OD FLASH | Nullity of discriminatory dismissal: full compensation for loss caused by the dismissal

French Supreme Court, Social Division, November 6, 2024, No. 23-14.706

On November 6, 2024, the Social Division of the French Supreme Court (Cour de cassation) issued an important decision regarding compensation and back pay owed in cases of nullified dismissals.

In this case, an employee was dismissed for serious misconduct and subsequently brought claims before the labor court concerning the termination of her employment contract. Her claims were upheld through the appeal stage, leading the employer to bring the case before the French Supreme Court.

The employer challenged the ruling requiring them to pay the employee wages owed during the period of protection afforded to her due to her pregnancy, arguing that this period was already covered by the nullity, and that a dismissal deemed null on discriminatory grounds should only entitle the employee to a minimum of six months’ salary if no reinstatement is requested. Consequently, the employer contended that the employee could not receive wages for that period.

The issue presented to the French Supreme Court was whether a dismissal deemed null due to discriminatory grounds based on an employee’s pregnancy could entitle the employee, in addition to six months’ salary compensation, to payment of wages owed during the protection period, even when the employee has not requested reinstatement.

The French Supreme Court answered affirmatively and dismissed the employer’s appeal. It held that Directive 92/85/CEE of October 19, 1992, requires member states to implement measures prohibiting the dismissal of pregnant employees from the beginning of pregnancy until the end of maternity leave. The court further cited Article 18 of Directive 2006/54/CE of July 5, 2006, which obliges member states to enact measures ensuring redress or compensation for loss suffered due to gender-based discrimination.

The French Supreme Court also reiterated established CJEU case law indicating that dismissal during maternity leave, applicable exclusively to women, constitutes discrimination based on sex. The court highlighted the CJEU’s position that, where no reinstatement occurs, financial compensation should fully cover the loss caused by discriminatory dismissal.

The French Supreme Court interpreted Articles L. 1225-71 and L. 1235-3-1 of the French Labor Code, addressing nullified dismissals and compensation in such cases, considering the above European law, concluding that an employee who does not request reinstatement is entitled, in addition to severance and compensation equal to at least six months’ salary, to wages she would have earned during the period covered by the nullity.

Relying primarily on European law regarding the nullity of dismissals, the French Supreme Court rendered a decision whose scope should not be overly broad. First, it applies only to cases of nullified dismissals where the Macron scales do not apply; thus, the employee must first demonstrate that the dismissal was based on one of the prohibited grounds listed in Article L. 1235-3-1 of the Labor Code to justify its nullity. Nevertheless, this ruling calls for caution from employers in enacting dismissals that may be nullified, as they could potentially entail substantial compensation aimed at fully redressing the loss caused.