Definition of economic contract termination


To put it in simple words, when a company or enterprise faces an economic crisis, it may resort to contracts terminations in order to stabilize its economy. It is legitimate, and it may seem simple, but there are actually more details to it…

Synthesis of the economic job cut

It constitutes a contract termination for an economic motive, the effectuated job termination by an employer for one, or miscellaneous motives that are not inherent to the employee or the official, may result in a suppression, modification or a transformation of the job itself, which would be refused by the official if he wishes to, because of an essential element of the working contract and consecutives to which some economic difficulties or technological mutations may occur.

Like any other contract termination, the contract termination for economic motive has to be justified by a serious and real economic issue.

Detailed Intel on the matter plays an important role.

Economic issues and technological mutations

The transformation or even the suppression of the job the modification, which can also be refused by the employee for the same reasons, must be caused by economic issues, technological mutations, the reorganization of the enterprise that is not only highly recommended, but also vital to the preservation of the company’s safety, which is way different from the simple seeking of benefits, or the cessation of the company’s, total or partial, activity.

The existing economic difficulties exist when there is a loss in the market, when becoming largely indebted, or having a serious deficit in budget, but not when an insignificant small incident occurs, like a small drop in sells. The same goes for the economic research, while the economic and financial situation of the company is good; it becomes impossible to justify a contract termination for economic reasons. The technological mutation such as, for instance, the acquisition of different new tools that bring miscellaneous new working methods and computerization, may also be, amongst others, a principal cause of contract terminations. The employer has to establish a complete adaptation plan to the benefits of his officials. This shall only be applied when the technological mutations are fast and important.

The contract termination for economic motives can only be considered when all the attempts of training and adaptation have already been done and when the raking of the concerned official cannot be done in the enterprises group, which the company belongs to.

The suppression of the job does not mean more unemployed people

It could be the pure and simple suppression of the position itself, but it could also be the repartition of the tasks that were done by the only official among all the enterprise’s officials whose contract was terminated.

The suppression of the position does not automatically result in a decrease of the number of employees : a reorganization of the enterprise with a restructuration plan may require the creation of new jobs while requiring the destruction of some other functions.

Nevertheless, a contract termination of an official because all of his tasks may henceforth be applied by another employee does not share the economic basis with the other type of terminations.

The job transformation and modification

The transformation of a job comes as a modification of the job’s nature in itself. These modifications may be seen through the creation of new tasks, or the modification of the old ones. This may even cause the modification of working contract itself.

The modification of an essential element in the working contract

Here, we focus on the modifications that may touch one or many vital elements to the working contract, and in the first place, the qualification, the remuneration, as well as the duration of the work that could be refused by the employee.

When at least ten employees have refused the modification of a vital element in their working contract that was proposed by the employer for economic reasons, like facing a crisis, and that the termination of their contract is being considered, the contract is submitted to different applicable dispositions in case of collective dismissals for economic grounds. This means that the employer will have to elaborate a new plan of employment preservation.

In case of litigations concerning the fact whether the motives of the employer are concrete or not, the judge shall decide according to the elements that are presented to him by the different sources, after ordering, if needed, all the measures of instructions that he believes to be useful. If there is still any kind of doubt floating on any part of the case, the benefit will go to the employee.