Employment Update France November 2006

22 November 2006

Christopher Ivey

New legislation

Older workers: As part of the Prime Minister’s “older workers plan”, a specific fixed term contract has been introduced and integrated into the Labour Code. The contract will apply when hiring any person over 57 years old who has either been unemployed for a period of over three months, or who is subject to a personalised redeployment agreement as a result of redundancy. The term of such a contract is initially 18 months but can be extended to a maximum term of 36 months. This is longer than the traditional 18 month fixed term contract. As is the case for all fixed term contracts, at the end of the contract, employees will be entitled to a bonus of 10% of the total gross salary paid under the contract.

The hotel/café/restaurant industry’s 39 hour week rejected: The Conseil d’Etat has repealed the legislation which implemented the hotel/café/restaurant industry-wide collective bargaining agreement provisions for a 39 hour working week. Employees will still have the opportunity to work longer hours, but any hours worked above the new 35 hour threshold must now be treated as overtime. The Conseil d’Etat’s decision applies retroactively, and will therefore no doubt result in claims for payment of overtime for hours worked over this 35-hour threshold going back to 1 January 2005 when the agreement came into force. Employees in the hotel/café/restaurant industry are also likely to lose their sixth week of annual leave and the two public holidays which were provided by the former agreement.

Case update

Calculation of length of service in the event of dismissal: In Paramétric v Virlouvet, the Cour de Cassation held that length of service is calculated on the basis of the date on which a dismissal letter is sent, rather than the date on which it is presented at the employee’s home (as was the previous position). Length of service is an important factor in the calculation of dismissal costs as it determines the applicable procedure, the severance payments due under the applicable collective bargaining agreement or law, the length of notice to be worked and the penalties due in the event that the procedure is not adhered to.

Employee’s documents and files are presumed to be professional: Case law of 2005 stated that employers are prohibited from opening files marked as personal in the employee’s absence except in exceptional circumstances. Further to this, the Cour de Cassation has held, in two cases on 18 October 2006 that documents or files which are not specifically marked as being personal are presumed to be professional. Unless the employee expressly marks documents or files as personal, any documents or files which are in the employer’s offices or on a computer belonging to the employer may be accessed by the employer without the employee’s presence being required.

The risk of conflict of interest does not constitute valid grounds for dismissal: In Mader v Dekra Veritas Automobiles, an employee was dismissed on the basis that he had not informed his managers that his wife held a significant stake in a company which had recently been integrated into the network for which he was responsible. The employer claimed that the employee had breached his obligations of good faith and loyalty, and thus dismissed him for serious misconduct. The Cour de Cassation held that an element of an employee’s personal life may only justify their dismissal if it is actually detrimental to the company. The mere risk of detriment is not sufficient.

Employees must be provided with written redeployment proposals: In pursuance of the Labour Modernisation Act of 17 January 2002 (incorporated into the Labour Code), employers who intend to implement redundancies on economic grounds must provide “written and precise” redeployment proposals to affected employees. In the recent case of Association Revivre, the Cour de Cassation held that where the redeployment proposals were not provided to the affected employees in writing, the employer was considered not to have fulfilled its redeployment obligations. The redundancy in this case was therefore held to be unfair on the basis of a breach of procedural obligations. This case follows the Cour de Cassation decision of 7 July 2004, where it was held that redeployment proposals must be “precise, tangible and personalised”. These two cases make it clear that employers must send written redeployment proposals to each employee individually.