OD FLASH | Redundancy of a protected employee: the court cannot dismiss the threat to competitiveness without examining the foreseeable decline in the industry

Council of State, Joint Session of the 4th and 1st Chambers, February 11, 2026, 497016 – Légifrance

A company specializing in the design and marketing of educational materials for driver training had sought authorization to dismiss a protected employee for economic reasons. The labor inspector had authorized this dismissal, a decision upheld by the Minister of Labor following an appeal through the administrative hierarchy.

The employee had filed a complaint with the Nantes Administrative Court seeking to have these decisions overturned, but her request was denied. The Nantes Administrative Court of Appeal, however, overturned this judgment as well as the administrative decisions, finding that there was no threat to the company’s competitiveness.

The company appealed to the Council of State.

The Council of State reiterates that, in cases of economic dismissal of a protected employee, the labor inspector must verify whether the company’s situation justifies the proposed dismissal, particularly with regard to:

§ the necessity of workforce reductions,

§ and the possibilities for redeployment within the company or within the group.

With regard more specifically to the reorganization necessary to safeguard competitiveness, the Council of State specifies that the threat to the company’s competitiveness must be assessed at the level of the sector of activity to which the company belongs within the group.

It adds that this threat may result not only from a foreseeable deterioration in the company’s competitive position, but also from a foreseeable deterioration in the sector of activity in which it operates.

By relying solely on the absence of a foreseeable deterioration in the company’s competitive position, without examining the foreseeable deterioration of the regulatory educational publishing sector, the Administrative Court of Appeal therefore committed an error of law.

The Council of State consequently overturns the judgment of the Administrative Court of Appeal.

This ruling serves as a reminder that, in assessing the economic justification based on safeguarding competitiveness, the administrative authority and the court must take into account not only the company’s specific situation but also the foreseeable evolution of the relevant industry.