Understanding the Pathways to Above-Mandatory Severance Pay When Downsizing: A Qualitative Comparative Analysis of 20 Cases in France

Abstract

When it comes to negotiating over a collective dismissals plan, the French national legal framework explicitly encourages social partners to favour outplacement services over significant indemnity payments. However, significant above-mandatory redundancy payments are commonly granted to laid-off workers. Based on these factual observations, this article aims to identify the antecedent conditions, or, more precisely, the combinations of conditions, that lead to the granting of a large severance pay. We conducted a qualitative comparative analysis (Crisp set QCA) methodology applied to 20 monographs on downsizing operations that took place in France during the 2000s. The results show that above-mandatory severance payments are closely related to two major dimensions characterizing the economic and social context in which restructuring processes are carried out. The first one is about the balance of power prevailing between the company decisionmakers and the employees. This balance of power dimension is subsumed by two distinct conditions: the availability of financial resources and the presence of active unions. The second dimension relates to the moral and economic damages inflicted upon laid-off workers. This dimension is intrinsically connected to two downsizing process features, i.e. the perceived degree of legitimacy associated with the downsizing process and the degree of employability associated with the laid-off workers. Most notably, it appears that none of the identified conditions is sufficient by itself to induce the payment of a significant above-mandatory indemnity. However, some causal conditions may induce the outcome variable when they are combined with some specific other antecedent conditions. Thus, our research shows that the financial resource condition leads to the granting of an above-mandatory indemnity either in conjunction with a low degree of worker’s employability or in conjunction with both a weak perceived legitimacy of the restructuring process and the presence of active unions.Les dispositifs légaux français qui encadrent les suppressions d’emplois incitent explicitement les partenaires sociaux à négocier des accords mettant l’accent sur le reclassement des salariés licenciés plutôt que sur l’indemnisation financière. Pourtant, l’octroi d’indemnités supra-légales semble bien inscrit dans les pratiques des entreprises françaises. Cet article tente d’identifier les conditions ou, plus précisément, les combinaisons de conditions qui conduisent à l’octroi d’indemnités supra-légales. Pour cela, nous avons mené une analyse qualitative comparée (Crisp set QCA) de 20 cas de restructurations ayant eu lieu en France au cours de la décennie 2000. Les résultats montrent que les indemnités de licenciement sont conditionnées par deux dimensions principales du contexte économique et social dans lequel se déroulent les suppressions d’emplois. D’une part, l’instauration d’un rapport de force favorable aux salariés est nécessaire. Celui-ci dépend soit de la disponibilité de ressources financières, so...

Developing a framework for responsible downsizing through best fit: the importance of regulatory, procedural, communication and employment responsibilities

“…Such perceptions are shaped by age, gender, tenure and skill level or sectoral norms and values. While best practices in terms of procedural issues such as advance warning periods (Eby & Buch, 1998), severance pay (Garaudel et al, 2016) or employee involvement (Bergström & Arman, 2017;Pfeifer, 2007) exist, not all of them are of equivalent value to employees. A best fit approach can hence explain how the prioritisation of different practices amongst organisations are determined by the variable characteristics of the workforce, as opposed an application of uniform best practices.…”