OD FLASH | The consideration of professional skills required by potential buyers does not justify the annulment of a redundancy plan (PSE), as long as this criterion does not override or nullify the other legally mandated section criteria. 

Nantes Administrative Court of Appeal, 6 May 2025, Nos. 25NT00451, 25NT00507, 25NT00708

As a general rule, Article L.1233-5 of the French Labour Code provides that when an employer carries out a collective redundancy for economic reasons and no applicable collective agreement exists, the employer must define the criteria used to determine the order of redundancy, following consultation with the Social and Economic Committee. The order in which these criteria are listed in the Labour Code is not binding. The employer may also assign different weights to each criterion, depending on the level of importance attributed to them.

In the cases at hand, the companies involved had been placed under judicial reorganisation by rulings of the Commercial Court. The same court later ordered their liquidation with partial transfers of assets. Following failed collective negotiations, a unilateral document was drawn up, providing for the dismissal of employees not retained at the various sites and for accompanying social measures. The redundancy plan (PSE) was approved.

The Caen Administrative Court annulled the approval by a judgment dated 26 December 2024, on the grounds that the employer had defined the elements used to assess the “professional skills” criterion (as provided by the Labour Code) with the aim of targeting certain employees for dismissal based on their assignment to positions slated for elimination, thereby favouring the partial takeover of the companies.

The Court of Appeal, however, held that although some of the factors used to assess professional skills may have taken into account qualities sought by potential buyers, this alone does not demonstrate an intent to dismiss employees solely because of their assignment to a position or department marked for elimination.

Additionally, all four statutory criteria for determining the order of dismissals were applied and weighted, as permitted by law, and the “professional skills” criterion was not given disproportionate weight.

As a result, the Court overturned the lower court’s reasoning for annulment.

The Court of Cassation had previously held that the weighting of a dismissal criterion, while authorised by the Labour Code, must not nullify the effect of the other criteria taken into account (Cass. Soc., 8 Nov. 2023, No. 22-19.205). This administrative decision here is therefore consistent with the case law of the judiciary.