Dismissal for incapacity: procedure, reassignment and compensation

Dismissal for incapacity can only take place after an opinion from the occupational physician and, unless expressly provided for in that opinion, after a serious and fair search for reassignment.

The employer must follow a series of steps: analysis of the medical opinion, possible consultation with the occupational physician, search for a compatible position, consultation with the social and economic committee, informing the employee, then initiating the termination procedure.

An error in the scope of the redeployment, the consultation of the CSE, the respect of the one-month deadline or the drafting of the dismissal letter can expose the company to employment litigation.

What is unfitness for work?

Incapacity corresponds to the medically established impossibility for an employee to occupy their job, when no adjustment, adaptation or transformation of that job is possible.

It can be:

• of non-occupational origin, when it results from an illness or accident unrelated to work;
• of occupational origin, when it is the result of a work accident or an occupational disease.

This distinction is important because it has implications for the compensation owed to the employee, the applicable protection scheme, and the consequences of any potential breach by the employer.

Incapacity should not be confused with:

• a sick leave prescribed by the attending physician;
• a disability recognized by the Health Insurance;
• a permanent disability resulting from a work accident or occupational disease;
• professional inadequacy;
• a simple difficulty for the employee in performing their job.

Recognition of a disability by Social Security does not automatically render an employee unfit for work. Conversely, an occupational physician may declare an employee unfit for work even if no disability has been recognized.

Issues relating to work-related accidents, occupational diseases and disability also fall within our practice in social security law.

Who can declare an employee unfit for work?

Only the occupational physician can declare an employee unfit for their position.

Neither the attending physician, nor the medical advisor of the health insurance fund, nor the employer can replace him.

Before issuing their opinion, the occupational physician must, in particular:

• carry out at least one medical examination of the employee;
• to conduct or have conducted a study of the position;
• to carry out or have carried out a study of working conditions in the establishment;
• indicate the date on which the company profile was updated;
• to discuss with the employee and the employer the possibilities of adjustment, adaptation, transformation of the position or adjustment of working time.

A second medical examination may be arranged when deemed necessary. It must then take place within a maximum of fifteen days following the first examination.

The system for the notice of unfitness is defined by article L. 4624-4 of the Labour Code.

What should the notice of unfitness contain?

The notice of unfitness must include the written conclusions of the occupational physician as well as indications relating to the reassignment of the employee.

He can, in particular, specify:

• the employee's ability to perform certain tasks;
• the restrictions that must be respected;
• the possible arrangements;
• the possibility of holding a part-time position;
• the ability to undertake training designed to prepare the employee for a suitable position;
• the conditions under which a redeployment could be considered.

The employer must carefully read the entire notice, not just its conclusion.

If the proposed changes are unclear or difficult to reconcile with existing job requirements, it is recommended to consult the occupational physician in writing. The employer is obligated to consider the physician's proposals and, if they refuse to implement them, to explain the reasons to the employee and the occupational physician, in accordance with Article L. 4624-6 of the French Labor Code.

Can the unfitness notice be contested?

Both the employer and the employee may contest the medical elements justifying the opinion of unfitness, the proposals, the written conclusions or the indications issued by the occupational physician.

The appeal must be lodged with the labor court within fifteen days of notification of the notice.

The labor court rules according to the accelerated procedure on the merits and may entrust an investigative measure to the labor inspector physician.

Given the particularly short timeframe, the employer must analyze the notice as soon as it is received. The existence of an appeal should not lead to neglecting other procedural deadlines, especially those related to the resumption of salary payments.

A summary presentation of the procedure is also offered on the page dedicated to incapacity by Service-Public.fr.

Is the employer always required to seek redeployment?

In principle, yes.

When an employee is declared unfit to return to their job, the employer must seek another position suited to their abilities. This obligation applies to both non-occupational incapacity and incapacity resulting from a workplace accident or occupational disease.

For non-occupational incapacity, the obligation to reassign the employee stems in particular from Article L. 1226-2 of the French Labor Code. For occupational incapacity, it is stipulated in Article L. 1226-10.

Reassignment should be sought after notification of the unfitness for work notice. Steps taken before this notice may shed light on the situation, but they are not necessarily sufficient to establish that the legal obligation has been fulfilled.

What characteristics should the redeployment position have?

The proposed position should be as comparable as possible to the previously held job.

It must be:

• appropriate to the employee's capabilities;
• compatible with the conclusions of the occupational physician;
• actually available;
• sufficiently precise to allow the employee to make a decision;
• sought if necessary by transfer, arrangement, adaptation or transformation of an existing position;
• compatible, where appropriate, with an adjustment of working hours.

The employer is not obliged to create a position that is useless to the company, nor to impose a modification of another employee's contract in order to free up a job.

However, he must examine the possible adaptations in concrete terms. Simply consulting the list of vacant positions, without analyzing their potential transformation, may be insufficient.

Adaptation training may also be necessary when it allows the employee to take up an available position. However, the employer is not obligated to provide initial training leading to an entirely different job.

Within what scope should the redeployment be sought?

The search should first focus on all of the company's establishments.

When the company belongs to a group, it must also be extended to the group companies located in France whose organization, activities or place of operation allow the transfer of all or part of the staff.

The concept of a group is defined according to the rules of the Commercial Code, to which the Labor Code refers. The employer must therefore precisely identify the companies falling within the legal scope and not limit their search to the company employing the employee.

It is recommended to keep:

• requests addressed to the group's establishments or companies;
• their answers;
• personnel records;
• lists of available positions;
• job descriptions;
• the reasons why certain jobs were ruled out;
• exchanges with the occupational physician;
• the proposals addressed to the employee.

The burden of proof regarding the seriousness and fairness of the redeployment search rests with the employer.

In what cases is the employer exempt from redeployment?

The employer is exempt from seeking redeployment when the notice of unfitness expressly states that:

• "any continuation of the employee in a job would be seriously detrimental to his health";
• or "the employee's state of health prevents any reassignment to another job".

These legal formulations must be distinguished from a simple statement that the employee is "unsuitable for all positions in the company".

This last formula does not necessarily exempt the employer from conducting a search for redeployment, particularly when an adjustment, a transformation of position or a search within the group remains possible.

In the presence of a clearly worded legal exemption, the employer may initiate the dismissal procedure without searching for a suitable alternative position. However, they must verify that the exemption covers retention or reassignment to any position, and not just to the previously held position.

Should the Works Council be consulted?

When the employer is required to seek redeployment, the social and economic committee must be consulted before proposing a position to the employee.

This consultation is required in cases of both professional and non-professional incapacity, provided that the company has a CSE (Social and Economic Committee).

The committee must receive sufficient information to issue a useful opinion, including:

• the notice of unfitness;
• the conclusions of the occupational physician;
• the characteristics of the position previously held;
• the employee's restrictions and capabilities;
• the research carried out;
• the identified positions;
• the planned arrangements;
• the reasons why certain positions cannot be offered.

The opinion of the CSE is not binding on the employer, but the consultation must be genuine and take place at the appropriate time.

When the occupational physician has expressly exempted the employer from any search for redeployment by means of one of the two legal notices, consultation with the CSE is not required, since no search or proposal for redeployment must be made.

Can an employee refuse a redeployment position?

The employee remains free to refuse the position offered to him/her.

His refusal does not, in itself, constitute misconduct and should not lead to the dismissal being classified as disciplinary.

When the employer has fairly offered a job:

• appropriate to the employee's capabilities;
• as comparable as possible to the previous job;
• compatible with the recommendations of the occupational physician;
• and complying with the conditions stipulated by the Labour Code,

His obligation to find alternative employment is deemed to have been fulfilled.

This rule is specifically provided for in article L. 1226-12 of the Labour Code for occupational incapacity.

If the proposal does not meet the legal criteria or if other clearly compatible positions remain available, the employee's refusal does not automatically secure the dismissal.

When the proposed position entails a modification of the employment contract — reduction in remuneration, change of qualification, substantial modification of working hours or mobility exceeding contractual limits — the employee's agreement is essential.

When can dismissal for incapacity be pronounced?

The employer may initiate the dismissal procedure when they can justify:

• the impossibility of offering a job compatible with the employee's abilities;
• the refusal by the employee of a job offered under the legal conditions;
• or an express statement from the occupational physician exempting him from seeking redeployment.

When no redeployment can be offered, the employer must inform the employee, in writing, of the reasons preventing their redeployment.

This information must be provided before the termination procedure is initiated. It is not the same as the dismissal letter.

For an employee on a permanent contract, the employer must then follow the procedure for dismissal for personal reasons:

1. summon the employee to a preliminary interview;
2. respect the time frame between the summons and the interview;
3. hold the preliminary interview;
4. notify the dismissal within the legal time limits;
5. hand over the end-of-contract documents.

The dismissal letter must mention the incapacity and the reason preventing the continuation of the contract: impossibility of reassignment, refusal of a suitable proposal or express exemption resulting from the medical opinion.

The Social Law and Labour Law team at ARST Avocats assists employers in preparing and securing each of these steps.

What happens if the employee is neither reassigned nor dismissed within a month?

During the first month following the medical examination that led to the opinion of unfitness, the employer is not in principle required to pay the employee, except for more favorable contractual provisions or special circumstances.

On the other hand, if the employee is neither reassigned nor dismissed at the end of this one-month period, the employer must resume payment of the salary corresponding to the job previously held.

For non-occupational incapacity, this obligation is stipulated in Article L. 1226-4 of the French Labor Code. An equivalent obligation exists for occupational incapacity.

Resumption of salary payments is necessary even if:

• the employee does not provide any work;
• He was declared unfit for any employment;
• The search for redeployment continues;
• An appeal against the unfitness notice is pending;
• The dismissal procedure has been initiated, but is not yet complete.

The one-month period is not suspended by the summons to the preliminary interview. It is therefore essential to establish a timetable as soon as the notice of unfitness is received.

Is the employee required to give notice?

An employee dismissed for incapacity does not work a notice period. The contract ends on the date the dismissal is notified.

However, the financial consequences differ depending on the origin of the incapacity.

Incapacity of non-occupational origin

The employee receives, unless more favorable provisions are stipulated in a collective agreement:

• the statutory or contractual severance pay;
• the compensation in lieu of paid leave;
• wages and other sums remaining due upon termination.

He does not receive compensation in lieu of notice. However, the theoretical length of the notice period is taken into account when determining seniority for the calculation of statutory severance pay.

Occupational disability

When incapacity results from a work-related accident or occupational disease, the employee is entitled, subject to legal conditions:

• a special severance payment equal to twice the statutory severance payment, unless the contractual severance payment is more favourable;
• of compensation equal to the notice period compensation;
• of the compensation in lieu of paid leave;
• of the other amounts remaining due.

This system is notably provided for by article L. 1226-14 of the Labour Code.

The classification of occupational incapacity does not depend solely on the decision of the health insurance fund. The protective scheme may apply when the incapacity has, at least partially, an occupational origin and the employer was aware of this origin at the time of dismissal.

A precise analysis of the medical file known to the employer, sick leave, accident or occupational disease declarations and exchanges with the employee is therefore necessary before establishing the final settlement.

The Service-Public.fr fact sheet on dismissal compensation for incapacity also presents the main differences between occupational and non-occupational incapacity.

What are the consequences of an irregular procedure?

The consequences depend on the specific breach observed.

A dismissal may be deemed to be without real and serious cause when the employer:

• did not conduct a serious search for redeployment opportunities;
• wrongly limited the scope of his research;
• did not take into account the recommendations of the occupational physician;
• did not consult the CSE even though this consultation was mandatory;
• offered a clearly incompatible position;
• cannot demonstrate the steps taken.

When the incapacity is of occupational origin, failure to comply with the rules of reassignment may result in the application of the specific compensation scheme provided for by the Labour Code.

Dismissal may also be invalid when the incapacity results from unlawful acts, in particular moral harassment or discrimination.

Finally, when the incapacity originates from a prior breach by the employer of its safety obligation, the employee may initiate separate action for compensation for the harm suffered, without any breach of the safety obligation automatically rendering the dismissal void.

Can incapacity allow for the early termination of a fixed-term contract?

Unfitness for work as determined by the occupational physician may justify the early termination of a fixed-term contract when no reassignment is possible.

The employer must then:

• analyze the unfitness notice;
• seek a reassignment, unless expressly exempted;
• consult the CSE when this consultation is required;
• inform the employee of the reasons preventing reassignment;
• respect the one-month period relating to the resumption of salary;
• clearly notify the early termination of the fixed-term contract.

The early termination of a fixed-term contract due to incapacity is not a dismissal. Therefore, the dismissal procedure for personal reasons, and in particular the preliminary interview, does not apply.

The compensation due varies depending on whether the incapacity is work-related or not.

The twelve checks to be carried out before dismissal for incapacity

Before notifying the termination, the employer must verify:

1. the date and apparent regularity of the notice of unfitness;
2. the possible expiry of the fifteen-day period for contesting the decision;
3. the occupational or non-occupational origin of the incapacity;
4. the capabilities, restrictions and recommendations of the occupational physician;
5. the existence of an express exemption from redeployment;
6. the exact scope of the research within the company and the group;
7. the possibilities for adjustments, adaptations or transformations of positions;
8. consultation with the CSE when it is mandatory;
9. the conformity and accuracy of the proposals addressed to the employee;
10. evidence of research and exchanges with the occupational physician;
11. written notification to the employee in the event of impossibility of reassignment;
12. respecting the one-month deadline and the exact calculation of compensation.

ARST Avocats' support

Dismissal for incapacity presents a significant risk of litigation, particularly when the search for redeployment, the scope of the group, consultation with the CSE or the professional origin of the incapacity are discussed.

Our team supports employers in:

• analyze the opinion of the occupational physician;
• determine the scope of redeployment;
• usefully question the companies in the group;
• prepare for the consultation of the CSE;
• draft the redeployment proposals;
• to assess the consequences of an employee's refusal;
• organize the dismissal procedure;
• calculate the compensation;
• to provide evidence of the steps taken;
• to defend the company before the labor court.

This support combines, when necessary, the firm's expertise in social law and labor law and in social security law.

Article written by Chaouki Gaddada, partner lawyer specializing in social law.

Frequently asked questions about dismissal for incapacity

Can the employer dismiss an employee immediately after the notice of unfitness?

Only if the notice includes one of the legal clauses expressly exempting the employer from any redeployment search. In other cases, the employer must search for a compatible position and consult the Works Council before making any proposal.

Can incapacity be declared by the attending physician?

No. Only the occupational physician can issue a statement of unfitness for the job.

How much time does the employer have to dismiss the employee?

No maximum time limit formally mandates dismissal. However, one month after the examination that led to the finding of unfitness, the employer must resume paying the employee's salary if the employee is neither reassigned nor dismissed.

Can an employee refuse their reassignment?

Yes. Refusal is not, in itself, misconduct. However, it can allow the employer to initiate termination proceedings when the offer met the legal requirements.

Does the Works Council always have to be consulted?

The Works Council (CSE) must be consulted when a search for redeployment is mandatory. This consultation is not required when the occupational physician's opinion expressly exempts the employer from any redeployment search.

Does dismissal for incapacity entitle one to unemployment benefits?

Yes. Subject to meeting the general conditions for compensation, an employee dismissed for incapacity may be eligible for the back-to-work allowance.

If you are facing a dismissal issue due to incapacity, please contact us.