NewsletterNewsletter No.179 – November 2023
EMPLOYEE INFORMATION: Entry into force on 1 November 2023 of the decree implementing the law of 9 March 2023, transposing the European directive of 20 June 2019, relating to employee information.
Article 1 of the decree specifies the information to be transmitted to employees upon hiring, through the creation of articles R. 1221-34 et seq. of the Labor Code. The employer must, within seven days of hiring, provide the employee with information relating to “1° The identity of the parties to the employment relationship; 2° The place (…) of work; 3° The job title, functions, socio-professional category or employment category; 4° The date of employment; 5° In the case of a fixed-term employment relationship, the end date or expected duration thereof; 7° If applicable, the duration and conditions of the trial period; 11° The elements constituting the remuneration (…); 12° The daily, weekly, monthly working hours or their conditions for adjustment (…)”. On the other hand, when the information concerns “6° (…) the identity of the user company, when it is known and as soon as it is known; 8° The right to training (…); 9° The duration of paid leave (…); 10° The procedure to be observed by the employer and the employee in the event of termination of their employment relationship; 13° The applicable collective agreements and specific collective agreements (…); 14° The compulsory schemes to which the employee is affiliated (…)”, it can be done at the latest during the month following hiring. This communication can be done by mail or electronically. The electronic format is only possible if the employee has electronic access, the information can be recorded and printed and the employer retains proof of transmission (R. 1221-39 of the Labor Code). The decree also establishes the possibility, for employees hired on a fixed-term contract or on a temporary employment contract with continuous seniority of at least six months, to request the employer to communicate the positions to be filled under a permanent contract. The employer must, within the month following the request, provide the positions to be filled corresponding to the employee’s professional qualification. The employer shall, however, not be required to respond when the employee has already made two requests in the current calendar year (Decree No. 2023-1004 of 30 October 2023, Official Journal 31 October 2023).
MODIFICATION OF THE EMPLOYMENT CONTRACT: The proposition to modify the employment contract for economic reasons must be sufficiently precise.
Modification of the employment contract for economic reasons is subject to the sending of a proposition by the employer, which the employee can refuse within one month (L. 1222-6 of the Labor Code). In the event of refusal, the employee may be dismissed for economic reasons (L. 1233-3 of the Labor Code), unless the proposed modification is not sufficiently precise. This is what the French Supreme Court (Cour de cassation) has just ruled in three decisions delivered on 8 November 2023. Firstly, the Cour de cassation makes the validity of a proposed modification of the contract subject to the mention of the economic reason by stating that “the employer, who has not mentioned in the letter proposing a modification of the employment contract the economic reason for which this modification is envisaged cannot claim, in the absence of a response from the employee within the month, an acceptance of the modification of the employment contract” (Cass. Soc. 8 November 2023, No. 22-11.369). However, the application of the regime of the proposed modification based on an economic reason does not require an express reference to article L. 1222-6 of the Labor Code. Indeed, if the letter addressed to the employee “specified that the proposed modification of the employment contract was motivated by an ongoing reorganization, including the redefinition of the commercial perimeters of the sales representatives, with the objective of preserving the competitiveness of the commercial activity in order to boost sales and improve the economic situation of the company, (and) that it indicated that the employee had a reflection period of one month from the date of presentation, silence being equivalent to acceptance“, that was enough to justify the dismissal for economic reasons (Cass. Soc. 8 November 2023 No. 22-12.412). Finally, the proposition made to the employee must be sufficiently precise “to allow the person concerned to take a position on the offer made to them by measuring the consequences of their choice”. In this case, a proposition mentioning neither the date of definitive assignment, nor the temporary place of activity pending the new assignment, “was not sufficiently precise” making the dismissal without real and serious cause (Cass. Soc. 8 November 2023, No. 22-10.350).
CALCULATION OF THE SEVERANCE PAYMENT: Stock options do not constitute remuneration that can be used to calculate the severance payment.
In a decision of 15 November 2023, the Cour de cassation provides an awaited clarification about the basis of the sums to be taken into account for the calculation of compensation for conversion of the employment contract and of the severance payment. If the court of appeal maintained that the value of the stock options, which are subject to the withholding of social security contributions and to a liberatory tax, was part of the remuneration, the Cour de cassation quashed and annulled the decision, on the grounds that “neither the distribution of free shares nor the allocation of stock options constitute elements of remuneration included in the salary base to be taken into consideration for the calculation of the disputed compensation” (Cass. Soc. 15 November 2023, No. 22-12.501).
ECONOMIC REASONS: Only a complete cessation of the company’s activity can justify dismissal for economic reasons.
Cessation of activity is one of the reasons allowing the use of dismissal for economic reasons provided for by article L. 1233-3 of the Labor Code. However, economic reasons can only be considered in the event of a complete cessation of the employer’s activity. Therefore, “the employer [who] did not justify a complete cessation of its activity since only one of its services, that of the maternity ward, had been interrupted and then replaced by a cosmetic surgery service, regardless of the autonomous nature of this service with regard to the other care services of the establishment, and […] did not justify or even allege the existence of economic difficulties or the need to reorganize the company to preserve its competitiveness” could not validly justify the economic dismissal. The court of appeal “was able to deduce that the dismissal of the employees had no real and serious cause” (Cass. Soc 4 October 2023, No. 22-18.046).
SAFETY OBLIGATION: The employer must prove that he has taken all necessary measures to ensure the safety of the employee.
In this case, an employee working in Haiti contracted a serious illness while consuming city water. If, for the employee, the employer had failed in its safety obligation by providing a defective filtration system, the employer rejected its liability based on the employee’s recklessness. For the Cour de cassation, the court of appeal, which had observed the employee’s recklessness, did not demonstrate that the employer “had taken all the necessary measures to ensure the safety and protect the health of the employee” (Cass. Soc. 15 November 2023, No. 22-17.733).