Termination by agreement: where the employer’s consent is vitiated by the employee’s deception, the termination may be annulled and have the same effect as a resignation

A contract is only valid if the consent of the parties has been given in a free and informed manner. If this is not the case, a defect in consent may be invoked under the provisions of articles 1130 et seq. of the Civil Code, i.e. in the event of error, fraud (e.g. manoeuvring/lying/dissimulation) or violence.

The decision of the Social Division of the Court of Cassation of 19 June 2024 (no. 23-10.817) is an illustration of the application of these provisions to the contractual termination of an employment contract:

This case concerned a sales technician who had persuaded his employer to accept his request for a contractual termination, indicating that he wished to pursue a career change in management.

The reality was quite different, as this employee was in fact planning to set up a competing company with two other former employees of the company.

As the employee had deliberately concealed from his employer information that he knew to be decisive, in order to obtain the employer’s agreement to the termination, the judges ruled that the employer’s consent was vitiated.

The consequence, clarified for the 1st time by the Cour de cassation, is the nullity of this termination, which is analysed as a resignation.

In practice, the employee must therefore reimburse his former employer for the severance pay received (in this case €18,775) and pay him compensation for the notice period not served (in this case €20,334).

Please note: both the employer and the employee may request that a contractual termination be declared null and void. If it is obtained by the employee, it produces the effects of a dismissal without real and serious cause, or even null and void in certain cases.

The lawyers in the Employment Law department will be happy to answer any questions you may have about the practical implications of these new rules.