- April 22, 2019
- Posted by: Editorial
- Category: Legal representatives
Unfair dismissals within French companies
In theory, in France, shareholders are free to fire the manager of a company whenever they want. However, certain laws do protect managers to prevent them from being unfairly dismissed. But how exactly does it work?
The principle of dismissal based on reasonable ground
As mentioned earlier, shareholders can fire a manager at a moment’s notice. However, in truth, a manager can only be dismissed based on “reasonable ground”. Technically, they don’t have to give their reason for firing the manager, but then, the manager will be free to sue them and demand damages.
The same goes if the manager considers that the reason they gave was flawed; the only difference being that it will then be up to the judge to decide.
The unfair dismissal
Even then, dismissal that is not based on reasonable ground is not “unfair dismissal”. Indeed, unfair dismissal has nothing to do with the motive; instead, it has to do with the circumstances during which the manager is fired.
As such, a dismissal is unfair if:
- The circumstances make this dismissal harm the manager’s honor or reputation. This can happen if the dismissal is broadcasted to all employees, if the manage is insulted, etc.
- The dismissal comes too quickly, is too sudden, and the manager can’t defend himself as a result. Indeed, for a dismissal to be fair, the manager has to know what is going on ahead of time, he has to be able to defend himself at the General Meeting, and his replacement must not have been decided yet.
In these cases, no matter why the manager is fired, he can still sue the company for unfair dismissal.
What compensation can the manager receive?
The manager will receive damages based on “the prejudice he is victim of”. As you can see, the definition is a little vague, and the damages are thus defined on a case-by-case basis.
Although, it is worth mentioning that in principle, the company is the one who pays damages to the manager. That is, unless a few shareholders are responsible, in which case they become personally liable.