In the event of cessation of activity, the collective bargaining agreement does not apply.

A collective bargaining agreement (rupture conventionnelle collective - RCC) cannot be implemented, let alone validated, when a company ceases all or part of its activity and dismisses employees who refuse the agreement for economic reasons. This was reiterated by the Conseil d'Etat in a ruling handed down on March 21, 2023.

Conditions for implementing the Collective Bargaining Agreement

All companies are entitled to enter into a collective bargaining agreement, regardless of their size or the number of terminations planned. This method of collective termination of employment contracts is based on voluntary redundancies, to the exclusion of any economic lay-offs.

The agreement sets out the framework for the termination of the employment contract of employees volunteering to leave. In accordance with articles L 1237-19 et seq. of the French Labor Code, it specifies in particular:

  • the terms and conditions for informing the Social and Economic Committee (CSE),
  • the maximum number of departures envisaged,
  • outplacement measures,
  • and how severance pay is calculated.

To apply for a collective agreement, companies must go to the RUPCO portal and attach the documents relating to their project. The relevant DREETS-DDETS will then check that the file is complete, before issuing its validation decision within 15 days.

Contractual severance not applicable in the event of cessation of activity

In a ruling handed down on March 21, the French Conseil d'Etat confirms thata collective bargaining agreement cannot be set up when the company has definitely ceased all or part of its activity, resulting in the redundancy of employees who did not opt for the agreement.

In this case, a regional director of companies, competition, consumption, labor and employment (now DREETS) had validated a collective agreement for the termination of a contract within a company that was planning to reorganize its printing activities in France, and as such close a production site. An information memo sent by the company to its CSE mentioned that, should more than 10 employees refuse the modification of their employment contract, a draft job protection plan would be envisaged.

The Force Ouvrière trade union challenged the DREES decision to validate the collective bargaining agreement. The Conseil d'Etat confirmed the administrative court's decision, specifying that such an agreement must not give rise to redundancies. Employees must be able to keep their jobs.

Thus, if the partial or total cessation of a company's activity leads to the redundancy of its employees who have not opted for the collective bargaining agreement, the agreement cannot be validated by DREES.