Employers are relieved! One of the most talked-about provisions of the Macron ordinances has been confirmed as valid by the French Court of Cassation (Supreme Court). The cap on compensation for unfair dismissal, which was contested by several industrial tribunals, was confirmed as consistent with international texts ratified by France.

Since the ordinances reforming the Labour Code at the end of 2017, the cap has been set between one and twenty months’ gross salary, depending on seniority. Previously, judges were free to set the amounts which made tribunal litigation an uncertain business for both employers and employees. The “new” rules, now confirmed as binding, allow both sides a much greater ability to assess the commercial merits of particular causes of action and settlement offers made or received. There was also a six-month salary minimum for employees with more than two years’ service in a company with more than ten employees which has now been discontinued.