The application of the recent scale of compensation for unfair dismissal by the labour courts

The principle: The new article L1235-3 of the Labour Code, based on the Macron Ordinance of 22 September 2017, introduces a scale concerning the compensation due by the employer in the event of dismissal without real and serious cause. From now on, the maximum the employee will be able to receive is 20 months' salary for at least 30 years' seniority.

In practice: On the one hand, the Troyes Labour Court ruled on 13 December last year (Cons. Prud'h. Troyes 13-12-2018 No. 18/00036) that this scale was not in conformity with the European Social Charter and the ILO Convention to prevent its application. On the one hand, he argues that this scale does not deter employers who wish to get rid of a cumbersome employee.

On the other hand, it globalizes the situation of dismissed employees without any real and serious reason and does not make it possible to compensate fairly for the damage suffered individually.

The Troyes Labour Court therefore awarded compensation of 9 months' salary, whereas the application of the scale would have allowed her to obtain 3 months' salary given her low seniority. Amiens and Lyon followed the reasoning of the Troyes Labour Court in its decisions of 19 and 21 December 2018.

However, in September 2018, the Le Mans Labour Court ruled that this scale could be applied unless "in the event of a particularly serious breach by the employer" (Cons. prud'h. Le Mans 26-9-2018 n° 17/00538). A real legal uncertainty has arisen for employers, while the purpose of these orders was to facilitate the fluidity of the labour market.

To be continued.......

Overtime: employer authorization and workload

The mere fact that the employer has not given his explicit or implicit consent to the performance of overtime cannot be sufficient to exempt him from the payment of overtime worked by his employee.

Indeed, the Court of Cassation considers that if an employee works overtime because of the amount of work imposed by his employer, these overtime hours must be paid by the employer.

Court of Cassation, Social Chamber, 14 November 2018, No. 17-20.659

The new definition of abuse of rights: its impact on the transmission of property

The notion of abuse of rights was broadened by the 2019 Finance Act. Previously, only transactions with an exclusively tax purpose were concerned, i.e. the sole purpose of the transaction was to reduce or evade tax. The 2019 Finance Act now includes operations that have a mainly tax purpose. This nuance is particularly important in the case of the transfer of assets (donations for example), because even if the main objective remains the transfer to his descendants, there is a tax dimension since in the case of a reserve of usufruct, upon the death of the usufructuary, the bare owner automatically becomes the owner of the property without paying any additional fees. The tax administration wishes to facilitate its controls and avoid fictitious transmissions aimed at evading tax. It is not a question for the administration to prevent the mechanisms for the transmission of assets but to limit their abuse and to eliminate certain niches. For example, a person who gives bare ownership of his property to his child only a few months before his death and knowing that he is ill would be a new case of abuse of rights because the only purpose would be to avoid inheritance tax. The administration could consider this donation as fictitious. It will have been understood that the purpose of the reworking of this old concept in legal language is to allow for better control by the tax administration.

Withholding tax for French tax residents who work in Monaco or who receive unemployment benefits after being employed there

The tax administration has provided that the withholding tax may be implemented either by the payment of a down payment or by a direct withholding tax depending on the taxpayer's type of income.