Newsletter No. 96 – December 2016

The Supreme Administrative Court reverses its prior case-law, by considering that the authorization of the labour inspectorate for the dismissal of protected employees “is required if the employee benefits from the protection pertaining to the office upon the sending by the employer of the letter inviting the employee to the pre-dismissal meeting”. Therefore, the labour inspectorate must retain “the date when the employer sends the invitation to the pre-dismissal meeting to the employee” to determine whether he is competent to rule on the authorization dismissal request and not upon the date when he reaches his decision (Sup. Adm. Court, 23 November 2016, n°392059).

A non-compete provision forbade the former employee of an investment company to carry out “any function of a similar kind within a competitor company” and extended geographically to “Paris, the United Kingdom and Switzerland”. The former employee settled in Belgium to carry out his activity and claimed the payment of the financial consideration of the non-compete provision, which he considered having observed. The Supreme Court acceded to his claim, after stating anew that “a non-compete provision, which restricts the principles of the fundamental freedom to carry out a professional activity and the freedom to carry out business, cannot be extended beyond what it provided for” and that, in this case, “it did not forbid the employees to prospect their former employer’s clients” (Sup. Court, Lab. Section, 23 November 2016, n°15-13.707, 15-13.708).

In this case, two collective bargaining agreements instituted a difference in treatment between executives and non-executives with respect to the base to calculate of the remuneration evolution bonus. The Court of appeal had considered that the employer did not put forward any objective and relevant reason so as to justify such difference. The Supreme Court squashes the decision, after stating anew, on the one hand, that “differences in treatment between professional categories made through (…) collective bargaining agreements negotiated and signed by representative trade unions (…) are presumed justified” and, on the other hand, that it is “incumbent upon the one who challenges them to prove that these are not related to any professional consideration” (Sup. Court, Lab. Section 1^st December 2016, n° 15-17.461, 15-17.462, 15-17.463, 15-17.464).

Pursuant to the provisions of Article L.1237-12 of the Labour Code, the parties agree to terminate the employment contract during one or several meetings. Although the law does not require any specific formality as to the holding of this meeting, the Supreme Court states for the first time that “failure to hold this or these meetings as provided for by the first of these texts, relating to the conclusion of a termination agreement, triggers nullity of the agreement”. Nevertheless, it states that “it is up to the one invoking this cause of nullity to establish the existence thereof.” In this case, it is therefore up to the employee invoking the failure to hold a meeting to prove that no meeting was organized (Sup. Court. 23 November 2016, n°14-26.398 and 15-18.092).

The Constitutional Court ruled that the definition of the whistleblower (“an individual who discloses or reports, in a selfless way and with good faith,” facts which they personally have “had knowledge of”) and the three-stage reporting process (with the employer, then with an administrative or judiciary authority and, lastly, in the absence of processing, with the public). The employers, whether public or private, of at least 50 employees, will have to implement “appropriate procedures for collecting reports by members of their staff or by external and occasional associates”, according to modalities which will be set forth by an upcoming decree. This text also provides for the control of the remuneration of corporate officers of listed companies, henceforth conditioned upon the binding vote of the shareholders (Law n°2016-1691 of 9 December 2016, OJ 10 December, Law n°2016-1690, OJ 10 December, CC n° 2016-741 and n°2016-740 D of 8 December 2016).

The decree is published for the application of the “Job Act” of August 8th 2016. Pursuant to Article L. 4614-13 of the Labour Code in its now applicable version, the employer who intends to challenge the recourse by the Hygiene, Security and Working Conditions Committee to an appraisal (the need thereof, the appointment of the expert, the forward-looking cost of the appraisal, its scope or its deadline) must bring a claim before the judge within 15 days as from the Committee’s decision. The decree indicates that these disputes fall within the jurisdiction of the chairman of the Court of First Instance (who must rule on the case within 10 days following the claim) and that an appeal before the Supreme Court can be made against the judgment within 10 days as from notification. The decree also provides that in case the final cost of the appraisal, the Court of First Instance also has jurisdiction (D. n°2016-1761 of 16 December 2016, OJ of 18 December).

The decree is also published for the application of the “Job Act”, which provides that the employer can unilaterally decide to have recourse to electronic vote for the elections of the staff delegates and the works council (until now a collective bargaining agreement was required). Henceforth, “failing any agreement, the employer can decide this recourse, which is also applicable, as the case may be, to partial elections unfolding in the course of the term of office”, “without prejudice to any provisions relating to the pre-election agreement”. It should be noted that “the electronic vote does not preclude the vote through secret ballot with envelops if the agreement or the employer does not exclude such modality”. Specifications will have to be set up as part of the agreement or, failing any such agreement, by the employer and will have to be at the employees’ disposal (D. n°2016-1676 of 5 December 2016, OJ of 6 December).