Severance pay: impact of gross misconduct during the notice period

 « If the right to severance pay arises on the date the dismissal is notified, the assessment of the amount of compensation is made taking into account seniority at the expiry of the contract .

It follows that the Court of Appeal, which finds that the serious misconduct committed during the execution of his notice period by the employee, who was not exempt from it, had the effect of interrupting the notice period, rightly decides to take this interruption into account when determining the amount of the severance pay . »

Court of Cassation, Social Chamber, September 11, 2019, No. 18-12.606, published in the bulletin

An employee, who had three years of seniority with the company, was dismissed for professional incompetence and was required to work a six-month contractual notice period. Her employment contract ended during her notice period, as her employer notified her of its early termination for serious misconduct.

When establishing the final settlement, the employer calculates the amount of the severance pay, taking into account seniority expiring on the date of early termination of the notice period.

The employee contested the amount of the severance pay which was calculated on the basis of this seniority, considering that said severance pay should have been calculated on the date of expiry of the normal period of her contractual notice.

In a judgment dated September 11, 2019, the social chamber of the Court of Cassation upheld the judgment of the Court of Appeal of Basse-Terre which rejected the employee's claim.

In this judgment of September 11, 2019, the Court of Cassation held that the amount of severance pay due to the employee must be calculated by taking into account seniority assessed at the expiry of the employment contract, that is to say, at the date of early termination of her notice period.

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As a reminder, any employee with a permanent employment contract and at least 8 months' seniority is entitled to severance pay, regardless of whether they are entitled to and work their notice period [1].

However, seniority at the time of termination of the contract, taken into account to open the right to severance pay, should not be confused with seniority at the time of expiry of the contract, taken into account for the calculation of said severance pay.

Indeed, severance pay is calculated based on the seniority acquired by the employee on the date of termination of their employment contract, including notice period, whether or not it is served.

In other words, if the dismissed employee received or should have received notice, the duration of that notice period must be taken into account when calculating the severance pay.

However, in the situation where the notice period is interrupted by the employer through early termination for serious misconduct, the employee's seniority should be assessed on the date of the early termination, since it is on this date that the employee's contract ends.

This is what the social chamber of the Court of Cassation has just reiterated in this ruling.

[1] Article L.1234-9 of the French Labour Code, as amended by Ordinance No. 2017-1387 of 22 September 2017 (known as the Macron Ordinance)

The impact of gross misconduct during the notice period.PDF