July 2024 Labor Law Newsletter – Montaine Guesdon Vennerie and Aymeric d’Alançon
Legislation
Severance Pay for “Risk-Takers”
Law No.2024-537 of June 13, 2024 aimed at increasing corporate financing and France’s attractiveness, was adopted and published in the Official Journal on June 14, 2024.
It modifies the categories of employees considered “risk-takers” for whom severance pay does not take into account their recoverable bonuses.
This category now refers to Commission Delegated Regulation (EU) 2021/923 of March 25, 2021, which has the effect of including personnel performing management functions, particularly in the areas of public affairs, anti-money laundering, and counter-terrorist financing. The quantitative criteria for qualifying as a risk-taker are more restrictive, as one must receive compensation of at least €750,000 or, in a company with at least 1,000 employees, be among the top 0.3% of staff members with the highest compensation.
The law also caps the calculation basis for damages awarded for dismissal without real and serious cause for traders and their managers. The calculation basis for these damages, awarded by the judge and calculated according to the so-called “Macron” scale, is limited by law to the annual social security ceiling (i.e., €46,368 in 2024).
These provisions apply to terminations notified on or after June 15, 2024.
Information to be included in the invitation to negotiate the pre-election agreement (PAP)
Decree n°2024-514 of June 6, 2024 clarified the content of the invitation to trade unions to negotiate the PAP in preparation for the election of the Social and Economic Committee (CSE) in a new Article D.2314-1-1 of the Labor Code.
In addition to the employer’s name, address, and the location, date, and time of the meeting—information that seemed obvious in the absence of specific regulations—the decree adds the title and identifier of the applicable collective bargaining agreement.
Sample letter of information for the employee
An order dated June 3, 2024, established five sample information documents that the employer must provide to every employee.
For the record, pursuant to Law No. 2023-171 of March 9, 2023, known as the DADDUE, the employer must provide the employee with one or more written documents containing the key information regarding the employment relationship.
The nature of the information varies depending on a timeframe calculated from the date of hire and on whether or not the employee is required to work abroad.
The decree therefore establishes five templates: one containing all 14 pieces of information to be provided, one to be provided 7 days before hiring, one 30 days before hiring, and finally one for an employee working abroad and another for an employee on secondment.
Paris 2024 Olympics: Q&A from the Ministry of Labor on Access for Employees and Employee Representatives to Secure Areas
The General Directorate of Labor has published a FAQ on the Ministry of Labor’s website on June 24, 2024, regarding access for employees and employee representatives to secure areas requiring an Olympic Pass.
The FAQ refers to the website www.pass-jeux.gouv.fr to determine the areas and periods during which a pass may be required.
The DGT also addresses the case where an employee refuses to apply for a Jeux Pass. It considers that such a refusal would not be considered a fault unless there is bad faith or intent to cause harm. The employer would be required to find another temporary assignment for the employee. In the absence of such a temporary assignment, the employer would then be released from the obligation to pay wages.
Regarding employee representatives, the DGT confirms that the potential requirement to hold a “Jeux” pass applies despite the freedom of movement they enjoy in the performance of their duties.
It should be noted that this type of FAQ merely reflects the Administration’s position and is not binding on the courts.
Case Law
The Illegality or Unfairness of Obtaining or Producing Evidence
A recording made without the employer’s knowledge during an altercation that occurred within the company in a location open to the public, in full view of everyone, constituted essential evidence for the victim to exercise her right to have recognized both the work-related nature of the accident resulting from this altercation and the inexcusable fault of her employer that caused it, and that the infringement of the privacy of the employer’s executive was strictly proportionate to the objective of establishing the reality of the violence suffered by the victim and contested by the employer. (Cass. 2nd Civ. 6-6-2024 No. 22-11.736 FS-BR).
https://www.courdecassation.fr/decision/6661515cbbc6ae00084dd4b9
Is the social security flat-rate levy applicable to directors’ fees in cases of European mobility for executives?
Yes, according to the Court of Cassation! All public limited companies and professional corporations organized as public limited companies with their registered office in France are subject to the social security flat-rate levy on the total amount of compensation paid to their directors and members of their supervisory boards, regardless of the latter’s nationality or tax residence (Cass. 2nd Civ. 6-6-2024 No. 21-23.396 F-B).
https://www.courdecassation.fr/decision/6661515dbbc6ae00084dd4bb
Sexually suggestive remarks that were not sanctioned in the past may become subject to sanctions:
The fact that an employee repeatedly makes sexually suggestive, insulting, and degrading remarks toward two of his colleagues is such as to constitute, regardless of the employer’s prior attitude, the employer being bound by a duty of care regarding the protection of workers’ health and safety, constitute misconduct that amounts to a genuine and serious cause justifying the dismissal decided by the employer (Cass. soc. 12-6-2024 No. 23-14.292 FS-B).
https://www.courdecassation.fr/decision/66693a4d532c0d0008221b2d
Possibility of Correcting an Inadmissible Mutual Termination Agreement
An application for approval that has been declared inadmissible by the DREETS may be corrected by the employer without having to restart the procedure. Since the refusal of approval does not create any vested rights for the parties to the agreement or for third parties, the DREETS may reverse its initial decision. (Cass. Soc. 06/19/2024 No. 22-23.143 FSD)
https://www.courdecassation.fr/decision/66728100f7ab5c00087309df
Mutually Agreed Termination Equivalent to Resignation
When an employment contract is terminated pursuant to a mutually agreed termination that is subsequently annulled due to a defect in the employer’s consent attributable to the employee’s fraud, the termination has the same legal effect as a resignation. In this case, the employee had concealed his business plan in the same industry sector, i.e., a competing business. He was ordered to reimburse the contractual termination indemnity and to pay compensation in lieu of notice. (Cass. soc. June 19, 2024, No. 23-10.817)
https://www.courdecassation.fr/decision/66728101f7ab5c00087309e1
The Legitimacy of Exercising the Right to Withdraw from Work
The assessment does not involve determining whether the employer has committed a breach, but rather whether, at the time the right was exercised, the employee had reasonable grounds to believe that their work situation posed a serious and imminent danger to their life or health. The employer’s compliance with measures prescribed by government authorities during a pandemic, in light of scientific knowledge and national recommendations, does not preclude the legitimacy of an employee’s exercise of the right to withdraw from work if the employee has reasonable grounds to believe that their work situation poses a serious and imminent danger to their life or health (Cass. soc. June 12, 2024, No. 22-24.598 F-B).
https://www.courdecassation.fr/decision/66693a4b532c0d0008221b2b
