Newsletter on French Employment Law

Discipline: Considering the forthcoming presidential elections, employers should be watchful of ongoing disciplinary cases. If an amnesty law is voted, they may not be able to use such cases to justify certain disciplinary sanctions (including a dismissal).

Mobility: Employers have to inform expatriates of their social security status (notably possible affiliation to a specific insurance covering French expatriates). Failing this, employers could be sentenced to pay potentially significant damages.

Working time remains a major concern for employers in France, including as regards management level executives even though they are not supposed to be subject to working time rules. The French Supreme Court provided two recent cases on this specific category of employees:

• In its decision dated 30 November 2011, the Court decided that even if a written document grants the status of management level executive to the employee, this status shall only be applicable if the employee effectively meets the criteria of the French employment code (i.e. has important responsibilities involving significant independence in their timetable, is entitled to make decisions autonomously and receives amongst the highest salaries within the company). In this case, the employee tried to demonstrate that he was not a management level executive although he was the director of one company and the managing director of three others in a group, controlled every area of these companies, did not receive instructions from anyone and earned the highest salary in the group. The Court ruled that he actually did have the status of a management level executive and rejected his claim for overtime.
• A second decision of 31 January 2012 relates to a very senior executive in charge of menswear in an apparel company, who brought an action before the Employment Court to claim overtime further to her dismissal. The French Supreme Court set out that although the employee met the legal criteria to be qualified as a management level executive, she could not fall within this category as she did not effectively participate in the company’s management. Therefore, in order to validly exclude senior executives from working time regulations, such executives must actually participate in the determination of the financial, social or economic goals of the company.

In light of these decisions, employers should be very cautious when determining which employees should be considered as management level executives.

The length of a trial period should be determined taking into account its aim: to allow the employer to assess the employee’s abilities and to terminate the employment contract easily if it is not satisfied with the employee’s performance. Two recent decisions of 11 January 2012 demonstrate how difficult it is to find the appropriate length.

• The French Supreme Court decided that a trial period of one year, including renewal, was not reasonable. In this case, the employment contract provided a six months’ trial period which could be renewed once, in accordance with the applicable collective bargaining agreement (CBA). The employer terminated the trial period after more than 11 months. The French Supreme Court considered that the termination of the trial period should be viewed as an unfair dismissal. Since 2008, the law expressly sets the maximum length of the trial period and its renewal, but longer trial periods provided in CBAs, in force before the publication of the law, remain applicable. It appears that the French Supreme Court intends to control whether the length of the trial period is reasonable or not, even in cases where the employer has complied with the applicable CBA.
• In another case, the French Supreme Court decided that the employer could not terminate a trial period after only two days of work; in such a short period, the employer could not have had sufficient time to assess the employee’s abilities.

Employers should be careful when enforcing a trial period even within the limit set out by law or by a CBA. It is also necessary to be careful not to terminate the trial period too shortly after the beginning of the employment, so that the employee has sufficient time to show his abilities.

According to case law, an employee who claims to be morally harassed cannot be dismissed on that ground, except when he reported these facts in bad faith.

In a 7 February 2012 case, the French Supreme Court has defined what constitutes “bad faith”, setting out that it only exists when the employee knows that the reported facts are not true.

In this case, a sales assistant had an interview with her manager during the course of which she was told that her behaviour damaged smooth relationships at work. The sales assistant accused her manager of morally harassing her, indicating that after the interview, she was made to work in the shop’s storeroom, far from her colleagues. When the employer asked her for explanations in relation to this contention, the employee refused to answer. The employer dismissed the employee on the ground of her bad faith in claiming that she was a victim of moral harassment. The employee challenged her dismissal, based of the fact that she was not in bad faith as she really believed that the reported facts constituted moral harassment.

The French Supreme Court held that the dismissal was null and void as the employee reported true facts.

Therefore, only employees who know that reported facts are not true are of bad faith and can be dismissed on these grounds.

Employers should be careful before taking any disciplinary actions against an employee who claims to be harassed. In case of litigation, the employer who dismisses an employee having accused it of moral harassment will have to prove that the employee was not reporting true facts.