The Employment Protection Plan (PSE) tested by the "Climate" and "Florange" laws
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In a judgement of 2 May 2022, the Montreuil Administrative Court considered that in the context of an Employment Protection Plan (PSE), the Social and Economic Committee (CSE) did not have to benefit from the new consultation provided for by the "Climate" law on the environmental consequences of the reorganisation project. The Montreuil judges also ruled that the Employment Protection Plan (PSE) could validly contain support measures for employees who would be transferred to the site's buyer under the "Florange" law, even though the takeover had not yet been completed on the day it was approved.
Montreuil Administrative Court, 5th Chamber, 2 May 2022, No. 2202445.
In this case, the employer had started, in June 2021, an information and consultation procedure with its CSE on the project to definitively cease activity at the site and to make the 150 employees working there redundant for economic reasons.
An Employment Protection Plan has been drawn up and the CSE has been regularly informed of the steps taken by the company to find a buyer for the site in application of the so-called "Florange" law.
At the end of the information and consultation procedure with the CSE, no buyer had made a firm offer to take over the site but the company had received a serious expression of interest. The company therefore included in the PSE measures to support employees who would be transferred to the buyer, even though the takeover project had not yet been completed on the day the request for approval of the PSE was submitted.
The DRIEETS of Ile-de-France, to which the PSE was submitted, approved it by decision of 20 December 2021.
It is this decision that was challenged by the CSE before the Montreuil Administrative Court on the basis of numerous arguments, all of which were rejected by the administrative judges. The decision rendered on 2 May 2022 is particularly interesting concerning two questions that were put to the Administrative Court: the conformity of the PSE with the "Climate" law and the "Florange" law.
1. Compliance of the PSE with the "Climate" law: must the consultation of the Economic and Social Committee include an environmental component?
The law of 22 August 2021, known as the "Climate" law, provides for an obligation to inform and consult the CSE on the environmental consequences of the employer's projects as part of the consultations provided for in Article L.2312-8, II of the Labour Code. This article covers the issues relating to the organisation, management and general running of the company.
When the "Climate" law came into force, there was considerable disagreement as to whether the employer should also consult the CSE on the environmental consequences as part of other consultations, in particular in the case of restructuring projects, staff cuts and collective redundancies for economic reasons, mergers, public takeover bids and collective proceedings.
Indeed, the articles governing this type of operation and in particular Article L.2312-37 of the Labour Code, which applies to restructuring projects and collective redundancies for economic reasons, have not been modified by the "Climate" law.
According to some of the doctrine, since consultations other than those under Article L.2312-8, II of the Labour Code are not mentioned in the Climate Act, the CSE did not have to be consulted on the environmental consequences.
For other authors, Article L.2312-37 of the Labour Code simply specifies Article L.2312-8, II: restructuring, downsizing and collective redundancies for economic reasons are measures likely to affect the volume and structure of the workforce; mergers and takeover bids are changes in the legal organisation of the company; collective procedures are both, and must therefore be treated in the same way.
This was the view of the CSE.
The employer argued that the environmental consultation did not have to be organised in the case of a PSE. He added that the "Climate" law had come into force after the opening of the information and consultation procedure of the CSE and therefore did not apply in this case. In any event, it stated that it had provided the CSE with information on the environmental aspect of the project and that the CSE had specifically addressed the environmental issue when giving its opinion.
The Montreuil Administrative Court ruled in favour of the employer, considering that the CSE did not have to benefit from the new consultation provided for by the "Climate" law on the environmental consequences of the proposed collective redundancy for economic reasons insofar as Articles L.1233-61 to L.1233-64 of the Labour Code had not been amended.
This is one of the first decisions of the judges of the court of first instance on the question of the scope of application of the environmental consultation instituted by the Climate Law. To the best of our knowledge, no appeal decision has yet been handed down on this matter.
2. Compliance of the PSE with the "Florange" law: can the PSE provide for measures to accompany a takeover that has not yet been completed on the day of its approval?
Older than the "Climate" law, the "Florange" law of 29 March 2014 and in particular articles L.1233-57-9 et seq. of the Labour Code require an employer who plans to cease its activity to look for a buyer when it belongs to a group or company with at least 1000 employees.
There is no provision in this law that requires the employer to include in its PSE social measures to support employees whose employment contracts are transferred to the buyer of the site.
In this case, the employer had gone beyond its legal obligations and had provided in the PSE for accompanying measures in the context of a potential takeover project, since a buyer had shown a real interest in taking over the site and its staff.
The CSE criticised the administration for having taken these measures into consideration because they were only hypothetical. It therefore requested the annulment of the decision to approve the PSE on this basis.
The employer indicated that the measures presented in the PSE were concrete and precise. It recalled that the "Florange" law does not require a buyer to be found before the end of the information and consultation procedure on the project for definitive cessation of activity and economic redundancy. In the vast majority of cases, the time required to formalise a site takeover project is much longer than that required to draw up a PSE. The employer therefore argued that forcing it to finalise the takeover at the time the PSE was submitted to the administration would mean forcing it to refuse all takeover offers made after the opinion of the CSE and thus betraying the meaning of the 'Florange' law.
The Montreuil Administrative Court agreed: the fact that the measures relating to the potential takeover of the employees had been included was not such as to have distorted the assessment made by the DRIEETS on the possibilities of redeployment, and the DRIEETS had not misunderstood the possible nature of the measures conditional on the outcome of the firm takeover bid.
Here again, the Montreuil Court's decision is unprecedented: to our knowledge, no decision had yet ruled on the question of whether the PSE could include measures relating to a potential takeover. However, it is a logical decision given the spirit of the Florange law, which is to encourage the employer to really invest in the search for a buyer. A decision that would have sanctioned the employer for not having been able to finalise its takeover project at the time of filing its PSE would have been a total deterrent and would have run counter to the aim of the text.
The judgement rendered by the Montreuil Court thus opens up a number of issues and it goes without saying that future decisions on these topics are highly anticipated.
Article published in ActuEL RH
Montreuil Administrative Court, 5th Chamber, 2 May 2022, No. 2202445.
In this case, the employer had started, in June 2021, an information and consultation procedure with its CSE on the project to definitively cease activity at the site and to make the 150 employees working there redundant for economic reasons.
An Employment Protection Plan has been drawn up and the CSE has been regularly informed of the steps taken by the company to find a buyer for the site in application of the so-called "Florange" law.
At the end of the information and consultation procedure with the CSE, no buyer had made a firm offer to take over the site but the company had received a serious expression of interest. The company therefore included in the PSE measures to support employees who would be transferred to the buyer, even though the takeover project had not yet been completed on the day the request for approval of the PSE was submitted.
The DRIEETS of Ile-de-France, to which the PSE was submitted, approved it by decision of 20 December 2021.
It is this decision that was challenged by the CSE before the Montreuil Administrative Court on the basis of numerous arguments, all of which were rejected by the administrative judges. The decision rendered on 2 May 2022 is particularly interesting concerning two questions that were put to the Administrative Court: the conformity of the PSE with the "Climate" law and the "Florange" law.
1. Compliance of the PSE with the "Climate" law: must the consultation of the Economic and Social Committee include an environmental component?
The law of 22 August 2021, known as the "Climate" law, provides for an obligation to inform and consult the CSE on the environmental consequences of the employer's projects as part of the consultations provided for in Article L.2312-8, II of the Labour Code. This article covers the issues relating to the organisation, management and general running of the company.
When the "Climate" law came into force, there was considerable disagreement as to whether the employer should also consult the CSE on the environmental consequences as part of other consultations, in particular in the case of restructuring projects, staff cuts and collective redundancies for economic reasons, mergers, public takeover bids and collective proceedings.
Indeed, the articles governing this type of operation and in particular Article L.2312-37 of the Labour Code, which applies to restructuring projects and collective redundancies for economic reasons, have not been modified by the "Climate" law.
According to some of the doctrine, since consultations other than those under Article L.2312-8, II of the Labour Code are not mentioned in the Climate Act, the CSE did not have to be consulted on the environmental consequences.
For other authors, Article L.2312-37 of the Labour Code simply specifies Article L.2312-8, II: restructuring, downsizing and collective redundancies for economic reasons are measures likely to affect the volume and structure of the workforce; mergers and takeover bids are changes in the legal organisation of the company; collective procedures are both, and must therefore be treated in the same way.
This was the view of the CSE.
The employer argued that the environmental consultation did not have to be organised in the case of a PSE. He added that the "Climate" law had come into force after the opening of the information and consultation procedure of the CSE and therefore did not apply in this case. In any event, it stated that it had provided the CSE with information on the environmental aspect of the project and that the CSE had specifically addressed the environmental issue when giving its opinion.
The Montreuil Administrative Court ruled in favour of the employer, considering that the CSE did not have to benefit from the new consultation provided for by the "Climate" law on the environmental consequences of the proposed collective redundancy for economic reasons insofar as Articles L.1233-61 to L.1233-64 of the Labour Code had not been amended.
This is one of the first decisions of the judges of the court of first instance on the question of the scope of application of the environmental consultation instituted by the Climate Law. To the best of our knowledge, no appeal decision has yet been handed down on this matter.
2. Compliance of the PSE with the "Florange" law: can the PSE provide for measures to accompany a takeover that has not yet been completed on the day of its approval?
Older than the "Climate" law, the "Florange" law of 29 March 2014 and in particular articles L.1233-57-9 et seq. of the Labour Code require an employer who plans to cease its activity to look for a buyer when it belongs to a group or company with at least 1000 employees.
There is no provision in this law that requires the employer to include in its PSE social measures to support employees whose employment contracts are transferred to the buyer of the site.
In this case, the employer had gone beyond its legal obligations and had provided in the PSE for accompanying measures in the context of a potential takeover project, since a buyer had shown a real interest in taking over the site and its staff.
The CSE criticised the administration for having taken these measures into consideration because they were only hypothetical. It therefore requested the annulment of the decision to approve the PSE on this basis.
The employer indicated that the measures presented in the PSE were concrete and precise. It recalled that the "Florange" law does not require a buyer to be found before the end of the information and consultation procedure on the project for definitive cessation of activity and economic redundancy. In the vast majority of cases, the time required to formalise a site takeover project is much longer than that required to draw up a PSE. The employer therefore argued that forcing it to finalise the takeover at the time the PSE was submitted to the administration would mean forcing it to refuse all takeover offers made after the opinion of the CSE and thus betraying the meaning of the 'Florange' law.
The Montreuil Administrative Court agreed: the fact that the measures relating to the potential takeover of the employees had been included was not such as to have distorted the assessment made by the DRIEETS on the possibilities of redeployment, and the DRIEETS had not misunderstood the possible nature of the measures conditional on the outcome of the firm takeover bid.
Here again, the Montreuil Court's decision is unprecedented: to our knowledge, no decision had yet ruled on the question of whether the PSE could include measures relating to a potential takeover. However, it is a logical decision given the spirit of the Florange law, which is to encourage the employer to really invest in the search for a buyer. A decision that would have sanctioned the employer for not having been able to finalise its takeover project at the time of filing its PSE would have been a total deterrent and would have run counter to the aim of the text.
The judgement rendered by the Montreuil Court thus opens up a number of issues and it goes without saying that future decisions on these topics are highly anticipated.
Article published in ActuEL RH