A Legal Update from Labor and Employment Practice Group – Paris

You may have missed some developments in 2014... This legal update brings you some major changes in the second half of 2014 in France in Labor and Employment law. 

(Pour lire la version française, cliquez ici) 

Major Legislative Changes in 2014 

The law on Social and Solidarity Economy of July 31, 2014 – as specified in a decree of October 28, 2014 - highlighted the employer’s duty of disclosure to his or her staff, as well as the role of employees in running the business in three ways: 

• an obligation for companies with less than 250 employees to periodically inform employees of the legal conditions of a company takeover, specifically in relation to the benefits, the challenges, as well as the support mechanisms; 
• an obligation for companies with less than 250 employees to individually inform employees of their option to acquire, before any sale of, either the business assets or over 50% of the company shares giving access to the majority of share capital; 
• reinforcing the employer’s obligation (established on July 1, 2013, under the uncertain legal outlines of the so-called “Florange" Law) to find an investor before any site closure through the introduction of two sanctions: 
  • the refusal of any certification request of a social plan by the French Labor administration (Direccte); 
  • the reimbursement of any public aid that was granted to the employer.

Contributions of the Courts - 2nd Semester of 2014 

The rapid recovery of a company’s economic situation after a reorganization does not invalidate the economic reason for redundancies (French Supreme Court, September 17, 2014, no. 13-19.763) 

Having its competitiveness threatened by the crisis context known in the real estate sector affecting the whole notarial profession, one notarial office proposed to one of its employees a reduction of the weekly working time. She refused this proposed change and has consecutively been made redundant. In the month that immediately followed this reorganization, the office managed to improve its economic situation. 

Whereas the employee appealed to the temporary nature of the difficulties encountered by the office to challenge the validity of her redundancy, the French Supreme Court held that the fact that the company had been able to improve its economic situation in such a short time through the adoption of specific measures, does not invalidate the economic reasons invoked in support of her redundancy for refusal to accept the modification of her employment contract. 

Dismissal must remain a last-resort measure against an employee committing acts that could be characterized as or degenerate into a situation of psychological harassment (French Supreme Court, October 22, 2014, no. 13-18.862) 

After a group of employees raised concerns regarding the authoritarian and inappropriate managerial methods of their supervisor, the employer temporarily laid off the supervisor, then dismissed her for serious misconduct, because of psychological harassment, discriminatory behavior and disproportionate disciplinary measures taken with subordinates. 

In this case, the Supreme Court adopted a surprising position by upholding that, although an employer must take every step to prevent or stop acts of psychological harassment, this does not necessarily imply, however, the termination of the contract of employment of the employee who caused the situation that could be characterized as or degenerate into psychological harassment. 

If, in the current case, the French Supreme Court considered that the qualifications of psychological harassment, discriminatory behavior or disproportionate disciplinary management practices were not characterized and retained only the grievance of authoritarian and inappropriate management, the French Supreme Court determined that even though a situation of psychological harassment had been characterized, if an alternative measure to dismissing the employee committing the act can be considered, this should be preferred. Also, because the employer had not demonstrated, as such, that maintaining the employee who committed the litigious acts was not feasible, the dismissal was considered to not be based on a real and serious cause. 

Requests made in parallel before the French Social security tribunal and before the French Employment tribunal seeking to respectively recognize an occupational illness and the employer's breach of his security obligation are incompatible (French Supreme Court, October 23, 2014, no. 13-16.497) 

After having been declared unfit for work, an aftersales technician was redeployed as an administrative and accounting advisor. This employee then filed a claim before the Social security tribunal to characterize the existence of an occupational illness and to obtain consecutive damages. At the same time, he filed a claim before the Employment tribunal in order to obtain compensation for his employer's breach of his security obligation. 

According to the French Supreme Court, the employee cannot request damages for a prejudice where the cause – namely his illness – requires a prior recognition from the Social security tribunal as being work-related. And this is true regardless of whether or not the employee's claim for compensation before the Employment tribunal covers the prejudice suffered for the period before the declaration of his illness.