OD FLASH | Dismissal for economic reasons: the redeployment obligation is assessed in light of positions available before the date of dismissal, not subsequent recruitments made for the purpose of maintaining the company’s activity prior to its permanent closure

Cour de cassation, civile, Chambre sociale, 24 juin 2026, 25-11.109

An employee was dismissed for economic reasons, on the grounds of the total cessation of business of the company in which he worked, on 30 October 2019, following the company’s liquidation ordered on the preceding 9 October. The employee challenged the termination of his employment contract and argued that his employer had failed to comply with its statutory redeployment obligation prior to implementing his dismissal for economic reasons. Indeed, a few months after his dismissal for economic reasons, his employer hired employees under fixed-term contracts without offering him redeployment to those positions. On appeal, the Court of Appeals held that the employer had not breached its obligation to reassign the employee, given that the omission was unintentional. The employee has filed an appeal before the supreme court against this decision.

The French supreme court dismissed the appeal. It recalled that it follows from Article L. 1233-4 of the Labor Code that the redeployment obligation covers only positions available within the company prior to the date of dismissal, at the time the dismissal is contemplated. In this case, the Court of Appeal had found that the hires relied upon by the employee had taken place in January 2020, i.e. several months after the dismissal notified on 30 October 2019 for cessation of business, with no evidence suggesting that the employer had intentionally excluded the employee from access to those positions at the time of termination.

From these findings, the French supreme court concluded that the use of short-term contracts intended to maintain business activity prior to the company’s permanent closure had not occurred immediately after the dismissal, such that those positions were not available at the time the dismissal was pronounced. The Court of Appeal was thus able to find that the employer had not failed to fulfill its redeployment obligation.

This decision falls within the continuity of settled case law: redeployment possibilities must be sought before notification of the dismissal; from the moment the dismissal is contemplated (see e.g. French Sup. Court, 4 May 2017, No. 16-14.779). The ruling is, moreover, not published in the Bulletin (i.e.: official newsletter listing the most important decisions). The decision is logical insofar as the employer itself does not necessarily know its future recruitment needs at the date, it notifies dismissals for economic reasons. This new example nonetheless illustrates the temporal scope of the redeployment obligation, particularly in cases where a company’s cessation of business is implemented progressively, as case law permits provided the cessation of business is definitive. For the purpose of organizing this cessation of business, the employer may therefore resort to precarious contracts after having notified the dismissals for economic reasons without breaching its redeployment obligation. In this scenario, however, the employer must ensure that the hires are lawful and comply with the requirements of Article L. 1242-5 of the Labor Code concerning prohibitions on hiring under fixed-term contracts following a dismissal for economic reasons.