Dismissal on economic grounds (collective) in Morocco
If you are an employer and your company's situation is pushing you to consider cutting jobs, or if you are an employee being told of a "redundancy plan on economic grounds", know one thing straight away: this type of dismissal is not a decision the employer makes alone. In Morocco, it is governed by a strict procedure, and administrative authorisation is required before dismissing. Here is how it really works.
The essentials in brief
Dismissal on technological, structural or economic grounds concerns commercial, industrial, craft, agricultural or forestry businesses habitually employing ten or more employees [1]. The employer must inform the staff delegates at least one month beforehand, negotiate alternative measures with them, then obtain authorisation from the governor of the prefecture or province [1][2]. This authorisation is issued within a maximum of two months, after examination by a provincial commission [2][3]. A closure leading to dismissals follows the same procedure [4]. The selection of employees follows precise criteria [5].
When does this procedure apply?
Everything rests on two cumulative conditions. First, the nature of the grounds: the dismissal must be justified by technological or structural reasons, similar grounds, or economic reasons [1]. It is a dismissal that relates to the company, not to the employee. The employee has done nothing wrong; it is the activity, the structure or the financial situation that is changing.
Second, the size. The procedure targets commercial, industrial or craft businesses, or agricultural and forestry operations and their dependencies, which habitually employ ten or more employees [1]. Below this threshold, the framework is different.
The Labour Code (Law No. 65-99) deals with the matter in a dedicated section: dismissal on technological, structural or economic grounds and the closure of businesses. It is a separate regime, distinct from individual dismissal for misconduct or for personal grounds.
Worth remembering: if you are told of "restructuring" or "economic difficulties" to justify collective departures in a company of at least ten employees, it is this regime that applies.
The internal step: informing and negotiating with the staff delegates
First of all, the employer must lay his cards on the table internally.
He must bring his decision to the attention of the staff delegates and, where applicable, the union representatives in the company, at least one month before proceeding with the dismissal [1]. One month is not a last-minute formality.
At the same time, he must provide them with all the necessary information: the grounds for the dismissal, the number and categories of employees concerned, and the period during which he intends to act [1]. No secret plan, then.
Above all, the employer does not merely make an announcement. He must engage in consultations and negotiations with the employees' representatives in order to examine the measures likely to prevent the dismissal or to mitigate its negative effects, including the possibility of redeployment to other posts [1]. The objective stated by the law is first to avoid departures, or failing that to reduce the damage.
In companies employing more than fifty employees, it is the works council that acts in place of the staff delegates [1]. This council has, precisely among its consultative tasks, the structural and technological transformations to be carried out in the company, as well as the production strategy and the social projects for the benefit of the employees [9].
At the end of these exchanges, the company's management draws up a report recording the results of the consultations and negotiations, signed by both parties; one copy goes to the staff delegates and another to the provincial labour delegate [1].
In short: without genuine consultation and without this report, the rest of the procedure is shaky.
The governor's authorisation: the mandatory step
Here is the core of the mechanism, and what truly distinguishes this dismissal from the others.
The dismissal of all or part of the employees on these grounds is subject to authorisation issued by the governor of the prefecture or province [2]. In other words, the employer cannot dismiss on his own initiative: he needs an administrative green light.
The governor has a maximum period of two months to decide, counting from the date the employer presents the application to the provincial labour delegate [2].
The application is not just a letter. It must be accompanied by all the necessary supporting documents and by the report of the consultations and negotiations from the internal step [2]. And when the grounds are economic, the employer must add three items: a report setting out the economic grounds that make the dismissal necessary, a statement of the company's economic and financial situation, and a report drawn up by a chartered accountant or an auditor [2]. The law wants figures, not assertions.
The provincial labour delegate carries out the investigations he deems necessary, then transmits the file, within a period not exceeding one month from receipt of the application, to a provincial commission chaired by the governor [2]. This commission is composed of representatives of the administrative authorities concerned and of representatives of the most representative professional organisations of employers and trade unions of employees [3]. Its composition and operation are set by regulation [3].
The governor's final decision must be reasoned and based on the conclusions and proposals of this commission [2]. A decision issued without reasoning is, by construction, fragile.
For you as an employee: all of this plays out largely without you, but through your delegates and a commission on which the most representative unions sit.
And the closure of the company?
Closing rather than dismissing does not allow the procedure to be circumvented.
The partial or total closure of a company covered by this regime is not authorised if it is dictated by grounds other than technological, structural or economic, where it is likely to lead to the dismissal of the employees [4]. The only exception relates to cases where it becomes impossible to continue the company's activity [4].
And even in those situations, the closure is subject to authorisation from the governor, issued according to the same procedure as that of the articles relating to the informing of the delegates and to the administrative authorisation [4].
The message is clear: a closure that results in job losses follows the same path as economic dismissal.
Who goes, in what order, and with what?
Once the dismissal is authorised, the employer does not freely choose who leaves.
Within each professional category, the authorised dismissals take place in each establishment of the company taking into account three elements: seniority, professional value and family responsibilities [5]. These criteria frame the selection and limit arbitrariness.
Dismissed employees moreover enjoy a priority right to re-hiring [5]. If the company recruits again, they are not mere candidates among others.
On the money side, employees are entitled to payment in lieu of notice and severance pay, whether or not the employer has obtained authorisation [6]. Severance pay is calculated per year or fraction of a year of actual work, in hours of wages: 96 hours for the first five years of seniority, 144 hours from the 6th to the 10th year, 192 hours from the 11th to the 15th, and 240 hours beyond fifteen years [7]. More favourable arrangements may appear in the contract, the collective agreement or the internal regulations [7]. The employee may furthermore benefit, according to the legislation in force, from the compensation for loss of employment on economic, technological or structural grounds [7].
In sum: even a lawful economic dismissal gives rise to financial rights, and the selection criteria are not negotiable at the employer's discretion.
What to do in the event of dismissal without authorisation?
Not everything ends if the employer proceeds regardless.
If the employer dismisses on these grounds without the required authorisation, the dismissed employees benefit from damages only by court decision, and only if they are not reinstated in their posts while retaining their rights [6]. Reinstatement therefore remains a possible outcome.
The employer and the employees may resort to preliminary conciliation or refer the matter to the court to settle the dispute [6].
And mind the calendar. On pain of forfeiture, the legal action relating to the dismissal must be brought before the competent court within 90 days of the employee's receipt of the dismissal decision [8]. This period must, moreover, be mentioned in the dismissal decision [8]. Past this point, you lose the right to act: do not delay.
Sources
[1] Article 66 — Labour Code (Law No. 65-99) [2] Article 67 — Labour Code (Law No. 65-99) [3] Article 68 — Labour Code (Law No. 65-99) [4] Article 69 — Labour Code (Law No. 65-99) [5] Article 71 — Labour Code (Law No. 65-99) [6] Article 70 — Labour Code (Law No. 65-99) [7] Article 53 — Labour Code (Law No. 65-99) [8] Article 65 — Labour Code (Law No. 65-99) [9] Article 466 — Labour Code (Law No. 65-99)
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