Newsletter No. 113 – May 2018

In this decision of 3 May 2018, the French Supreme Court (Cour de cassation) states as a reminder that any action relating to the performance or termination of an employment contract shall be extinguished two years after the day on which he who exercises it became aware or should have become aware of the facts allowing him to exercise his right.  It results therefrom that « the period of limitation of a conversion action of a CDD into a CDI, based on the absence of an indication in the contract likely to entail its conversion, runs from the conclusion of the contract” (Cass. Soc., 3 May 2018, No. 16-26.437).

An employee referred a case to the labor court regarding the conversion of her CDD into a CDI based on the absence of indication, in her employment contract, of the replaced employee’s qualification, a criterion which is nevertheless legally compulsory.  The Cour de cassation considered that a Court of appeal could not grant such an application “where it has noted, in the litigious contracts, an indication of the duties of advanced laboratory technician of the replaced employee and that this indication referred to a professional qualification resulting from the job classification table attached to the company agreement” (Cass. Soc., 3 May 2018, No. 16-20.636).

In this case, two employees had been dismissed for inaptitude following an occupational accident.  They referred the case to the labor court requesting compensation for the damage resulting from the contract termination.  As for the employer, he considered that the labor court had no jurisdiction, since the request aimed at compensating a loss resulting from the occupational accident and that it was within the jurisdiction of the social security tribunal (TASS).  The Cour de cassation, by three “PBRI” decisions, considers that “if compensation for damage resulting from an occupational accident, be it or not a consequence of the employer’s failure to fulfill his safety obligation, is within the exclusive jurisdiction of the social security tribunal, the labor court only has jurisdiction to rule on the merits of the termination of the employment agreement and to grant, as the case may be, compensation in case of a dismissal without real and serious cause”.  After having stated the jurisdiction rules of the tribunals, the High jurisdiction rules, referring to article L. 1411-1 of the Labor code, that “a dismissal for inaptitude lacks real and serious cause when it is proven that the inaptitude was the consequence of a prior breach from the employer which caused it” (Cass. Soc., 3 May 2018, No.  16-26.850, 17-10.306, 14-20.214).

Due to the infringement of the right to work, the non-compete clause was coupled with, by case law, an obligation for the employer to pay a pecuniary consideration to the employee.  In this case, the Cour de cassation was requested to address the question of whether the regime of the non-compete clause was transposable to a clause forbidding the employee, after termination of his contract, from taking out a patent in his name or in a third party’s name for an invention designed during the performance of his employment contract. On 3 May 2018, the Cour de cassation pronounced a judgement refusing to extend the regime of the non-compete clause to the clause of no patent application.  It concludes that the employer is not bound to provide for a financial consideration for such obligation (Cass. Soc., 3 May 2018, No. 16-25.067).

It is established case law that the duty of loyalty, binding the employee during the whole performance of his employment contract, remains during the employment contract suspension periods, such as sick leave or layoff.  Indeed, during these periods, the employee refrains from carrying an activity competing with that of the employer or from committing disparagement acts.  In a decision of 16 May 2018, the Cour de cassation provides a new illustration of compliance with this duty, by extending it to the hypothesis of an employment contract suspension due to the holding of a corporate office.  It results therefrom that in case of a removal from the corporate office and on returning to the employment contract, the employer shall be able to punish with disciplinary sanctions a breach to the duty of loyalty during the holding of the corporate office and the suspension of the employment contract (Cass. Soc., 16 May 2018, No. 16-22.655).

The law of modernization of the XXI^st century justice provides for the withdrawal of the social security tribunals (TASS), the incapacity litigation tribunals (TCI) and the social assistance departmental commissions (CDAS) as from 1^st January 2019.  The related disputes shall be transferred towards the designated courts of first instance.  The ordinance of 16 May 2018 relating to the jurisdictional handling of the social security and social assistance disputes brings certain modifications to this reform of social security litigation, which shall come into force at a date set by decree, and at the latest on 1^st January 2019.  As from this date, there shall be a procedure common to all disputes with a medical nature (Ord. No. 2018-358 of 16 May 2018, Official Journal of 17 May).

Since 1^st September 2017, concluded collective agreements (branch, company, establishment…) must be made public by their filing.  It is thus in consistency with this evolution that the decree of 15 May 2018 issued in application of the Labor law of 8 August 2016, relating to the company agreements filing procedure, now officially states the dematerialization of the filing of these agreements, except for branch agreements.  The decree also specifies that it is for the legal representative of the concerned group or company to file the agreements, along with accompanying documents, on the on-line procedure platform of the ministry of Labor.  This obligation concerns the agreements signed as from 1st September 2017 (D. No. 2018-362 of 15 May 2018, Official Journal of 17 May).

A decree of 9 May 2018 institutes new conditions of application aiming at guaranteeing the equivalence between sending an electronic registered letter and sending a paper registered letter.  This decree, issued in application of article 93-1 of the law dated 7 October 2016 for a Digital Republic, shall come into force as from 1^st January 2019 (D. No.  2018-347 of 9 May 2018, Official Journal of 12 May).