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French Supreme Court Rules Unfairly Dismissed Employees Entitled to Damages for Lost Opportunity to Benefit From a Defined-Benefit Pension

by Jilali Maazouz and Sébastien Le Coeur Background In 2004, the Fédération Nationale du Crédit Agricole (FNCA) hired Mr. Rossi as one of its senior managers. Mr Rossi. was entitled to a defined-benefit pension, provided he was still employed by FNCA upon retirement. In 2006, FNCA dismissed Mr. Rossi for poor performance.  The Paris Court of Appeals held his dismissal unfair, but refused to award him damages for the lost opportunity to receive a defined-benefit pension. Mr. Rossi appealed to the Cour de Cassation, the French Supreme Court. Decision The French Supreme Court upheld the condition that the employee must still be employed by the company upon retirement in order to benefit from a pension. On this basis, Mr. Rossi’s claim to a pension was dismissed. However, the French Supreme Court held that, where the dismissal is found to be unfair, the employee sustains a loss caused by the lost opportunity to remain employed until retirement and benefit from a...

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French Supreme Court Rule For Change Of Control Clause In Management Employment Contracts

by Jilali Maazouz and Sébastien Le Coeur As of 26 January 2011, the French Supreme Court ruled that the change of control clauses in French executive-level employment contracts are valid, a consideration which international companies contemplating the acquisition of a company in the country need to consider.  The control clause is also valid for both public and private companies. In July 2005, further to the termination of several of Havas’s officers, one of the top managers decided to leave the company by claiming constructive dismissal under her change of control clause.  A McDermott employment lawyer in Paris advised on the drafting of this landmark control clause upheld by the French Supreme Court. This change of control clause within the Havas executive’s contract was as follows: The identities of the top managers were key reasons as to why the employee entered into her/his employment contract. Should one or several of these...

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The French Supreme Court Decides that Employees with Jobs at Risk Take Precedence

by Jilali Maazouz and Sébastien Le Coeur Under French law, an employee can only be dismissed on economic grounds when all efforts have been well documented to redeploy him or her in an alternative position within a company. On 7 April 2004, the French Supreme Court concluded that an employee facing economic dismissal has priority over an external candidate to fill a position available in the company.  On 23 March 2011, the French Supreme Court went even further and ruled that an internal vacancy within a company in France should be offered as a priority to the in-house employee who is at risk of redundancy. This recent Supreme Court ruling extends the obligations of French entities or international entities operating in France contemplating redundancies.  As a result, should an employer decide to offer a position to an employee who is not at risk of redundancy, he or she will be liable to pay damages to the employees who are eventually made...

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