Implementation of a collective redundancy plan in the Principality: overview of the latest case law improvements

The recent development of redundancy plans in Monaco has logically led to a growing jurisprudential framework on this topic. As it previously did regarding the validity of an economic ground behind the collective dismissal plan, the Labour Court now provides the guidelines to implement a collective dismissal plan in the Principality. 

Until now, the terms of the applicable Amendment n.12 left ample room for interpretation, due to its concision and anteriority. 

Over the past few years, the clarifications provided by the Judge regarding the implementation, sometimes complicated, of a collective redundancy plan have been multiplied.

Case law has confirmed the role of the staff representatives during the consultation period, increased and clarified the employer's obligations in terms of reassignment, and clarified the consequences of the financial measures granted to employees dismissed under a redundancy plan.

Concerning staff delegates, the message is clear: during the consultation period provided under Amendment n° 12, they must be able to play their advisory role genuinely and efficiently.

In case of a possible litigation, the employer must therefore prove that the consultation period occurred and the scope of the information given to staff representatives.

The Labor Court emphasizes the « minimal » character of the conventional consultation periods’ which it considers « legitimate » to extend, when the circumstances are unfavorable to the consultation.

On the contrary, an employer who would stick to the conventional minimum period despite an unfavorable context to the consultation will have to demonstrate it was sufficient to allow staff representatives play their role efficiently.

Regarding the formalism expected from the employer in the transmission of its reclassification proposals, the stringency will depend on the area concerned by the reclassification.

Thus, the implementation of the reclassification research obligation will not be subject to the same formal requirements, depending on whether the reclassification proposal involves the firm itself or another company of the group located abroad.

Last, but not least, the Labor Court appreciates the amounts granted on the basis of a negotiated social plan to assess the possible compensation claimed before its court for abusive dismissal.

These decisions remind the importance of the implementation conditions of redundancy plan, from the first submission of the informative document, to the negotiations leading by staff representatives, to end-up in granting extra-legal indemnities.

By Sophie Marquet and Florence de Guzman de Saint Nicolas

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