According to World Economic Forum, about 14 million jobs will be lost worldwide in 2027 mainly due to artificial intelligence, along with significant changes in economic and social conditions.
Technological unemployment, or the massive losses of jobs, not to say the extinction of certain types of jobs, resulting from the arrival of new technologies are not new to mankind. Lift operator disappeared with the automation of lifts, switchboard operators were no longer needed once switchboard became automated, cashiers were gradually reduced by number with the installation of self-serve checkout, and the list goes on.
Similarly, following recent developments of IA, especially with the introduction of Generative Pre-trained Transformers like ChatGPT, it is impossible to avoid laying off an important number of staff.
The question is, on which legal ground can an employer do so?
In France, article L1233-3 of the French Labour Code provide that:
Redundancies for economic reasons are carried out by an employer on the ground of one or more reasons, not personally inherent to the employee, resulting from the loss or transformation of a job or a change, refused by the employee, of an essential element of the employment contract, resulting in particular from:
1° Economic difficulties (…) / 2° Technological change; / 3° A reorganisation of the company necessary to safeguard its competitiveness; / 4° The closure of the business. (…)
In other words, French law allows an employer to use technological change as a ground for individual or collective redundancies.
Such principle was affirmed by a well-established precedent of the French Supreme Court (Cass., Soc., Jan. 11th 2006, n°05-40.977, “Pages Jaune”).
In this case, Pages Jaune considered that the transition between traditional products (papers and Minitel directories) and those linked to new information technologies (internet, mobile, website) was essential to the safeguard the company’s competitiveness in light of foreseeable consequences of technological developments.
As a result, it decided to cut 9 jobs while creating 42 new other jobs, and so, to dismiss certain employees whose jobs were deleted but who were not competent for the new jobs or who refused to take it.
It is important to note that at the moment of redundancies, the company had not yet suffered any economic difficulties.
The judges ruled that the dismissals were fair and constructive, as reorganisation implemented to prevent future economic difficulties linked to technological developments and their consequences on employment was a valid reason for redundancies.
Overall, AI will be incessantly innovated. The only way to deal with changes is to adapt to it, whether in a literal or legal sense.
This article was published by our French member firm MGG Legal on 6 February 2024. To see how they can assist on the procedure of redundancies resulting from technological change and with any other employment-related question, reach out to our representative Marijke Granier-Guillemarre, Founder and Managing Partner of the firm.
