{"id":13557,"date":"2026-05-05T11:22:48","date_gmt":"2026-05-05T09:22:48","guid":{"rendered":"https:\/\/patchwork.law\/non-classifiee\/licenciement-economique-criteres-ordre-des-licenciements-et-obligations\/"},"modified":"2026-05-24T11:48:09","modified_gmt":"2026-05-24T09:48:09","slug":"economic-dismissal-in-france","status":"publish","type":"post","link":"https:\/\/patchwork.law\/en\/employment-law-glossary\/economic-dismissal-in-france\/","title":{"rendered":"Economic dismissal in France: grounds, selection order and employer obligations"},"content":{"rendered":"

Economic dismissal<\/strong> (licenciement \u00e9conomique<\/em>) is the termination of an employment contract at the employer’s initiative for reasons unrelated to the employee personally. It rests on economic grounds precisely defined by statute and is subject to strict procedural obligations: selection order, job protection plan and prior redeployment duty. Breaches expose the employer to severe sanctions, and litigation in this area is abundant. A thorough understanding of this regime is essential, both for companies planning restructurings and for employees seeking to defend their rights.<\/p>\n

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1. Economic dismissal: definition and statutory grounds<\/h2>\n

1.1 \u2013 Statutory definition<\/h3>\n

An economic dismissal is any dismissal carried out by an employer for one or more reasons unrelated to the employee personally, resulting from the elimination or transformation of a job, or from a change, refused by the employee, to an essential term of the employment contract, arising in particular from economic difficulties, technological change, a reorganisation of the company necessary to safeguard its competitiveness, or the cessation of the company’s activity (Art. L. 1233-3 of the Labour Code<\/a>).<\/p>\n

1.2 \u2013 Recognised economic grounds<\/h3>\n

The El Khomri Act of 8 August 2016, codified in Article L. 1233-3, clarified and defined the economic grounds that may found a dismissal. Four grounds are now recognised:<\/p>\n\n\n\n\n\n\n\n\n
Economic ground<\/th>\nDetails<\/th>\n<\/tr>\n<\/thead>\n
Economic difficulties<\/strong><\/td>\nEvidenced by a decline in orders or turnover, operating losses, or a deterioration in cash flow or gross operating surplus, over a period varying with headcount (1 to 4 consecutive quarters)<\/td>\n<\/tr>\n
Technological change<\/strong><\/td>\nTechnical developments affecting jobs and the skills required to perform them<\/td>\n<\/tr>\n
Reorganisation necessary to safeguard competitiveness<\/strong><\/td>\nA serious threat to the competitiveness of the company or its sector of activity, including where no current difficulties exist<\/td>\n<\/tr>\n
Cessation of activity<\/strong><\/td>\nDefinitive closure of the company or an establishment, not attributable to any fault of the employer<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
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Important note: scope of assessment of economic difficulties within a group<\/strong><\/p>\n

For companies belonging to a group, economic difficulties are assessed at the level of the shared sector of activity<\/strong> within the group, including overseas. An employer cannot rely on difficulties at the level of its subsidiary alone if the sector concerned is performing well across the group as a whole.<\/p>\n<\/div>\n

1.3 \u2013 The two triggering acts<\/h3>\n

The economic ground must materialise through one of the following two acts:<\/p>\n