OD Flash | Refusal of a change in working conditions: the employee responsible for not performing his notice period is deprived of his indemnity in lieu of notice

French Supreme Court, October 23, 2024, no. 22-22.917

As a general rule, if an employee cannot serve his notice period, he is entitled to an indemnity in lieu of notice, unless he has been dismissed for gross misconduct. This indemnity comes in addition to the dismissal indemnity and any potential unfair dismissal indemnity. Nevertheless, in this decision, the French Supreme Court (Cour de cassation) points out that even in the absence of gross misconduct, an employee may sometimes be deprived of the indemnity in lieu of notice, especially when he is responsible for its non-performance.

In this case, an employer had informed an employee that his work location would be changed as of the following month. The employee challenged this decision, arguing that it constituted a modification of his employment contract without his consent. The employee therefore refused to attend his new work location, and his employer dismissed him for gross misconduct.

The employee challenged his dismissal before the French Labor Court and then before the Versailles Court of Appeal. The latter ruled that this was not a modification of the contractual framework, but a change in working conditions which did not require the employee’s agreement, stating that in the absence of a specific provision defining the employee’s exclusive work location, “the change of location within the same geographical area constitutes a simple change in working conditions falling within the employer’s power of direction”. Consequently, the employee had no legitimate reason for refusing to go to his new work location. However, the Court of Appeal overturned the Labor Court’s decision regarding the qualification of gross misconduct, ruling that this dismissal was still for “Cause” which should result in the payment of damages to the employee in the form of an indemnity in lieu of notice and dismissal indemnity.

The employer then lodged an appeal with the French Supreme Court, arguing that an employee’s refusal to continue to perform his employment contract due to a simple change in working conditions decided by the employer exercising its power of direction made the employee liable for not performing his notice period, and deprived him of indemnity in lieu of notice and related paid leave.

Under the aegis of Art. L.1234-1 and L.1234-5 of the French Labor Code, the French Supreme Court ruled that the employee’s refusal to change his work place was “blameworthy, even if it did not in itself constitute a breach of his obligations of such importance as to make it immediately impossible for him to remain with the company”. Thus, although the dismissal was not justified by gross misconduct, the employee was deemed “responsible for the non-performance of the notice period, which he refused to carry out under the new conditions”. The Court thus validated the employer’s rationale, which meant that he was not required to pay indemnity in lieu of notice.

With this decision, the French Supreme Court confirms a previously established case law regarding employees refusing to accept a change in their work place decided by the employer in the exercise of its power of direction (French Supreme Court, Apr. 4, 2006, no. 04-43.506; March 31, 2016, no. 14-19.711). Furthermore, this decision provides a much-needed reminder of both the consequences of the employer’s power of direction and the limits of an employee’s refusal to accept a change to his working conditions. In principle, the employer’s power of direction allows unilateral changes to be imposed on the employee. By way of exception, the employee may refuse such changes for a legitimate reason, such as excessive infringement of his rights.

Prevention rather than cure: employers are thus always encouraged to carry out a rigorous analysis of the employee’s situation before taking any action.