Voluntary redundancy plan: the nullity of the plan leads to the nullity of the individual termination agreements

In a decision of October 17th, 2018, the French Supreme Court confirmed that the nullity of a voluntary redundancy plan (“PDV”), where part of a social plan, leads to the nullity of the acts and deeds taken for its application.

In this case, the employees had signed, in September 2009, an agreement to terminate their employment contracts by mutual agreement pursuant to a PDV, as part of a social plan. By judgment of October 2009, this PDV was cancelled on the grounds that its provisions on external redeployment were insufficient.

The employees brought an action before the labour court to obtain the nullity of the individual termination agreements signed. Sentenced on appeal, the employer appealed to the Supreme Court and put forward various arguments, including the following:

• The nullity of a PDV providing exclusively for voluntary departures does not entail the nullity of individual termination agreements;
• As the employees were not parties to the proceedings to obtain the cancellation of the PDV, they could rely on the res judicata principle in accordance with Article 1351 of the Civil Code then applicable.

The Supreme Court rejected all these arguments and ruled that “the nullity affecting a voluntary redundancy plan which does not meet the legal requirements, extends to all subsequent acts, that in particular the individual agreement to terminate the employment contract following a voluntary departure when it has an economic cause and is part of a workforce reduction process, exclusive of any redundancy, giving rise to the establishment of this plan, is itself null”.

Cass. Soc. 17 October 2018, n°17-16869