International Employment Law Review: August 2013 - Issue 4: Recent Employment Law Developments in France

by Dechert LLP
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Legislation

Interprofessional National Agreement and Law on Employment Security Passed

On January 11, 2013, social partners at national level agreed to an interprofessional agreement “for a new economic and social model serving business’ competitivity and securing employment and professional careers of the employees.” The agreement was followed by passage of a law on June 16, 2013 making the agreement enforceable. The new law contains various measures aimed at providing more flexibility to employers, among which there are the agreements for employment stability as well as agreements for internal mobility. Other provisions of the new law aim to reinforce employee rights related to external mobility and to extending access to medical insurance.

Case law

Dismissal Letters Should Not Refer to Penal or Administrative Charges That Are Not Final: Cass. Soc. December 12, 2012, n° 12-13.522

In this case, an employee was dismissed because he could no longer perform his job duties after his driver’s license was suspended. The employee appealed the suspension of his license and his termination. The employee’s appeal of the suspension was successful and the administrative court reinstated his driver’s license. Following that decision, the French Supreme court ruled that even if the employee’s termination was justified at the time that it was communicated to the employee, it was now unfair in light of the administrative court’s ruling. Other courts have reached similar decisions involving the effect of criminal court rulings where a former employee was exonerated. (Cass. Soc. January 12, 2012, n° 10-19-611).

These decisions endorsing the potential retroactive effect of both administrative and criminal court decisions on collateral employment cases are cause for concern. The outcome of the employment case is closely connected to the reasons for dismissal cited in the termination letter. Given these rulings, employers would be wise to refer to the consequences of the employee’s behavior for the employer and not solely to the criminal or administrative charges where those charges are not yet resolved.

Privacy Rules Do Not Prevent the Production of Documents in Litigation: Cass. Soc. December 19, 2012 n° 10.20.526 and 10.20.528

Employers cannot use privacy rules related to employee information or business secrets to refuse to produce that information when related to possible sex discrimination after a judge requests that information prior to litigation. The French Supreme Court approved a request made by two employees who alleged that they were paid lower wages as a result of sex discrimination. Prior to litigation, the employees requested that the employer preserve certain information about other employees. The employer objected. However, judges may order this disclosure on the basis of article 145 of the Code of civil procedure, if the disclosure is legitimate and necessary for the protection of the rights of the claimant.

This decision is surprising when read in conjunction with another decision rendered recently by the European Court of Justice (ECJ) in which it ruled that employees do not have a specific right to access information which could demonstrate the existence of direct or indirect discrimination. The ECJ plaintiff argued in a plausible way that he was not hired in spite of meeting all the requirements and, suspecting illegal conduct, sought access to information about the successful candidate. The ECJ rejected that request and found that the applicant does not have a right to access the documents related to the selection of the successful candidate. (ECJ, April 19, 2012, C-415/10).

Bullying Can Render an Amicable Termination Invalid: Cass. Soc. January 30, 2013, n° 11-22.332

An employee who entered into an amicable termination agreement challenged the validity of the termination on the basis that he had been bullied. The French Supreme Court decided that there was evidence that, at the time the employee signed the amicable termination agreement, the employee was psychologically troubled as a result of bullying and found that the termination was unfair.

The “amicable termination” was been introduced by June 25, 2008 law as a new type of termination freely entered into by the parties. This kind of termination requires free consent from the employee. In this case the fact that there had been bullying allowed the court to void the amicable termination, in the same way that claim of mistake, fraud, and violence allow a court to void an agreement in France. This decision reminds employers of the importance of remaining vigilant with respect to the circumstances surrounding amicable terminations in order to avoid later claims that the termination was void.

Employer Waiver of Non-Compete Must Happened No Later Than the Employee’s Last Day at Work to Avoid the Employer’s Obligations: Cass. Soc. March 13, 2013, n° 11-21.150

In this case, the French Supreme court provided valuable guidance to employers wishing to waive non-compete agreements where the employees are not asked to work during their notice period. An employee’s contract contained a non-compete provision. Following his resignation he was released from working his notice period on January 23, 2009. A few weeks later, on February 6, 2009, the employer waived the employee’s non-compete. The employee asked the employer to pay the financial compensation to which he was entitled as a result of the non-compete covenant. The employer refused and argued that the agreement entitled him to waive the non-compete clause at any time during the course of the employment contract including during the notice period. The Supreme Court ruled in favor of the employee. The Court held that despite any contractual or conventional provisions such a waiver should occur at the latest on the employee’s last day at work and in this case, the employer simply waited too long.

Disciplinary Procedures and Compliance with Provisions for a Collective Bargaining Agreement: Cass. Soc. March 27, 2013, n° 11-20.737

When a collective bargaining agreement (CBA) provides for a specific time period in which to notify the employee of dismissal, it must be complied with even when the law permits a longer period. In this case the applicable CBA was the one for architects. The employer did not comply with the CBA’s ten day time limit for notifying the employee of a disciplinary termination. The employee challenged the termination as unfair because it did not comply with the CBA. The employer argued that the CBA’s provision was just a procedural rule that even if violated could not impact the validity of the dismissal because the law allowed a longer period of one month to notify the employee of the dismissal. The Supreme Court disagreed and found that failure to comply with the CBA rendered the termination invalid. This decision is a good reminder for employers to follow any applicable CBA provisions even if they contradict with rules provided by the law to avoid problems.

Risks on Annual Day Packages: Cass. Soc. April 24, 2013, n°11-28398

In a case where the employer was governed by the CBA for the service industry sector, the French Supreme Court ruled that annual day packages are enforceable and valid only if the provisions of the CBA guarantee that employee work time and workload are reasonable and ensure a fair sharing of the work between the employees in order to protect their health and safety. In this matter, the annual day package was considered null and void because neither the service industry sector CBA nor the company-wide CBA provided these kinds of guarantees.

The consequences of this case are potentially significant. Employees may seek to void their annual day packages. If successful, the employee would then fall within the standard working time regime (requiring hourly wages) which, in turn, would allow the employee to make claims for back pay for work over 35 hours a week and damages for non-compliance with the provisions on mandatory rest (“repos compensateur”) when the overtime performed exceeded the legal or conventional annual limit (“contingent annuel d’heures supplémentaires”).

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