accident.

Court of Cassation, Civil, Social Division, September 11, 2024, 22-18.409, Published in the bulletin

Under the terms of article L.1226-9 of the French Labor Code, during periods when the employment contract is suspended due to a work-related accident or occupational illness, the employer may only terminate the contract if he can only justify:

• serious misconduct on the part of the person concerned,
• the employee’s inability to maintain the contract for a reason unrelated to the accident or illness.

In a decision dated September 11, 2024, the French Supreme Court ruled on the termination of an employee’s contract during a period of suspension following a work-related accident in the event of the company’s total cessation of activity.

Several employees were dismissed by the company due to its cessation of activity. One of the employees was on sick leave due to a work accident and agreed to take part in the professional safeguard agreement offered by the employer. Their employment contract was then terminated by mutual agreement at the end of the cooling-off period, in accordance with the rules governing the professional safeguard agreement.

The employee referred the matter to the Labor court on the grounds that the employer had failed to comply with the protective rules applicable to victims of work-related accidents and had thus failed to characterize the impossibility of maintaining the contract for a reason unrelated to the accident.

The Court of Appeal rules in favor of the employee and declared his dismissal null and void on the grounds that the company had not provided any evidence to demonstrate that it was impossible to maintain the employment contract for a reason unrelated to the work-related accident.

The French Supreme Court overrules appeal ruling and held that the company’s total and definitive cessation of activity was not contested, which meant that it was impossible for the employer to maintain the employee’s employment contract. It justifies the impossibility of maintaining the contract, even for a protected employee due to a work-related accident, and therefore authorizes the employer to notify the employee’s dismissal, without violating the protective provisions of article L.1226-9 of the French Labor Code.

The existence of economic grounds does not necessarily mean that it is impossible to maintain the contract for a reason unrelated to the work-related accident or occupational illness (Cass. soc., July 7, 2009, 08-40.885). The same applies to the adherence to a professional safeguard agreement (Cass. soc., December 14, 2016, 15-25.981).   

This ruling affirms that the total cessation of a company’s activity characterizes the impossibility for the employer to maintain an employee’s employment contract for a reason unrelated to the work-related accident or occupational disease.