NewsletterNewsletter No.192 – December 2024
BENEFIT IN KIND AND CONCEALED WORK: Company-provided accommodation made available free of charge to an employee constitutes a benefit in kind. Failure to assess and subject this benefit to contributions reflects the employer’s intent to conceal.
An employee was provided with free accommodation on the premises of the company where he worked. However, no mention of this benefit appeared on his pay slips. When contesting his dismissal, the employee asked the labor court to order that damages be paid by the employer for concealed work on the grounds of partial concealment of salaried employment. For the French Supreme Court (Cour de Cassation), “the provision of accommodation by the employer constitutes a benefit in kind, which must be included in the employee’s remuneration and reflected on his pay slip.” According to the Court, an employer’s intentional omission to declare wages or social contributions related to the benefit in kind constitutes concealed work (Cass. Soc. 4 December 2024, No. 23-14.259).
ECONOMIC DISMISSAL: In the case of the economic dismissal of a protected employee, the administration does not investigate the employer’s fault.
In 2019, the labour administration approved a social plan that provided for the elimination of 75 positions, and the labor inspector authorized the economic dismissal of six protected employees. These employees challenged these decisions, arguing that no inquiry had been made into whether the company’s financial difficulties were attributable to the employer’s fault. In response, the French Administrative Supreme Court (Conseil d’Etat) held that when an employer cites economic difficulties as grounds for the economic dismissal of a protected employee, “it is not up to the administrative authority to investigate whether these difficulties are due to the employer’s fault, but its decision does not preclude the employee, if they believe it justified, from bringing an action before the competent courts to hold the employer liable and seek compensation for damages caused by such fault” (CE. 2 December 2024, No. 473678).
EMPLOYEE PRIVACY AND ADMISSIBILITY OF EVIDENCE: Messages sent by an employee via a company-provided phone, containing criticisms of the company and its managers, may be used in disciplinary proceedings.
An employee was dismissed for serious misconduct after exchanging critical and disparaging remarks about management with colleagues via his company-provided phone. The employee challenged the dismissal, arguing that such remarks fell under his right to freedom of expression and were shared solely with colleagues in a private circle. Furthermore, the employee accused the employer of unearthing personal conversations by basing its case on SMS messages sent from the company-provided phone. Relying on Article L. 1121-1 of the Labor Code, the Cour de Cassation stated as a reminder that “except in cases of abuse arising from offensive, defamatory, or excessive remarks, an employee enjoys freedom of expression within and outside the company”. The Court also addressed the employer’s use of messages sent from the company-provided phone, concluding that the disputed messages were “presumed to be of a professional nature because they were sent using a phone provided by the employer for work purposes and their content was related to the employee’s professional activity”. Therefore, the employer was justified in using the messages from the company-provided phone to establish the employee’s misconduct ((Cass. Soc. 11 December 2024, No. 23-20.716).
STATUS OF EXECUTIVE OFFICER: A claim for back pay related to the contestation of the status of executive officer is subject to a three-year limitation period.
An employee, initially hired as a site manager and later designated as an executive officer, was dismissed ten years later. The employee brought his case before the labor court to contest his executive officer status, challenge the validity of his dismissal, and seek compensation for various amounts related to the performance and termination of the employment contract. The court of appeal determined that the employee’s claim concerning the reclassification of his executive officer status was time-barred. Upon review, the Cour de Cassation clarified that “the limitation period is determined by the nature of the claim. A request for back pay based on a challenge to the status of executive officer is subject to the three-year limitation period established by Article L. 3245-1 of the Labor Code“. Consequently, a claim to reclassify the employee’s status is subject to a three-year limitation period if it involves back pay (Cass. Soc. 4 December 2024, No. 23-12.436).
DISMISSAL FOR UNFITNESS: An employer, who delays initiating reclassification or dismissal procedures, thereby leaving the employee in forced inactivity, breaches their obligations.
In June 2019, an employee was declared unfit for work, with his “health condition precluding any reclassification in another position.” Starting in September 2019, the employer resumed salary payments and, in November 2019, proposed a reclassification abroad, which the employee declined. In January 2020, the employee brought the case before the labor court seeking judicial termination. The Court of Appeal of Metz dismissed the employee’s claim, considering that although the employer had delayed initiating the procedure of attempted reclassification and the subsequent dismissal procedure, the obligation of reclassification was independent of the obligation to resume salary payments and was not subject to a specific time frame, so that the delay could not constitute a breach of the employer’s contractual or legal obligations. The Cour de Cassation ruled on the contrary that “the employee had been kept in a state of forced inactivity within the company, thereby compelling him to refer the matter before the labor court,” which constituted a breach by the employer serious enough to preclude the continuation of the employment contract (Cass. Soc. 4 December 2024, No. 23-15.337).
SANCTION AGAINST A PROTECTED EMPLOYEE
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The disciplinary suspension of a protected employee does not affect their corporate office or employment contract and therefore does not require their consent.
A protected employee, subjected to a disciplinary suspension, filed a claim with the labor court seeking the annulment of the sanction and an order for the employer to pay various sums. The employee argued that the sanction constituted a modification of his employment contract and therefore required his consent. Relying on Article L. 2411-1, 2° of the Labor Code, the Cour de Cassation ruled on the contrary that “the disciplinary suspension of a protected employee, which does not suspend the execution of their corporate office as staff representative and does not modify their employment contract or change their working conditions, is not subject to the employee’s consent” (Cass. Soc 11 December 2024, No. 23-13.332).