Case law selection - France / Second semester 2021

This newsletter summarises four significant judicial decisions over recent months:

• The payment of a performance bonus cannot be conditional on the employee's continued employment at a given date (Cass. soc., 29-9-2021, n° 13-25.549)

An employee's contract provided for an annual incentive bonus if she achieved certain sales objectives. However, it also provided that the payment of the bonus was conditional on her being employed by the company on 31 December of the year in question. When she was dismissed during the course of a calendar year, her employer refused to pay her the contractual bonus for that year. The employee brought an action before the Labor court to claim the bonus in respect of the sales objectives already achieved before she left her job.

Her request was rejected by the appeal judges who applied the contractual clause strictly. Since the employee had left the company before 31 December 2010, the employer was not obliged to pay her the bonus for the year 2010. The employee then appealed to the French Supreme Court.

The French Supreme Court agreed with her. It acknowledged that an element of remuneration relating to a period worked may be conditional on the employee being in employment at a certain date . However, it pointed out that the date on which continued employment is required, cannot be later than the date on which the conditions for payment are assessed. Consequently, the Court ruled that performance bonuses are paid in consideration for work done, and that they are therefore vested in proportion to the employee's period of employment by the company during the year in question. Thus, their payment cannot be made conditional on the employee's continued employment on a date subsequent to the employee's departure date.

• A variable remuneration clause which merely specifies that it is to be understood as "paid leave included" is not enforceable against the employee (Cass. soc., 13-10-21, n° 19-19.407)

An employee's contract provided that the variable remuneration to which he was entitled was to be understood as "paid leave included." Following his dismissal, the employee brought an action before the Labor court claiming back pay for paid vacations in relation to his variable pay.

The Court of Appeal granted his request. The judges found that the remuneration clause in the employment contract was neither transparent nor comprehensible, and could therefore not be invoked against the employee, insofar as it merely stated that the variable remuneration included paid leave, without specifying the portion of the variable remuneration which related to paid leave.

The French Supreme Court confirmed this position. While it is possible to include vacation pay in lump-sum remuneration under certain conditions, it must be done transparently and comprehensibly. The provision in this contract stated "paid leave included" without either specifying the split between the remuneration and the paid vacation, or apportioning that remuneration to identified periods of leave which had properly been taken. As such, the provision did not meet the necessary legal conditions, and in particular it did not fulfill the requirement of transparency and clarity. Therefore it could not be enforceable against the employee, who was therefore entitled to back pay for paid leave for the relevant periods.

• A part-time employment contract must specify the days and hours of work (Cass. soc, 17-11-2021, n° 20-10.734)

An employee's contract provided for a monthly working time of 86.67 hours and for time slots during which these hours should be worked. However, it also provided that the employee remained free to choose between morning and afternoon shifts. Following his dismissal, the employee brought a claim before the Labor court to have his part-time contract converted into a full-time contract.

The Court of Appeal rejected the employee's request for reclassification, approving the employer's argument that the distribution of working hours was determined by the monthly working time of 86.67 hours and by the company's working arrangements. The employer argued that he should not be penalized for having given the employee the freedom to choose whether to work morning or afternoon shifts.

The employee appealed to the French Supreme Court, arguing that, without written details of the distribution of his working hours, he was presumed to have a full-time work contract.

The French Supreme Court agreed . Unless certain legal exceptions apply, a part-time contract must specify the distribution of working hours between the days of the week or the weeks of the month. The employment contract in question did not meet these requirements. It was therefore full-time.

• Remote working: an employee is entitled to refuse to come back to the office

Two cases provide helpful clarification on remote working at a time when it is becoming more widespread.

These cases remind us that when the option of working remotely is provided for in a collective agreement or a Company policy, which does not specify anything about the termination of those remote working arrangements, then the arrangements must be terminated by a written agreement between the employer and the employee. Otherwise, the employer cannot force the employee to return to the office.

(CA Lyon, 10-9-2021, n° 18/08845)

Following the birth of a child, an employee and her employer agreed, in an addendum to her employment contract, that she could work remotely. Two years later, the employer asked her to return to work at the company's premises. The employee refused. The employer dismissed her.

The employee challenged her dismissal. The lower court ruled in her favor. The employer appealed, on the basis that the addendum stated the exceptional nature of remote working within the company, and that remote working had been granted to the employee at her request.

However, the Court of Appeal confirmed the ruling of the lower court on this point. In the absence of any specification in the employment contract on the conditions for remote working, in particular on its duration and the circumstances in which it can be terminated, the employer can only modify the arrangement with the employee's agreement. The term 'exceptional' mentioned in the addendum did not indicate, according to the appeal judges, that the parties wished to give this arrangement a temporary character, but only that the employer had accepted 'exceptionally,' and contrary to the company's usual practice, that the employee could carry out her work remotely. Consequently, the employee's dismissal on the sole ground that she refused to return to the office was deemed to be without real and serious cause.

(CA Orléans, 7-12-2021, n° 19/01258)

After many years of working remotely, an employee was asked by his employer to return to work at the company's office two days a week.

The employee brought a claim before the Labor court for judicial termination of his employment contract. The employer argued that no remote working arrangement had been formally put in place. The lower court judges agreed with the employer.

The Court of Appeal disagreed with this reasoning and overturned the decision. It noted, on the one hand, that no place of work was mentioned in the employment contract, and on the other hand, that for many years the employee had worked remotely and had only occasionally visited the office. The employer never disputed this arrangement, which indicated his acceptance of it. The Court considered that by going back on a non-contractual but long accepted remote working arrangement, the employer had changed an essential element of the employment contract, which was likely to disrupt not only the employee's working arrangements but also his personal life . The court found that the employer should have obtained the employee's agreement to his return to the office. The judicial termination of the employment contract was therefore justified and the employee entitled to compensation.

Public link

Please use the above public link if you want to share this noodl on another website.