Right to Notice and Redundancy Payment: the Date of Notification Is Decisive

Imagine: you are the owner of a small building in Mont-de-Marsan, and you have just dismissed your caretaker. You pay him a redundancy payment calculated according to the collective agreement in force on the day of his departure. But a month later, a new law increases this payment. Your former employee demands a top-up. Is he right? The answer is no, according to the Court of Cassation. This decision of 19 January 1994 sets a simple and essential rule: it is the date of notification of the dismissal that determines the employee's rights, not the date the notice period ends. A rule that secures employers and avoids financial surprises. But beware, exceptions exist. Let's delve into this case.

The facts: a story that happens every day

Mr X, an employee, is dismissed by his employer on 5 June 1986. He is entitled to three months' notice, but his employer dispenses him from serving it. On 2 June 1986, the parties sign a settlement agreement (an accord to settle the dispute definitively) which provides for the payment of notice pay, redundancy payment and holiday pay, calculated according to the provisions in force at that time. However, a few months later, a new collective agreement comes into force, offering more favourable terms for calculating these payments. Mr X then considers that he is entitled to a supplement. The case goes up to the Court of Cassation. The employee argues that the rights arise as the notice period is served, and that the new provisions should apply. The employer, on the other hand, maintains that everything is fixed at the date of notification of the dismissal. Did the settlement agreement of 2 June 1986 contain an express clause to the contrary? No. The debate is launched.

The reasoning of the court — dissected

The Court of Cassation, in its judgment of 19 January 1994, rules in favour of the employer. It lays down a fundamental principle: the right to notice and redundancy payment arises on the date the dismissal is notified. In other words, it is the law in force at that time that applies, and nothing that occurs during the notice period (even if the employee is dispensed from serving it) can modify this right, unless the law or collective agreement expressly so provides. In clear terms, legislative or contractual provisions that come into force after the notification of dismissal can neither increase nor reduce the rights already acquired. What few people know is that this rule applies even if the notice period is long (e.g., 6 months for a manager). The Court relies on Article L. 122-6 of the Labour Code (now Articles L. 1234-1 et seq.), which defines notice, and on the principle of non-retroactivity of laws. It rejects the idea that rights are acquired progressively. However, if the settlement agreement or employment contract contains an express clause providing for the application of future provisions, then the situation changes. But in the absence of such a clause, the employee cannot claim any more. The decision confirms consistent case law (see, for example, Cass. soc., 12 July 1989) and puts an end to uncertainty.

What this changes for you — concretely

For the employer: you are now secure. If you dismiss an employee today, you calculate his notice and redundancy payments based on the texts in force at the date of notification. Even if a more favourable new collective agreement comes into force during the notice period, you do not have to pay anything extra. Concrete example: in Mimizan, an employer dismisses a salesperson on 1 March 2024, with 3 months' notice. On 1 April, a new collective agreement increases the redundancy payment by 10%. No top-up to pay. But if you are in this situation, you must check your collective agreement: some contain catch-up clauses. For the employee: do not count on a law or agreement favourable to you coming into force after your notification. Your right is fixed. However, if your employer notifies you of dismissal just before a more protective text comes into force, you could challenge it if you can prove fraudulent intent (rare). For the landlord owner: this does not directly concern you, but if you employ a caretaker or concierge, the same rules apply. In Mont-de-Marsan, a landlord who dismissed his caretaker in February 2024 must apply the payments in force at that date, even if the collective agreement is renegotiated in April.

Four tips to avoid this type of dispute

• Notify the dismissal in writing with proof of receipt: keep the proof of the date of notification. This will be decisive. A simple email is not enough: prefer a registered letter or hand delivery with a signed receipt.
• Calculate the payments immediately: as soon as notification is given, prepare a precise breakdown of the employee's entitlements (notice, redundancy payment, holiday pay) on the basis of the texts in force at that date. Do not delay, as the texts may change.
• Check your collective agreement: some agreements contain clauses that index payments to future changes. If so, you may need to adjust. Seek legal advice to analyse your agreement.
• Draft a secure settlement agreement: if you sign a settlement agreement with the employee, state clearly that the payments are calculated according to the provisions in force at the date of notification, and that any subsequent modification will have no effect. Avoid ambiguous clauses.

Further reading: related case law and developments

This decision is part of a consistent line of authority. Already, a judgment of the Court of Cassation of 12 July 1989 (No. 86-44.123) had held that the employee's rights are determined at the date of dismissal. More recently, the social chamber reiterated this principle in a judgment of 10 May 2012 (No. 10-28.438): modification of the collective agreement during the notice period changes nothing. The courts are therefore strict: no retroactive effect unless expressly provided. Trend: the case law protects the legal certainty of employers, while reminding that the employee can negotiate a more favourable clause in his contract. For the future, if the legislature wishes a new law to apply to ongoing notice periods, it must say so explicitly. undefined employers can anticipate their costs without fear of surprises.

In practice: what to do

Checklist for the employer when dismissing:

1. Date of notification: send the dismissal letter by registered post with acknowledgement of receipt. Note the date on the letter.
2. Calculation of payments: use the collective agreement and the Labour Code in force at that date.
3. Notice period: if dispensed, pay the payment in lieu of notice calculated at the date of notification.
4. Possible settlement agreement: include a clause stating that the rights are fixed at the date of notification and that any subsequent modification is without effect.
5. Preservation of evidence: keep a copy of the notification, the texts in force at that date, and the breakdown.

If in doubt, consult a lawyer lawyer. A calculation error can be costly.

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