In a ruling dated 11 February 2026 (French Supreme Court, 11 February 2026, No. 24-18.886), the Supreme Court clarified the definition of a “group” for the purpose of assessing the redeployment obligation in the context of a dismissal for economic reasons. The Supreme Court clarified the definition of a “group” for the purpose of assessing the redeployment obligation in the context of a redundancy.
Facts
An employee was working simultaneously for two companies:
- One was his main employer;
- The other employed him under a part-time contract.
Both companies were managed by the same individual.
The company that was his main employer proceeded with his redundancy. One year later, he entered into a mutual termination agreement (rupture conventionnelle) with the second company.
Considering that his redundancy was unlawful, the employee brought a claim before the Labour Court. In particular, he argued that his employer had failed to seek redeployment opportunities within the second company, even though he was already working there at the time of his redundancy.
The companies contended that they did not constitute a group within the meaning of Articles L. 233-1 and L. 233-3 of the French Commercial Code because:
- There were no capital links between the two companies;
- The mere fact that they shared the same manager was insufficient to establish the existence of a group.
They therefore argued that the redeployment obligation was limited to the sole main employing company.
The Court of Appeal upheld the dismissal, ruling that the mere existence of common management was not sufficient to characterize a group of companies within the meaning of the French Commercial Code.
The ruling
The French Supreme Court overturned the decision of the Court of Appeal.
It noted that:
- The manager of both companies was the majority shareholder of the first;
- He held 70% of the share capital of the second.
There was therefore a capital-based control relationship between the two companies, regardless of the fact that such control was exercised by a natural person.
Consequently, the scope of redeployment should have included the second company. As the redeployment search was insufficient, the redundancy was held to be unfair.
