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18 December 2019
The Court of Appeal has ruled that employers' decisions regarding their economic policy, internal organisation and operating procedures cannot justify an employee's resignation due to serious misconduct.
Employees are free to resign with notice or with immediate effect.
A resignation with notice need not be justified. On the other hand, a resignation with immediate effect must be based on a serious fault on the part of the employer of which the employee must have had knowledge within the month of resignation (both conditions being cumulative). Without these conditions being fulfilled, the resignation will be considered unjustified in the event of a dispute and the employer will be entitled to compensation in lieu of notice.(1)
The Labour Code provides for certain cases where employees have the right to resign without being required to comply with a notice period.(2)
In addition, the labour courts have specified cases in which an employee's resignation with immediate effect is justified, including situations in which an employer:
In a recent case the Court of Appeal considered an original ground for resignation with immediate effect – namely, the management policy applied by the employer, which was a bank on the verge of bankruptcy.(6)
In 2001 the employee was hired by the bank as a risk manager and at the time of his resignation was head of risk management.
On 9 October 2008 the employee resigned with immediate effect for the following reasons:
According to the court, it was necessary to first check whether the employer was guilty of serious misconduct and then verify whether the employee had respected the one-month time limit.
Consequently, the court first ascertained that the bank's management, its decisions and the means put in place that had been criticised by the employee were not linked to a serious fault on the part of the employer.
Indeed, after having recalled the general principle(7) that an "entrepreneur is the master of the organisation and the reorganisation of his company and bears the risks engendered by the activity of the company", the court decided that an:
employee may criticize these decisions relating to management and choose to terminate his employment contract binding him to the employer, but respecting the notice period; however, he cannot rely on them as serious misconduct attributable to the employer to resign with immediate effect.
For the court to admit otherwise "would allow any employee whose employer risks being declared bankrupt to resign in extremis for serious misconduct, in order to claim damages".
After analysis of the second condition was deemed to have become superfluous, the resignation with immediate effect was declared abusive and the employee was denied his claim for damages.
For further information on this topic please contact Guy Castegnaro or Ariane Claverie at Castegnaro by telephone (+352 26 86 82 1) or email (email@example.com or firstname.lastname@example.org). The Castegnaro website can be accessed at www.castegnaro.lu.
(3) Court of Appeal, 1 February 2018, 44587, which states that the "late and partial payment of wages at irregular intervals and repeatedly, and late discount of the salary slips constitute a serious breach of the employer's obligations justifying the resignation with immediate effect of the employee".
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