Questions to ask yourself to properly manage incapacity to work

Incapacity to work is defined as the inability of a worker to perform their job due to their physical or mental health.

Notices of incapacity are most often issued following health situations that are already complex for employers to deal with. Then, when incapacity is declared, a rigorous and sometimes sensitive procedure must be implemented, which most often generates both legal and practical questions, and risks significant financial penalties for the employer in the event of incorrect application or misapplication of the provisions relating to the incapacity procedure.

What measures should be taken upstream to limit declarations of incapacity? How can the procedure be properly managed to limit the risks of subsequent litigation? What are the sanctions and possible financial consequences of declarations of incapacity?

These are the questions to be answered when you are an employer, in order to best manage incapacity to work.

Want to know more ? Watch the replay of our special “incapacity” webinar here.

What is incapacity?

Incapacity to work is the recognised inability of the employee to occupy their position due to their state of health.

It is provided for in Article L.4624-4 of the French Labour Code, which stipulates that the employee is declared unfit for their position if the occupational physician finds:

• That no adjustment, adaptation or conversion of the position held is possible,
• And that the state of health of the worker justifies a change of position.

The incapacity may or may not be of occupational origin (i.e. as a result of an accident at work or an occupational disease).

When is incapacity declared?

Incapacity is declared following any type of medical examination, either at the end of sick leave during the return-to-work examination for example, or at any other medical examination in the context of the performance of the contract (Court of Cassation, Employment Division, 7 July 2016, no. 14-26.590).

By whom can incapacity be recognised?

Incapacity falls within the exclusive competence of the occupational physician. Only the occupational physician can declare it.

According to the French Labour Code, the occupational physician can only declare incapacity after three mandatory steps:

• After having carried out at least one medical examination of the employee, (or two examinations if the occupational physician deems it necessary, within 15 days French Labour Code Art. R4624-42),
• After having carried out or had a third party carry out a study of the position and having carried out or had a third party carry out a study of the working conditions in the company,
• After having previously talked to the employee and the employer.

How is incapacity made tangible?

The declaration of incapacity is made tangible by the issuance, by the occupational physician, of a dedicated CERFA form.

The occupational physician must also submit their written conclusions to the employee and the employer, in which they must give information about the employee's redeployment and the employee's capacity to benefit from training designed to offer the employee a suitable position.

The notice of incapacity is sent to the employee and to the employer by any means that provides an exact date.

Is the notice binding on the employer?

Yes, the notice of incapacity is binding on the employer. The latter may in theory refuse to apply it by providing a written explanation of the reasons for its refusal to the employee and the occupational physician.

This rule, provided for in Article L.4624-6 of the French Labour Code, is however not really applicable in practice insofar as the employer must ensure that the recommendations of the occupational physician are respected and is only on very rare occasions able to refuse the notice issued to it.

The only room for manoeuvre will be to discuss the occupational physician's recommendations for redeployment to try to adapt them if they are not compatible with the company’s organisation.

What does the redeployment obligation involve?

When a worker is declared unfit for their position, the employer must seek solutions to redeploy them in another position compatible with their state of health; the position must be compatible with their physical and mental capacities as defined by the occupational physician in their notice and recommendations (French Labour Code Art. and L. 1226-10).

Three conditions / steps must be met for the employer to be considered as having fulfilled its obligations in terms of seeking redeployment:

• The search must be carried out taking into account the written conclusions of the occupational physician and the information they give on the capacity of the employee to perform one of the existing tasks in the company;
• The position must be as comparable as possible to the position previously occupied, if necessary through the implementation of measures such as an adjustment, adaptation or conversion of existing positions;
• A redeployment position may be offered only after obtaining the opinion of the Works Council (CSE), if the company has one;

Are there any situations where the employer does not have to look for a redeployment position?

The employer is sometimes exempted from seeking redeployment.

There are two legal cases of exemption, provided for in Article L.1226-2-1 of the French Labour Code:

• Either because the occupational physician indicated in the CERFA form that keeping the employee in employment would be seriously detrimental to their health;
• Or because the occupational physician indicated in the CERFA form that the employee’s state of health prevents any redeployment.

Another exception is also provided when the employee is on an apprenticeship contract.

This must be expressly recalled in the letter of dismissal in the event of dismissal for incapacity .

In what scope should redeployment searches be carried out?

Two different scopes are required depending on whether the company belongs to a group or not:

• 1^st hypothesis: when the company belongs to a group, the employer must look for another job “within the company or companies of the group to which it belongs where applicable, located on the national territory and whose organisation, activities or place of operation allows all or part of the staff to be interchanged”.

• 2^nd hypothesis: the company does not belong to a group, the redeployment must be sought among the jobs available in the company, in all sectors of the company, on all company sites.

In both cases, the redeployment obligation is limited to France (French Labour Code Art. L. 1226-2/L. 1226-10).

What characteristics should the redeployment position have?

The proposed job should be as comparable as possible to the job previously held, if necessary by the implementation of measures such as transfers, adjustments, adaptations or conversions of the position or the organisation of working time.

All positions available in relation to the capacity and skills of the employee, if applicable after further training, must be offered to the employee.

If the employer can only offer a redeployment position involving an amendment to the contract, it must make the proposal to the employee who is entitled to refuse (Court of Cassation, Employment Division, 17 Feb.2010, no. 08-43.725).

When and how should the Works Council (CSE) be consulted?

The elected members must be systematically informed/consulted prior to the sending of the redeployment proposals, in application of the provisions of Article L. 1226-10 of the French Labour Code. The consultation is carried out at the level of the site in which the employee works (Employment Division, 13 Nov. 2008, no. 07-41.512).

The Works Council (CSE) must be consulted, even if redeployment is impossible due to the absence of available positions (Court of Cassation, Employment Division, 30 Sept. 2020, no.19-16.488). The Works Council (CSE) will then be consulted on the absence of available positions compatible with the employee's situation.

The only hypotheses in which the employer is exempted from consulting the Works Council (CSE) are when the employee is exempted from redeployment by the occupational physician (Court of Cassation, Employment Division, 8 June 2022 no. 20-22.500)

Is dismissal of the unfit employee inevitable?

No, the dismissal of the unfit employee can be avoided when a redeployment position is accepted by the employee! In this case, the employee must sign an amendment to their employment contract and the employer must, of course, ensure that the employee is fit for their new position.

Nevertheless, if no redeployment solution is found, the employer may dismiss the employee for incapacity, because of the impossibility of redeployment, the employee's refusal of the position offered compatible with the occupational physician's recommendations or given the exemption from seeking redeployment taking into account the notice by the occupational physician.

Note: an employee on a fixed-term contract can also have their contract terminated early.

What is the procedure for dismissal for incapacity?

In the event that it is impossible to offer a redeployment position, the employer must state the reasons for this in writing before initiating the dismissal procedure.

Then, the dismissal procedure can be initiated; this is the same as that for dismissals for personal reasons. The protected employee must, taking into account their term of office, benefit from the special procedure provided for them.

The drafting of the dismissal letter remains a risky step in the procedure for dismissal for incapacity. Indeed, the employer must state that the employee is dismissed for incapacity and because it is impossible to redeploy them or because of the exemption from seeking redeployment. Otherwise, the dismissal may be regarded as deprived of any real and serious cause, even if the procedure had been monitored by the employer and the dismissal was justified on the merits. (Court of Cassation, Employment Division, 23 May 2017, no. 16-13.222; Court of Cassation, Employment Division, 3-6-2020 no. 18-25.757).

Dismissal does not entitle the employee to notice.

And financially, what are the employee’s rights?

During the first month following the declaration of their incapacity, the employee does not receive any compensation or any salary, except when the incapacity is of occupational origin, which entitles the employee to temporary incapacity compensation during this period, in accordance with Article D. 433-5 of the French Social Security Code.

At the end of one month, an unfit employee who is neither redeployed nor dismissed, is entitled to the payment of their salary even if they are unable to resume their position (Articles L. 1226-4 and L. 1226-11 of the French Labour Code).

When the incapacity is not of occupational origin, the dismissed employee benefits from statutory or contractual severance pay (depending on their length of service). On the other hand, unless otherwise provided, no indemnity in lieu of notice is due to them.

When the incapacity is of occupational origin, the employee is entitled to:

• special severance pay, the amount of which is equal to twice the statutory several pay, if this is higher than the contractual severance pay, in accordance with the provisions of Article L.1234-9 of the French Labour Code.
• an indemnity equivalent to the indemnity in lieu of notice (French Labour Code, Art.1226-14).

1. What is incapacity?
2. When is incapacity declared?
3. By whom can incapacity be recognised?
4. How is incapacity made tangible?
5. Is the notice binding on the employer?
6. What does the redeployment obligation involve?
7. Are there any situations where the employer does not have to look for a redeployment position?
8. In what scope should redeployment searches be carried out?
9. What characteristics should the redeployment position have?
10. When and how should the Works Council (CSE) be consulted?
11. Is dismissal of the unfit employee inevitable?
12. What is the procedure for dismissal for incapacity?
13. And financially, what are the employee’s rights?