Employment of a foreign worker without a permit: when the employer is not liable

Imagine the scene: an employer in Capbreton, a small restaurant owner by the beach, learns that his chef, a Moroccan national, no longer has a valid residence permit. What to do? Keep him? Dismiss him? And above all, must he pay him a notice period indemnity? This is exactly the question that the Court of Cassation had to decide in a decision of 3 April 2019 (No. 17-17.106). A question that may seem technical, but affects hundreds of employers and foreign employees on the Côte d'Azur and in the Landes.

In short, the high court upheld the position of an employer who had immediately initiated dismissal proceedings as soon as the employee informed him of the loss of his work authorisation. Result: no notice period indemnity, no manifestly unlawful disturbance. But what does this actually change for you, the owner of a business or property employing staff?

This decision is a real textbook case for all those who employ foreign workers. It reminds us that the right to indemnity is not automatic: it all depends on the employer's responsiveness. So, how should you react if you find yourself in this situation? Let's break down this case together.

The facts: a story that happens every day

Mr X owns a hotel-restaurant in Mont-de-Marsan. He hires a Moroccan national, Mr Y, as a chef. Everything goes well until the day Mr Y tells his employer that he no longer has a valid work authorisation. Immediately, Mr X initiates dismissal proceedings. But the employee contests: he claims a compensatory notice period indemnity (the money he would have received during the notice period, i.e. the time between the announcement of the dismissal and the actual end of the contract). According to him, the employer should have paid him this sum, even if he could no longer work due to the lack of a permit.

The case comes before the judge in chambers of the employment tribunal. The judge notes that Mr X acted without delay: as soon as he became aware of the situation, he started proceedings. Consequently, he finds that there is no manifestly unlawful disturbance (an obvious violation of the law) and refuses to grant the indemnity. The employee appeals, but the Court of Appeal confirms. He then appeals to the Court of Cassation.

Before the Court of Cassation, the employee argues that Article L. 8252-2, 2° of the Labour Code obliges the employer to pay the notice period indemnity, even in the event of impossibility of performing the notice. But the Court rejects his argument: since the employer dismissed immediately, the article does not apply. In other words, the right to indemnity only exists if the employer allows the employee to work without a permit or does not regularise his situation. By dismissing promptly, Mr X complied.

The court's reasoning — broken down

To understand the reasoning, we must look at two texts. First, Article L. 8252-2 of the Labour Code, which provides that in the event of employment of a foreigner without authorisation, the employer must in particular pay the employee a lump-sum indemnity representing at least six months' salary, as well as notice period and paid leave. But this article has an exception: its 2° states that these obligations do not apply if the employer dismissed the employee immediately upon learning of the situation. Second, Article L. 1234-5 of the same code, which provides that an employee who does not perform his notice period is entitled to a compensatory indemnity, unless he has committed gross misconduct. Here, the employee could not perform the notice period because he no longer had a residence permit. But the Court of Cassation considered that this impossibility is not attributable to the employer, since the employee himself informed him of the loss of the permit.

The judges therefore held that, since the employer had reacted promptly, there was no manifestly unlawful disturbance. The judge in chambers, whose role is to decide urgent and obvious cases, could not order payment of the indemnity. The case had to be referred to the trial judge for a more in-depth analysis.

What few people know is that this decision is part of a consistent line of case law from the Court of Cassation. It confirms that the good faith employer is not punished. But beware: if the employer had delayed, or if he had hired knowingly, the outcome would have been different. undefined, I have come across cases where the employer waited several weeks before dismissing, which resulted in him having to pay the full indemnities.

What this changes for you — concretely

If you are an employer (for example, a landlord who hires a caretaker, or a campsite manager in Capbreton), this decision is reassuring: it protects you if you act quickly. Concretely, as soon as an employee informs you that he no longer has a residence permit or work authorisation, you must immediately initiate dismissal proceedings. Do not delay, because every day that passes exposes you to having to pay the notice period and the six months' lump-sum indemnity.

For a foreign employee, this decision means that you cannot claim the notice period indemnity if you are the source of the information and the employer reacts without delay. However, if the employer knew or should have known that your permit was invalid (for example, if he did not ask you for proof), you can still contest.

Let's take a numerical example: a chef paid €2,000 per month in Mont-de-Marsan. If the employer dismisses on the same day as the information, he will have nothing to pay in respect of notice period (i.e. 1 to 2 months' salary, depending on seniority). On the other hand, if he waits a week, the judge could consider that he did not act immediately and order him to pay the six-month lump-sum indemnity, i.e. €12,000. The difference is enormous.

For property owners who employ domestic staff, the same rule applies. Be vigilant when hiring: always ask for a copy of the residence permit and work authorisation, and check their validity with the prefecture.

Four tips to avoid this type of dispute

• Systematically check permits: At the time of hiring, ask for a copy of the residence permit and work authorisation. Keep them in the employee's file. For non-EU foreign workers, the work authorisation is often separate from the residence permit.
• React immediately in case of alert: As soon as you have a doubt or the employee informs you of a change, initiate dismissal proceedings without delay. A single day's delay can cost you dearly.
• Document each step: Keep a written record of the information given by the employee (email, registered letter). This will prove your responsiveness in the event of a dispute.
• Consult a specialised lawyer: Before dismissing, seek advice. A lawyer specialising in labour law and immigration law will help you follow procedures and avoid pitfalls.

Besoin d'un conseil personnalisé ? Contactez Maître Zakine — première consultation 30 min à 45€.

Further reading: related case law and developments

This 2019 decision is part of a consistent line. Already in 2015, the Court of Cassation had ruled (No. 14-10.413) that an employer who immediately dismisses an employee without a permit is not required to pay the notice period indemnity. It reaffirmed this principle in several subsequent decisions. The trend is therefore protective for the good faith employer.

However, a recent decision of the Court of Justice of the European Union (CJEU, 2022) recalled that sanctions against the employment of foreigners without permits must be effective and dissuasive. This could lead to a tightening of French case law if the employer is considered negligent. For example, if the employer did not check the permit at the time of hiring, he could be held liable even if he subsequently dismisses quickly.

In the future, courts may require proactive verification by the employer, not just a reaction to the employee's information. So stay vigilant.

What you absolutely must remember

FAQ:

1. Can I dismiss a foreign employee who loses his residence permit?
Yes, you should even do so immediately to avoid penalties.

2. Do I have to pay him a notice period indemnity?
No, if you dismiss as soon as you learn of the situation. Otherwise, yes.

3. What if the employee does not inform me of the loss of his permit?
You must regularly check the validity of permits. If you discover the situation late, the risk is higher.

4. What are the risks if I do not dismiss?
You risk an administrative fine (up to €15,000) and the obligation to pay the lump-sum indemnity of six months' salary.

5. Can I hire a foreigner without a permit while waiting for regularisation?
No, this is prohibited. You must wait for the authorisation to be obtained.

Conclusion

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →