Employer representation, social and tax declarations, and disability

Newsletter No. 25 – Social Law – September 2015

SUMMARY

Legislative and regulatory news

Employer representation
Decree No. 2015-654 of June 10, 2015
Employer social declarations
- Order of June 18, 2015
Employer tax returns -
Decree No. 2015-600 of June 2, 2015
Employment of disabled persons
- Decree No. 2015-655 of June 10, 2015

CASE LAW

Contract and execution of the employment contract

Self-employed
Reclassification as an employment contract
Temporary employment contracts
Reclassification as a permanent contract
Working hours
Duration in case of reclassification of the contract to part-time
Change of schedule
The loss of meal allowance following a change in working hours is not a contractual modification
Conventional transfer of contract
Obligations of the new employer

Termination of employment contract

Disciplinary measure Definition
Reason for dismissal
Reporting of harassment
Freedom of expression: only abuse justifies dismissal
Refusal of an employee returning from paid leave to take up a similar position
Economic dismissal
Role of the labor inspector
Order of layoffs
Date of inclusion of staff
Compensation
Protected employee
Employee compensation
Validity of the accumulation of compensation
Procedure
Principle of the uniqueness of the instance
Payment of contractual leave: burden of proof

Collective relations

CHSCT
Scope of the mandate to take legal action
Adaptation period
Conditions for implementing an adaptation period
Journalists
Calculating severance pay

Legislative and regulatory news

Employer representation

Law No. 2014-288 of March 5, 2014, concerning vocational training, employment, and social dialogue, created new provisions relating to employer representativeness. This is established in a manner symmetrical to that of trade union representativeness, based on the following criteria:

respect for republican values;
independence;
financial transparency;
a minimum of two years' seniority in the professional and geographical field covering the level of negotiation. This seniority is assessed from the date of legal filing of the articles of association;  influence, primarily characterized by activity and experience;
audience, which is measured according to the number of member companies.

The decree of June 10, 20151 specifies these legislative provisions by detailing the conditions and methods of measuring the audience of employers' organizations at the level of the professional sector, at the national and interprofessional level, as well as the elements necessary for organizations applying for audience measurement.

Employers' social security declarations

The law on simplifying business life² notably authorized the government to take measures to simplify certain declarations.
The ordinance of June 18, 2015, was issued on the basis of this authorization. It includes provisions relating to the business employment service voucher, which it extended, as of July 1, 2015, to companies with fewer than 20 employees instead of 10. At the same time, the association employment voucher, previously limited to companies with fewer than 10 employees, is now extended to associations with fewer than 20 employees.

Employer tax returns

The provisions relating to the declaration that employers had to send to the administrative authority in order to deduct from their contribution to vocational training the direct funding they had mobilized were repealed by the decree of June 2, 2015.
This decree was taken for the application of the provisions of the law of March 5, 2014 relating to vocational training which eliminated this possibility of deducting direct funding.

Employment of people with disabilities

The decree of June 10, 2015 , which came into force on June 14, adds a paragraph to Article R.5212-1 of the French Labor Code. From now on, in companies with multiple establishments, the declaration concerning the obligation to employ disabled workers must be completed by each establishment whose head has managerial authority, including the power to recruit and dismiss staff.

Case Law

Reclassification of the self-employment contract as an employment contract

Soc. May 6, 2015 (No. 13-27.535) FD:

In this case, a self-employed individual carrying out commercial activities for a company brought a claim before the labor court seeking to have his relationship with the company reclassified as an employment relationship.
The Court of Appeal rejected his claim and referred the case back to the Commercial Court. The court had, in fact, held that, firstly, the documents he produced did not establish the existence of a subordinate relationship and, secondly, that the individual had refused to attend a trade fair, and that this refusal, as well as the invoices for services sent to the company, established that he was in no way bound by an employment contract.

1 Decree No. 2015-654 of 10 June 2015 relating to the implementation of the reform of employer representativeness

2 Law No. 2014-1545 of 20 December 2014 relating to the simplification of business life and containing various provisions for the simplification and clarification of administrative procedures

3 Decree No. 2015-600 of 2 June 2015 repealing the regulatory provisions relating to the tax declaration of employers in matters of vocational training 4 Decree No. 2015-655 of 10 June 2015 relating to establishments subject to the obligation to employ disabled workers pursuant to Articles L. 5212-2 and L. 5212-3 of the Labour Code

The Court of Cassation notes that the individual in question had worked according to a precise daily schedule established by the company, that he was required to attend individual interviews and sales meetings, that the company had assigned him annual sales targets, and that he was instructed, in harsh and critical terms, to process sales according to a specific procedure under penalty of rejection. Consequently, the Court of Cassation considers that the Court of Appeal failed to draw the necessary conclusions from its own findings and violated Article L.1221-1 of the French Labor Code.

Reclassification of the temporary employment contract

Soc. June 3, 2015 (No. 14-17.705) FS-PB:

Between June 17, 2002, and December 20, 2009, the plaintiff completed 200 temporary assignments with the same company and then filed a claim with the labor court seeking to have her temporary employment contracts reclassified as a permanent contract.
The Court of Appeal dismissed the employee's claim. According to the court: – the complete interruption of assignments for 27 months, – the significant number of contracts (114) following this interruption and the fact that they were regular were insufficient to establish that their purpose was to permanently fill a position related to the company's normal and ongoing activity, the company preferring to hire on a temporary basis someone who was familiar with their work and with whom it was satisfied, rather than hiring an unknown temporary worker whom it would have to train, – all the temporary assignment contracts stated the reason as either a temporary increase in activity, with the order references, or the replacement of an absent employee, with the employee's name and the reason for their absence. Since the contracts for temporary increases in activity were interspersed with contracts for replacing absent employees, the increases in activity were indeed temporary and not permanent.
The Court of Cassation, on the contrary, held that, whatever the reason for resorting to temporary work, the employee had held the same position. Therefore, she considers that these temporary contracts had been used to meet a structural need for labor and that the job she held was permanently linked to the normal and ongoing activity of the company.

Working hours in the event of reclassification of the contract to part-time

Soc. June 3, 2015 (No. 13-21.671) FS-PB:

In this case, an employee filed a claim with the labor court seeking to have his part-time contract reclassified as a full-time contract. The Court of Appeal granted this claim and set the contract duration at 169 hours.
This duration set by the Court of Appeal was overturned by the Court of Cassation, which clarified that when a part-time employment contract is reclassified as a full-time contract, the resulting working hours correspond to the statutory working hours or, if lower, to the hours stipulated in the collective agreement.

Loss of meal allowance following a change in schedule

Soc. April 9, 2015 (n°13-27.624) FS-PB:

An employee dismissed for refusing to comply with a change in his work schedule notified by his employer challenged the termination of his contract before the labor court. In support of his claim, the employee argued that the change in work schedule modified his employment contract, and in particular his contractual remuneration, without his consent.
The Court of Appeal dismissed his claim. According to the court, the change in work schedule resulted in a reduction of the meal allowance linked to night shifts, which was a reduction of a non-contractual bonus.
The Court of Cassation upheld this decision, rejecting the appeal on the grounds that the reduction in remuneration resulting from the reduction of constraints following a change in work schedule does not constitute a modification of the employment contract.

Conventional transfer of employment contract

Soc. May 27, 2015 (No. 14-11.155) FS-PBR:

In this case, an employee had been employed under two one-month contracts before being hired on a permanent contract. According to the collective bargaining agreement for cleaning and related services companies, the employee's employment contract was transferred following the loss of the contract by her employer. Declared unfit for work, the employee was dismissed for incapacity and brought a claim before the labor court seeking to have her fixed-term contracts reclassified as a permanent contract.
The Court of Appeal ordered the incoming company to pay a reclassification indemnity. According to the court, the new employer was bound by the obligations incumbent upon the former employer and was therefore liable for the reclassification indemnity.
The Court of Cassation held that the continuation of the employment contract resulted solely from the application of the collective bargaining agreement provisions, which do not stipulate that the new service provider is bound by the obligations incumbent upon the former employer at the time of the transfer. Consequently, the Court quashes the appeal judgment.

Disciplinary measure: definition

Soc. May 19, 2015 (n°13-26.916) FS-PB:

In this ruling, the Court of Cassation emphasizes that "any measure, other than verbal remarks, taken by the employer following an action by the employee deemed by the employer to be misconduct, whether or not this measure is likely to immediately affect the employee's presence in the company, their position, their career, or their remuneration," constitutes a disciplinary sanction.
Thus, a request for written explanations, kept in the employee's personnel file along with the employee's response, implemented following actions considered misconduct, constitutes such a sanction. The employee was required to respond to this request alone and immediately, and refusal constitutes an additional grievance that could, in itself, justify a sanction.

Reporting of harassment

Soc. June 3, 2015 (No. 14-12.245) FS-PB:

In this case, an employer had filed a claim with the labor court seeking termination of an apprenticeship contract due to the apprentice's misconduct.
The Court of Appeal upheld this claim, finding that the apprentice had made very serious and entirely unfounded accusations of psychological and even sexual harassment against her employer in a letter, citing, in particular, minor incidents that occurred outside of working hours and at the workplace.
The Court of Cassation first reiterated that, except in cases of bad faith, reporting psychological or sexual harassment cannot be penalized. This reason cannot therefore be taken into consideration when assessing any potential misconduct by the apprentice that might justify the judicial termination of the contract at her expense. Since the Court of Appeal failed to establish the apprentice's bad faith, which could only be demonstrated by her knowledge of the falsity of the reported facts, the Court of Appeal's decision was overturned.

Soc. June 10, 2015 (No. 13-25.554) FS-PB:

In this case, an employer challenged the Court of Appeal's ruling that the dismissal was null and void and that the employer was ordered to pay severance pay. The employer argued that the dismissal letter had accused the employee of harassment and that the employer had failed to prove that the accusation was made in bad faith.
The Court of Cassation reiterated that an employee who reports instances of workplace harassment cannot be dismissed on this basis except in cases of bad faith, which can only be established if the employee was aware that the reported facts were false. Consequently, the Court of Cassation upheld the Court of Appeal's decision. Only abuse of freedom of expression justifies dismissal.

Soc. May 6, 2015 (No. 14-10.781) FD:

An employer dismissed an employee for serious misconduct after he made comments in two articles published on a website. The employee then challenged the termination of his contract before the labor court.
The Court of Appeal ruled that the dismissal was not based on serious misconduct or a genuine and serious cause, since an employee's questioning, within the context of a conflict and via a website of a largely confidential nature, about the dismissal of a colleague, without the comments in question being insulting or offensive, did not exceed the limits of freedom of expression.
The Court of Cassation upheld the ruling and clarified that employees' freedom of expression outside the workplace can only justify dismissal if it degenerates into abuse.

Refusal of the employee returning from sabbatical leave to take up a similar position

Soc. June 3, 2015 (No. 14-12.245) FS-PB:

Upon returning from sabbatical leave, the employee's position having been permanently filled, she was offered several positions, which she refused, before being dismissed. The employee then filed a claim with the labor court, arguing that her dismissal was without just cause.
The Court of Appeal rejected her claim, given that the employee's previous position was no longer available and that she had refused several job offers with characteristics equivalent to those of the position she held before her leave.
The Court of Cassation reiterated that, upon returning from sabbatical leave, the employee must be reinstated to their previous position or, failing that, a similar one, and dismissed the appeal.

Economic dismissal:

Role of the labor inspector

CE 22 May 2015 (no. 371061):

In this case, a request for authorization to dismiss a protected employee, based on the cessation of activity of the company in judicial liquidation, was submitted to the labor inspector. The inspector noted that the commercial court's judgment ordered the liquidation of the company with cessation of activity and concluded that the economic grounds for dismissal were established.
The Council of State points out that where the commercial court has not authorized the continuation of activity under the conditions stipulated in Article L. 641-10 of the Commercial Code, the judgment initiating the judicial liquidation results in the total and definitive cessation of the company's activity. However, it is incumbent upon the labor inspector to take into account, at the time of their decision, all legal or factual elements gathered during their investigation that might preclude the proposed dismissal. In particular, if the transfer of the company's rights and assets was accompanied by a resumption, even partial, of the activity, under conditions involving a transfer of the employee's employment contract to a new employer pursuant to Article L. 1224-1 of the Labor Code, such a circumstance prevents the requested dismissal.

Effects of administrative authorization

Soc. May 27, 2015 (n°13-26.985) FS-PB:

In this case, a company undergoing insolvency proceedings had dismissed several protected employees for economic reasons. These employees challenged their dismissal, arguing that the national or regional joint employment committee, as stipulated in the National Interprofessional Agreements (ANI) of February 10, 1969, and December 31, 1986, had not been consulted. The Court of Appeal rejected their claims for damages for unfair dismissal on the grounds that the ANI of February 10, 1969, had not been extended. The
Court of Cassation, seized by the same employees, dismissed the appeal against the Court of Appeal's decision on the grounds that, when administrative authorization has been granted, the principle of the separation of powers precludes the civil courts from ruling on the employer's compliance with the obligations imposed by collective bargaining agreements prior to dismissal, in order to facilitate redeployment.

Order of layoffs

Soc. May 27, 2015 (n°14-11.688) FS-PB:

The Court of Cassation has rejected the appeal of a company that had carried out redundancies and was contesting the appellate court's ruling ordering it to pay a former employee compensation for failing to comply with the order of dismissal criteria.
This employer had classified employees performing similar functions on machines of different generations into two separate professional categories without demonstrating that the use of either machine required specific basic training or additional training exceeding the minimum adaptation requirements. The Court of Appeal had therefore deemed the application of the order of dismissal criteria in each category irregular.

Date of inclusion of staff

Soc. June 10, 2015 (No. 14-10.031) FS-PB:

The liquidator of a company dismissed its employees after the voluntary implementation of a job protection plan. Considering the job protection plan insufficient, the employees brought the matter before the labor court. As
the company had fewer than 50 employees at the time the dismissal procedure was initiated, the Court of Appeal and subsequently the Court of Cassation ruled that the voluntary job protection plan did not have to meet the requirements of Articles L. 1233-61 and L. 1233-62 of the French Labor Code.

Compensation for an employee who was irregularly retired

Soc. May 19, 2015 (n°13-27.763) FS-PB:

In this case, within the framework of a collective redundancy plan following a job protection plan, a protected employee was summoned to a preliminary interview and then relieved of duties. As the administrative authorization for dismissal was refused, the employee was retired. He then brought a claim before the labor court seeking to have his dismissal reclassified as an unfair dismissal for economic reasons.
The Court of Appeal rejected his claims, but the Court of Cassation overturned the appeal court's decision, finding that the employer had waited until the end of the employee's protected period to terminate the employment contract under the guise of a retirement that did not meet legal requirements. This termination was part of the collective redundancy plan following the decision to close the site, which necessarily deferred the implementation of the commitments made in the job protection plan for this employee.

Compensation for employees in the event of a change of employer: validity of cumulative compensation

Soc. June 10, 2015 (No. 13-27.144) FS-PB:

In this case, the employees of a company that had sold its research and development business had formally terminated their contracts with the previous company before being hired by the buyer. The buyer ultimately dismissed all the employees for economic reasons and reached settlement agreements with each of them. Believing that the company had reduced its workforce by at least ten employees over a thirty-day period without any job protection plan and without following the required procedure, the employees filed claims with the labor court seeking the annulment of the terminations of their employment contracts or, alternatively, their reclassification as dismissals without just cause and the payment of various sums.
The buyer, ordered by the Court of Appeal to pay various sums, is appealing this decision to the Court of Cassation. In support of its claim, the assignee argued a violation of the principle of full and adequate compensation for damages resulting from the inclusion of employees' entire length of service when calculating severance pay.
The Court of Cassation upheld the appeal court's decision, finding that, since Article L.1224-1 of the French Labor Code was not applicable and each employer had signed separate employment contracts with the employees, the employees were entitled to compensation for damages resulting from the termination of these different contracts, regardless of whether the second employer had taken over their previous seniority.

Principle of the uniqueness of the instance

Soc. June 10, 2015 (No. 13-26.638) FS-PB:

Invoking a violation of the principle of "equal pay for equal work," an employee placed on early retirement filed a claim with the labor court seeking payment of back wages and a supplementary retirement allowance. The Court of Appeal upheld the employee's claim, who then filed another claim with the labor court seeking a judgment against his employer for payment of contributions owed to the Agirc supplementary pension scheme, adjustment of contributions to the supplementary pension scheme based on back wages, payment of back early retirement pensions, and damages.
According to the Court of Appeal, these claims stemmed from the employer's enforcement of the judgment against him and granted them.
The Court of Cassation reiterates that proceedings can only be initiated after initial proceedings before the labor court if the basis for the new claims arose or became apparent after the conclusion of the original proceedings. Consequently, the Court quashes the judgment insofar as it considers that the employee could have presented all these claims during the initial proceedings, meaning that the basis for these claims for payment of contributions arose before the closing of arguments before the Court of Appeal hearing the initial case.

Payment for unused contractual leave

Soc. May 12, 2015 (n°13-20.349) FS-PB:

In this case, an employee appealed the lower court's decision dismissing his claim for payment of outstanding quarterly leave. According to the employee, in the event of a dispute concerning leave, the burden of proof lies with the employer to demonstrate that it has taken the necessary steps to ensure the employee can effectively exercise their right to leave.
The Court of Cassation noted that contractual leave is provided in addition to annual paid leave, which has a minimum duration of four weeks, and dismissed the appeal. Therefore, it is incumbent upon an employee seeking payment for unused contractual leave to prove that they were unable to take it due to the employer's actions.

Scope of the mandate to take legal action granted to the CHSCT

Soc. May 19, 2015 (n°13-24.887) FS-PB:

In this case, the Health, Safety and Working Conditions Committee (CHSCT) of an establishment had decided to commission an expert assessment to study employee exposure to certain risks. The company then filed a request with the High Court to annul this decision.
The Court of Appeal granted this request, which was subsequently appealed by the CHSCT to the Court of Cassation. The defendant raised the issue of the admissibility of the appeal. He argued, in particular, that the power granted by the CHSCT to "carry out any representational action" was worded too broadly and did not clarify the scope of the representation
in question. The Court of Cassation responded that "the mandate given by the CHSCT to one of its members to take legal action in a specific matter authorizes that member to appeal the decision rendered in that action." Consequently, by the resolution adopted within the framework of the expert procedure, the CHSCT mandated its representatives to take all legal measures relating to its execution, which includes appeal to the Court of Cassation.

Adaptation period to a new position

Soc. May 20, 2015 (n°13-13.967) FS-PB:

In this case, three months after the re-evaluation of one of its employees' positions, an employer indicated a six-month adaptation period, which it subsequently wished to extend. The employee refused this extension and then refused two job offers with a lower classification. The employee ultimately acknowledged the termination of her employment contract and brought the matter before the labor court.
The Court of Appeal held that the termination had the effects of a resignation, as the employee failed to demonstrate that the adaptation measure had been unilaterally imposed by the employer or that it was illegal.
Based on the applicable provision of the collective bargaining agreement, the Court of Cassation overturned the Court of Appeal's decision. The Court noted that the very wording of the provision establishing an adaptation period in the event of a change of class or function allows both the company and the employee sufficient time to reflect. According to the Court, this implies a change of position and class, but in this case, the employer notified the employee of the probationary period at a time clearly after the change of class.

Methods for calculating the amount of severance pay

Soc. June 3, 2015 (No. 13-26.799) FS-PBR:

In this case, a journalist entered into a termination agreement with his employer and then filed a claim with the labor court seeking a ruling that the termination had the effects of a dismissal without just cause.
The Court of Appeal upheld the employee's claims, holding that the severance pay provided for in Article L. 7112-3 of the French Labor Code constituted severance pay within the meaning of Article L. 1234-9 of the same Code, which the termination agreement could not deviate from to provide for a lower amount than that to which he was entitled under Article L. 7112-3.
The Court of Cassation, however, held that Article L.1237-13 of the French Labor Code refers only to the provisions of Article L.1234-9, and therefore the calculation of the minimum severance pay is that provided for in Articles R.1234-1 and R.1234-2 of the French Labor Code.