Social law newsletter, June 2024 – Montaine Guesdon Vennerie & Aymeric d’Alançon
Legislation
Q&A from the Ministry of Labor on Project-Based Profit-Sharing
The project-based profit-sharing scheme allows companies to involve all or some of their employees in a project, whether it is an internal company project or a joint project with other companies.
On April 18, 2024, the Ministry of Labor issued a series of “questions and answers” providing:
- general details on project-based profit-sharing (eligible project types, applicable companies, beneficiaries, implementation, deadlines for conclusion and filing, whether or not a supplementary agreement is required, etc.);
- details on the methods of calculation, distribution, payment, and allocation.
Please note: the project profit-sharing agreement must comply with the principle that it does not replace any existing compensation component within the company or any component that would become mandatory under legal or contractual rules.
Workplace Accident Prevention Plan: 11 New Measures Unveiled by the Department of Labor
Launched in March 2022, the plan to prevent serious or fatal workplace accidents was expanded with eleven new measures by the Department of Labor on April 29, 2024.
These measures are specifically designed to strengthen efforts to prevent occupational risks associated with exposure to extreme heat and to better protect new hires and temporary workers.
Hiring subsidy for professional training contracts to end on April 30, 2024
Since January 1, 2023, companies that hire students in work-study programs—including apprentices and young people on professional training contracts—have been eligible for a hiring subsidy of up to €6,000.
Decree No. 2024-392 of April 27, 2024, specifies that this subsidy will no longer apply to young people on professional training contracts entered into on or after May 1, 2024. However, this hiring subsidy will remain in effect for the recruitment of apprentices.
A proposed law aims to cap severance pay for “risk-takers” in the financial sector
In the proposed law aimed at increasing business financing and France’s attractiveness, the Senate adopted an amendment to cap certain severance payments for risk-takers (traders).
According to the rapporteur, this measure is essential because financial institutions are reluctant to locate in France individuals whose severance costs would not be competitive compared to neighboring countries. The goal is to provide adjustments for specific professions with extremely high salaries.
Jurisprudence
Avoid: Making a Phone Call Before Sending the Termination Letter
If an employer announces a termination by phone before sending the termination letter, the termination lacks a valid and serious cause. Indeed, the reason for the termination must necessarily be notified in writing to the terminated employee. Verbal dismissal amounts to a lack of justification, which is sanctioned by the absence of a valid and serious cause.
In this case, the employee provided evidence that the dismissal had been announced to him by telephone before the letter was sent. The Court of Cassation concluded that the dismissal lacked a valid and serious cause.
Cass. Soc. 3 avril 2024 n° 23-10.931
No notice procedure for a unilateral fixed-term employment contract
A unilateral fixed-term employment contract entered into by the employer automatically ceases to have effect at the end of the term it specifies.
The employer is therefore not required in this case to follow the customary notice procedure, which involves informing the affected employees and employee representatives of the termination within a reasonable timeframe.
Cass.soc. 3 avril 2024 22-16.937
Unrestricted Settlement Before the Conciliation Board
The Conciliation Board has general jurisdiction to resolve any dispute arising out of employment, and the parties may extend the scope of the conciliation to matters other than severance pay.
In this case, the parties had agreed to a lump-sum, final, and comprehensive settlement, and the agreement included a general waiver of all claims and entailed a withdrawal of any litigation arising from the employment contract. Even though the non-compete clause was not expressly mentioned, the Court of Cassation held that this general waiver prevented the employee from bringing a new action for payment of the non-compete indemnity.
Cass. Soc. 24 avril 2024 n° 22-20.472
Indicator of discrimination: the mere status of a disabled worker is not sufficient
An employee who is a disabled worker and who seeks to have a dismissal for incapacity declared null and void on the grounds of disability-related discrimination cannot simply rely on that status.
According to the Court of Cassation, this status alone does not constitute evidence sufficient to suggest the existence of discrimination. In the case of a dismissal for incapacity, the employee must therefore provide evidence of reasonable accommodations that could have been implemented by the employer but were refused, even implicitly.
Cass. Soc. 15 mai 2024 n° 22-11652
