Labor Law Newsletter, February 2025
Case Law
Clarifications on the Social Security Treatment of Settlement Payments
The Court of Cassation has recently provided important clarifications regarding the social security treatment applied to settlement payments made following a termination of employment.
In principle, a settlement payment following a termination is considered a supplement to severance pay and is subject to the social security regime for severance pay, which is exempt under certain conditions, notably up to two annual social security ceilings (2 PASS, or €94,200 in 2025).
The Court of Cassation confirms that the settlement payment may be exempt from this regime and be fully exempt from social security contributions when its purpose is to compensate for damages.
In this case, the compensation was awarded to remedy the damages—particularly moral and professional—that the employee sought to claim due to the conditions under which he had performed his duties and had been deprived of his employment, which allowed the compensation to be exempt from social security contributions.
Cass. 2ème civ., 30 janvier 2025, n°22-18.333
Establishment of the Concept of “Institutional Psychological Harassment”
In a case involving France Télécom, the Criminal Chamber of the Court of Cassation established the concept of “institutional psychological harassment” and held two of its executives criminally liable.
The Court of Cassation defines institutional psychological harassment as “conduct that defines and implements a corporate policy aimed at structuring the work of all or part of a group of employees, conduct which, through its repetition, latently or concretely entails a potential or actual deterioration the working conditions of that group and which exceed the limits of managerial authority,” and considers that these actions fall within the scope of Article 222-33-2 of the Penal Code, which punishes acts constituting psychological harassment.
Thus, company executives may be held accountable for acts of psychological harassment that result not from individual relationships with their employees, but from the corporate policy they devise and implement.
Cass. Crim., 21 janvier 2025, n°22-87-145
Distinction between an employee’s “right to privacy” and an employee’s “personal life”
The Court of Cassation draws a distinction between an employee’s “right to privacy”—the violation of which renders a disciplinary sanction null and void because it constitutes a fundamental freedom—and an employee’s “personal life,” the violation of which merely deprives the termination of a valid and serious cause.
It thus considers that an employee’s possession of narcotics in his personal vehicle on a public road—the grounds for dismissal attributed to the employee—falls within the scope of the employee’s personal life but not his private life, which therefore precludes the dismissal from being null and void.
The Court nevertheless ruled that the dismissal lacked real and serious cause because it did not constitute a breach by the employee of an obligation arising from his employment contract.
Thus, the privacy of one’s private life (e.g., romantic relationships, family ties, sexual relations, confidentiality of correspondence, inviolability of the home) encompasses a narrower and more protected concept than one’s personal life.
Cass. Soc. 25 septembre 2024, n° 22-20672
The Concept of Executive Status and Fixed-Day Agreements
The Court of Cassation holds that the conclusion of an annual fixed-day agreement, even if subsequently declared unlawful or void, does not allow the employer to invoke the employee’s status as an executive to deny the employee’s right to overtime pay.
Cass. Soc., 20 novembre 2024, n°23-17.881
A pre-election memorandum of understanding cannot require unions to alternate women and men on their candidate lists
Since Article L.2314-30 of the Labor Code, which is a matter of absolute public policy, does not require an alternating order of male and female candidates when drawing up candidate lists, a pre-election memorandum of understanding cannot impose such a requirement on trade unions.
Cass. Soc., 8 janvier 2025, n°24-11.781
Regulatory
2025 Social Security Financing Bill (PLFSS 2025): The 2025 Social Security Financing Bill (PLFSS 2025) was definitively adopted on February 18, 2025; we will discuss this further in the next issue.
Use of meal vouchers for all food products in 2025 and 2026
Law No. 2025-56 of January 21, 2025, extended for two years the special provision allowing employees to use meal vouchers to purchase food products not intended for immediate consumption.
Employment of foreign workers
An executive order dated January 3, 2025, updated the list of documents employers must submit when applying for work permits for foreign workers. Employers must now provide:
- if the recruitment plan is subject to the employment situation requirement, a copy of the job posting filed with a public employment service agency, in addition to the documents already required;
- proof of payment of social security contributions to the agency responsible for their collection, dated within the last 6 months.
If the recruitment is for seasonal employment, the employer must also provide:
- regarding information on the employee’s housing: a sworn statement that the employee will have access to decent housing, including the exact address of the residence, as well as a copy of both sides of the employer’s identification document;
- a copy of the employment contract, signed by the employer and the employee, corresponding to the position for which authorization is requested.
Apprenticeship Assistance for People with Disabilities
Agefiph is maintaining the maximum assistance amount at €3,000 for hiring a person with a disability under an apprenticeship or professional training contract.
