The French Court of Cassation is tightening its scrutiny of HR practices. Three judgments handed down in October 2026 clarify the risks associated with economic dismissals, the transfer of protected employees, and the recording of works council (comité social et économique, CSE) meetings.
Economic Dismissal: Meeting the Required Duration of Declining Revenue Is Not Enough
In this case, two analysts had been dismissed on economic grounds, with their employer citing a decline in revenue. The question was whether the duration of that decline alone was sufficient to justify the dismissals.
Article L. 1233-3 of the French Labour Code sets a minimum duration for the decline in revenue or orders when assessing whether a dismissal is based on economic difficulties: two consecutive quarters for companies with 11 to fewer than 50 employees, three consecutive quarters for those with 50 to fewer than 300, and four consecutive quarters for those with 300 employees or more. However, merely meeting this minimum duration is not enough to establish economic difficulties.
In its judgment of 7 October 2026 (Cass. soc., 7 October 2026, No. 25-10.107, published in the Bulletin), the Court of Cassation held that the court must still verify, in the light of all the evidence produced, whether the decline is sufficiently significant to constitute economic difficulties justifying the dismissal.
The Court noted that markets had recovered and that certain financial documents submitted by the employer were insufficient. It therefore found that, even though the revenue decline met the thresholds laid down by the Labour Code, it was not significant enough to establish economic difficulties justifying the dismissals. The dismissals were held to lack sufficient economic justification.
Before setting the timetable for a restructuring, a company must therefore document the scale of the decline, its component parts, and the evidence confirming or contradicting a recovery. A spreadsheet showing the required number of quarters does not constitute a complete file.
Transfer Between Group Companies: A Protected Employee’s Consent Does Not Replace Administrative Authorisation
The case concerned a protected employee, designated as a trade union representative, whose contract was to continue with another company within the same group under a tripartite transfer agreement. He was subsequently dismissed for gross misconduct by the new employer and challenged, among other things, the validity of the transfer, which had been carried out without the authorisation of the labour inspectorate.
The Court of Cassation confirmed that the consent of an employee designated as a trade union representative to an agreement providing for the continuation of their contract with a different employer does not dispense with the requirement to obtain prior authorisation from the labour inspectorate (Cass. soc., 7 October 2026, No. 24-13.821, published in the Bulletin).
Prior authorisation remains necessary, the Court held, even where the employee has agreed to the transfer. Absent such authorisation, the agreement is void, and the employee may demand reinstatement in their position on the same terms of employment and remuneration.
Before any transaction that changes the contractual employer, the company must therefore identify the mandates and protection periods concerned. The authorisation request must be built into the transaction timetable – before any actual transfer takes place.
Recording of Meetings of the Social and Economic Committee (CSE): A Strictly Limited Purpose
The dispute arose from a disagreement over the recording of CSE and health, safety and working conditions committee (commission de santé, de sécurité et des conditions de travail, CSSCT) meetings. The CSE recorded its own meetings to facilitate the drafting of minutes, while the employer wished to make its own recordings in order to monitor discussions and check the content of the minutes.
In its judgment of 7 October 2026 (Cass. soc., 7 October 2026, No. 25-10.664, published in the Bulletin), the Court of Cassation prohibited the employer from recording CSE or CSSCT meetings itself for the purpose of checking minutes, monitoring discussions, or preserving evidence.
Although Articles L. 2315-34 and D. 2315-27 of the Labour Code permit the recording or shorthand transcription of CSE meetings, this is solely to facilitate the drafting of the minutes, which falls within the exclusive competence of the CSE secretary.
Companies must therefore ensure that recordings of CSE and CSSCT meetings serve exclusively to prepare the minutes and do not become a tool for monitoring employee representatives.