1. Non-compete clause: reduction of compensation depending on the method of contract termination
2. Increased seasonal activity as a reason for using fixed-term contracts
3. Nullity of dismissal: refusal of the protected employee to return to their position and cap on compensation
4. Cap on compensation in the event of a justified resignation
5. Protected employee: Notification of protection to the new employer
6. Job security: impact of the method of termination
7. Posting and monitoring of working hours
8. Consequences of the cancellation of the elections of staff representatives and works council members on the appointment of the health and safety committee
9. Example of recognition of a single economic and social unit (UES
) 1. Reduction of the non-compete clause depending on the method of contract
termination April 9, 2015 (No. 13-25.847) FS-PB:
In this case, the employment contract included a non-compete clause with financial compensation set at 25% of the average salary received over the previous 24 months in the event of dismissal and 10% in the event of resignation.
The parties having signed a termination agreement, the employee brought the matter before the labor court, notably requesting payment of the financial compensation stipulated in the non-compete clause. The Court of Appeal held that an employee who resigns and one who signs a negotiated termination agreement both demonstrate the same intention to leave the company and therefore set the financial compensation for the non-compete clause at the amount stipulated in the event of resignation.
The Court of Cassation, on the contrary, emphasized that any reduction by the parties, in the case of a specific method of termination of the employment contract, of the financial compensation for a non-compete clause must be deemed null and void. Consequently, the Court of Cassation held that the Court of Appeal, which refused to apply the 25% compensation (which is not subject to reduction by the judge and entitles the employee to paid leave), violated Article L.1121-1 of the French Labor Code and the fundamental principle of the freedom to pursue a professional activity.
It is therefore not possible to vary the amount of financial compensation for the non-compete obligation based on the method of termination.
2. Reason for using a fixed-term contract. French Supreme
Court (Soc. 25 March 2015, No. 13-27.695) FS-PB:
An employee was hired on a fixed-term contract for a period of three months to address a temporary increase in activity resulting from an order. It was stipulated that the contract could be renewed for an equal or longer period, not exceeding eighteen months in total. During a period of sick leave following a workplace accident, the employer informed the employee that his contract would end on the originally scheduled date.
The employee then filed a claim with the labor court seeking to have his fixed-term contract reclassified as an open-ended contract. In support of his claim, the employee argued, among other things, that his contract had been entered into to fill a position corresponding to the company's normal business activity and should therefore be reclassified.
The Court of Appeal rejected the claim for reclassification based on the existence of a seasonal need.
The Court of Cassation dismissed the employee's appeal. According to the Court, “ after noting that the employment contract had been concluded (…) to address a temporary increase in activity and that the employer was engaged in the usual activity of handling tires, the Court of Appeal, having observed the existence, even if linked to additional production adapted to winter, of an increase in activity during the period for which the contract had been concluded, legally justified its decision without altering the subject matter of the dispute .”
3. Refusal of an employee whose dismissal is null and void to return to their position and cap on compensation.
Soc. April 15, 2015 (No. 13-24.182) FS-PBR:
An employee, an alternate staff representative, was declared permanently unfit for her position and subsequently dismissed for incapacity and impossibility of reassignment without the employer having sought authorization from the labor inspector. The employee brought a claim before the labor court seeking to have her dismissal overturned.
The Court of Appeal upheld the employee's claim and ordered the employer to pay her compensation equivalent to the salary she would have received until the end of the protected period, i.e., forty months' salary.
The employer then challenged this ruling on the grounds that an employee whose dismissal is deemed null and void and who refuses reinstatement waives their right to invoke the nullity of the termination.
The Court of Cassation partially overturned the judgment. It first reiterated that an employee whose dismissal is deemed null and void may refuse reinstatement offered by the employer without thereby waiving their right to invoke the nullity of the termination.
However, the Court of Cassation overturned the employer's order to pay compensation equivalent to forty months' salary. According to the Court of Cassation, a staff representative who does not request the continuation of an illegally terminated employment contract is entitled to compensation for violation of their protected status equal to the remuneration they would have received from their dismissal until the expiration of the protected period, up to a limit of two years, the minimum legal duration of their mandate, plus six months.
The compensation is therefore capped at 30 months' salary, although the 2005 law increased this cap from two to four years.
4. Resignation of a protected employee: amount of compensation
. French Supreme Court (Cour de cassation) April 15, 2015 (No. 13-27.211) FS-PBR:
An employee who had been summoned to a preliminary interview was elected staff representative. When authorization for dismissal was refused, the employee ultimately resigned and brought the matter before the labor court.
The Court of Appeal held that the employee's resignation was justified and had the same effect as a wrongful dismissal. Consequently, it ordered the employer to pay compensation equivalent to fifty-two months' salary.
The Court of Cassation overturned the Court of Appeal's decision. According to the Court, a staff representative whose resignation has the same effect as a wrongful dismissal when the alleged facts justified it is entitled to compensation for violation of their protected status equal to the remuneration they would have received from their removal until the end of the protected period, up to a maximum of two years, the minimum legal term of their mandate, plus six months.
The compensation is therefore capped at 30 months' salary, although the 2005 law increased this limit from two to four years.
5. Transfer of the protected employee
. April 15, 2015 (No. 13-25.283) FS-PBR:
The Court of Cassation clarifies that in the event of a transfer, the mere continuation of the employment contract pursuant to Article L. 1224-1 of the French Labor Code does not automatically make the new employer aware of any protection afforded to an employee by virtue of an external mandate.
It is therefore incumbent upon the employee claiming such protection to establish that they informed the new employer of the existence of this mandate no later than the preliminary dismissal interview, or, if the termination does not require a preliminary interview, no later than before notification of the termination, or that the new employer was aware of it.
6. Job security clause
. April 15, 2015 (No. 13-21.306) FS-PB:
In this case, an employee on sick leave and then on disability was dismissed for incapacity and impossibility of reassignment. The Court of Appeal ordered the employer to pay various sums, notably in execution of a job security clause.
According to the Court of Cassation, " a contract containing a job security clause may only be terminated during the period covered by the guarantee in the event of agreement between the parties, serious misconduct by the employee, or force majeure ." It follows that the termination, which originated in a situation of workplace harassment suffered by the employee, did not stem from any of these causes, thus justifying the employer's liability.
7. Posting and monitoring of working hours
(Crim.) April 14, 2015 (No. 14-83.267) F-PB:
In this case, a labor inspector noted the failure to record or post working hours and reminded the employer, by letter, of their obligations in this matter. As the employer did not respond, a reminder letter was sent. The labor inspector then conducted a follow-up inspection during which, in the employer's absence, the employee stated that working hours were neither recorded nor posted. Considering that he was unable to monitor and verify the actual working hours, the inspector issued a report for obstruction. The employer was then found guilty of this offense by the court and appealed the judgment. The Court of Appeal acquitted the defendant.
The Court of Cassation notes that the defendant had been repeatedly reminded to fulfill his obligations to allow for the monitoring of the application of provisions relating to working hours and their organization on the farm he managed, and that these reminders had remained without effect. Consequently, the Court quashes the appeal judgment.
8. Consequence of the annulment of professional elections
. Soc. April 15, 2015 (No. 14-19.139) FS-PB:
Staff representatives and members of the works council, members of the employee representative body of a company, proceeded to appoint the members of the Health, Safety and Working Conditions Committee (CHSCT). The elections of the staff representatives and works council members having been annulled, employees requested the annulment of the appointment of the CHSCT members.
According to the Court of Cassation, the annulment of the elections of works council members and staff representatives only deprives elected employees of their status as members of these employee representative bodies from the date the annulment is pronounced. Consequently, the annulment of the elections of staff representatives and works council members on April 1, 2014 , had no bearing on the validity of the election of members of the Health, Safety and Working Conditions Committee (CHSCT) held on March 31 of the same year.
9. Definition of an Economic and Social Unit (ESU)
Soc. April 15, 2015 (No. 13-24.253) FS-PB:
The employees of a company were transferred and distributed among four companies, the first of which was the sole shareholder. A union and an employee then brought an action before the district court to have an ESU recognized among these four companies. The Court of Appeal granted this request.
The Court of Cassation upheld the ruling. In support of its decision, the Court notes, firstly, the concentration of power by the company, the sole shareholder of each of the four companies, and their complementarity in that they all contribute to the renovation of gas pipelines and high-voltage power lines for the benefit of ERDF and GRDF. Secondly, it notes that the employees, all from the same company and holding similar employment contracts, are mobile between the companies in question, are subject to the same collective bargaining agreement, and benefit from identical specific advantages.
