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    In a decision dated May 9, 2019 (1), for the first time, the French Cour de Cassation upheld a mutual termination agreement (rupture conventionnelle) involving an employee declared unfit for his position by the occupational physician (médecin du travail).

    The mutual termination agreement of an employment contract is provided for in Articles L. 1237-11 to L. 1237-16 of the French Labor Code.

    The law does not provide for any exceptions to establishing a mutual termination agreement between an employer and an employee; nevertheless, the requirements for approval are as follows:

        – For unprotected employees by an employee representative mandate, the termination agreement must be approved by the Administration;
        – For employees protected by an employee representative mandate (2), approval from the labor inspection authority is required.

    However, there have been some serious doubts about whether employment contracts can be mutually terminated in certain specific situations.

    As an example, before mutual termination agreements were first introduced into the Labor Code (3), the French Cour de Cassation ruled that any mutually termination of an employment contract is not allowed during the period of suspension of an employment contract due to a work-related accident (4).

    More importantly, the French administration clearly excluded the possibility of signing a mutual termination agreement in cases where the employee benefited from specific protection against dismissal (during maternity leave, an absence following an occupational accident or due to an occupational disease) (5).

    In recent years, the French Cour de Cassation has given several judgments approving mutual termination agreements in the following situations:

        – Between an employer and an employee with whom there is a dispute (6);

        – Between an employer and an employee declared fit pending certain conditions after an occupational accident (7);

        – Between an employer and an employee with a diagnosed occupational disease or who has suffered an occupational accident (8 and 9). The judgment stated that the termination occurred “during the period of suspension due to an occupational accident or disease“.

        – Between an employer and an employee, during the periods of suspension of the employment contract to which the employee is entitled during maternity leave (10);

    Nevertheless, the French Cour de Cassation recalled, in each of these judgments, that the mutual termination agreement must be devoid of any defect of consent (error, violence, misrepresentation) or fraud on the part of the employer.

    In this respect, the French Cour de Cassation recently ruled (11) that the existence of acts of psychological harassment does not in itself impact the validity of the termination agreement, unless consent has not been properly obtained. In other words, acts of psychological harassment are not grounds on their own to annul the mutual termination agreement. However, the line between psychological harassment and psychological violence is quite thin, so that in practice, in the event of psychological harassment, the employer takes the risk that the lack of consent may be retained by the judges and the mutual termination agreement may be cancelled.

    In the decision of May 9, 2019, the French Cour de Cassation clarified that it is possible to mutually terminate an employment contract with an employee declared unfit for his/her job by the occupational physician and as such, the contract is no longer suspended.

    This means that it is now possible to bypass certain protective requirements for employees declared unfit, including:

        – the employer’s duty to reassign the employee to a new position, which may be burdensome if the company is part of a group;
        – the re-instatement of salary payments in the absence of a reassignment or termination of the employment contract within one month;
        – the possibility of initiating a dismissal procedure only if it can be demonstrated that it is impossible to reassign the employee to another position;
        – the payment of a specific severance amount in the event of professional incapacity, which is equal to twice the amount of the dismissal indemnity and compensatory payment in lieu of notice period.

    However, unless the employee negotiates compensation for termination in excess of the minimum compensation (12) to encourage him to renounce its protective status, it is not in the employee’s interest to consent to a mutual termination agreement of his/her employment contract.

    In the judgment of May 9, the judges ruled against the defect of consent since the employee did not allege it and considered that proof of the employer’s fraud was not established, since the employee had 15 days to withdraw before the termination agreement was duly approved and in order.

    The French Cour de Cassation also recalled that fraud must be proven by the person who invokes it and cannot be presumed.

    Nonetheless, as a precautionary measure and in order to avoid the risk of judges retaining the grounds of fraud or lack of consent, we advise to inform the unfit employee, for whom a mutual termination by agreement is being considered, of the consequences of such a mutually agreed termination.

    (1) Cass. Soc., May 9, 2019, o.°17-28767
    (2) Mandates specified in articles L. 2411-1 et L. 2411-2 of the French Labor Code
    (3) The Mutual termination agreement was first introduced into the French Labor Code through Law no. 2008-596 of June 25, 2008, although prior to that it was used in practice without a specific legal framework.
    (4) Cass. Soc., June 29, 1999, no. 97-40426; Cass. Soc., January 4, 2000 no. 97-44566
    (5) Circ. DGT no. 2009-04 of March 17, 2009, no.1.2.
    (6) Cass. Soc., May 23, 2013, no. 12-13865
    (7) Cass. Soc., May 28, 2014, no.12-28082
    (8) Cass. Soc., September 30, 2014, no.13-16297
    (9) Cass. Soc., December 16, 2015, no.13-27212
    (10) Cass. Soc., March 25, 2015, no. 14-10149
    (11) Cass. Soc., January 23, 2019, no. 17-21.550
    (12) In the event of a mutual termination agreement, the compensation is at least equal to the legal severance pay or, in companies whose industries are represented by the MEDEF, the CGPME or the UPA (French inter-professional employers’ organizations) , to the relevant contractual severance pay if it is higher.

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    Failure to take care of one’s physical fitness, to comply with the Club’s physical training program and adopt a lifestyle in accordance with one’s profession constitutes serious ” unsporting ” misconduct that justifies the termination of the fixed-term contract.

    Article L. 1221-1 of the French Labor Code is explicit in that “the employment contract is executed in good faith“. Derived from good faith, loyalty is a reciprocal duty which neither the employer nor the employee can deviate from, even if the employment contract makes no reference to it.

    In a decision of 20 February 2019 (1), the French High Court of Appeal (Cour de cassation) ruled on a dispute between a professional basketball player and his employer. Victim of an injury that occurred in the course of his professional activity, the player on leave has continuously refused to follow the medical care protocol set by the team’s doctor to attend physiotherapy sessions, even though the player is required to do so by virtue of his contract and of the collective agreement.

    In these circumstances, the employer terminated the fixed-term employment contract early on the grounds of serious misconduct. However, the professional player considered that his employer could not legitimately require him to perform any activity related to his employment during the suspension of the employment contract due to his sick leave.

    This decision is noteworthy for three reasons.

    First, while the legislator has never taken a stance on the definition itself of the duty of loyalty, the High Court of Appeal has constantly defined its scope. This decision confirms that loyalty is required for all contracts, regardless of the sector of professional activity.

    As such, the sports sector is no exception to the traditional rule according to which an employee is required to be loyal in his professional relationship with his employer; the professional sports player must also not commit acts contrary to the interests of the company, which are likely to damage its reputation or performance (2).

    Consequently, loyalty is as much a part of the game on a basketball court as it is in the changing rooms.

    Second, and even more importantly, the duty of loyalty extends beyond unexpected changes in an employment contract (3). Even when the performance of the employment contract is suspended by an occupational accident or disease, the duty of loyalty remains, unlike the duty to provide work in return for compensation.

    Underlying this, the High Court of Appeal reaffirms the spirit of Article L. 1226-18 of the Labor Code, which stipulates: “when an employee who has suffered an occupational accident or disease holds a fixed-term employment contract, the employer may not terminate the contract during the periods of suspension of the contract unless he can justify either a serious misconduct on his part or a case of force majeure“.

    To justify the dismissal of the basketball player on the grounds of violating the duty of loyalty, the High Court of Appeal agrees with the reasoning of the judges that serious misconduct results from the only fact that he did not “lend himself to the care necessary to restore his physical potential in relation to the injury“, whereas he was contractually and conventionally bound even during his work absence following an occupational accident.

    It should be noted that the High Court of Appeal strictly applies the principle according to which a reason based on the employee’s personal life may justify disciplinary dismissal if it constitutes a breach of a duty pursuant to the employee’s employment contract.

    Finally, reciprocity in the employment relationship can be also demonstrated by the employer’s and employee’s obligation to ensure health and safety.

    While an employer is required to ensure that its employees can adapt to changes in their jobs throughout the duration of their contract (4), the fact remains that the Labor Code also requires each worker to take good care, based on the worker’s training and abilities, of his or her health and safety, as well as that of the other persons who are affected by the worker’s actions or failures to perform at work (5).

    However, we would have been surprised if the High Court of Appeal had reasoned differently and acknowledged that, for the sake of privacy, the employee should be completely exempted from his or her duty of loyalty. After as, the athlete employee was advised of the health measures after his accident, specifically to ensure his physical recovery.

    This being said, from now on, one might expect that serious misconduct will also be whistled at on the benches of the labor courts…

    (1) Cass. Soc. 20/02/2019, n°17-18.912, M/ c/Sté JDA Dijon basket: by noting that “during the period of work absence following his work-related accident, the employee had not attended an appointment to organize the physiotherapy sessions prescribed by the team’s attending physician and that he had not made himself available for the physiotherapist for the purposes of following the medical care protocol”, the Court of Appeal “highlighted the existence of a breach by the employee of his duty of loyalty, making it impossible to maintain the employment contract”;
    (2) Cass. Soc. 12/10/2011, n°10-16.649 ; Cass. Soc. 21/11/2018, n°16-28.513 F-D ;
    (3) Cass. Soc. 18/03/2003, n°01-41.343 ; Cass. Soc. 30/03/2005, n°03-16.167, FS-PB ;
    (4) Art. L. 6321-1 C. trav;
    (5) Art. L. 4122-1 C. trav.

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    Decree n°2017-1387 dated September 22, 2017, on the predictability and security of labour relations, introduced a scale for compensations which allows employers and employees to have prior knowledge of the financial stakes for dismissals lacking any real and serious cause brought before the Labour Court (Conseil de Prud’hommes).

    As such, if the employee or employer refuses reinstatement into the company, the judge grants the employee compensation whose minimum and maximum amounts are already determined by the scale, based on the employee’s seniority and the size of the company (Article L.1235-3 of the French Labour Law).
    However, the scale is not applied in the event of dismissal deemed null and void due to the violation of a fundamental freedom, harassment or discrimination (Article L.1235-3-1 of the French Labour Law) .

    When the scale was set, it was the subject of much controversy and led to extensive press coverage.

    In a decision dated December 7, 2017, the Council of State (Conseil d’Etat) rejected the appeal by the French trade union CGT (Confédération Générale du Travail) which raised objections to the conformity of the scale.

    Likewise, in decision n°2018-761 DC dated March 21, 2018, the French Constitutional Council ruled the scale to be in compliance with the French Constitution.

    The scale should therefore be binding on the judge.

    Nevertheless, late 2018 and early 2019 were marked by several decisions by Labour Courts which refused to apply the scale. To our knowledge, five Labour Courts (1) nullified the compensation scale for dismissals lacking any real and serious cause.

    On the contrary, the CAEN Labour Court, in a decision by its settlement (départage) division dated December 18, 2018 (n°17/00193), applied it.

    The judicial battle is essentially about two legal points:

        – The direct applicability of the provisions of the Convention n°158 of the ILO and the European Social Charter by French judges.
        – The conformity of the scale with the principles of adequate compensation for the prejudice suffered within the context of the unfair breach of the work contract provided for in Article 10 of Convention n°158 of the ILO and Article 24 of the European Social Charter dated May 3, 1996.

    According to the Labour Court councillors who refused to apply the scale implemented by the September 22, 2017 decree, the scale is in violation of the European Social Charter and Convention n°158 of the ILO.

    We will now have to wait several months to see how the Court of Appeals and the Court of Cassation rule on the matter.

    Employers and employees are therefore once again in a state of uncertainty: the former can no longer precisely understand their judicial risk and the latter do not know the real financial stakes of legal proceedings they might initiate.

    (1) TROYES Labour Court via a decision on December 13, 2018, “Miscellaneous activities” division
    AMIENS Labour Court via a decision on December 18, 2018, “Trade” division
    LYON Labour Court via a decision on December 21, 2018, “Miscellaneous activities” section
    GRENOBLE Labour Court via a decision on January 18, 2019, “Manufacturing” division
    AGEN Labour Court via a decision on February 5, 2019, “Manufacturing” division

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    Decision by the Social Chamber of the Court of Cassation dated June 21, 2018
    (Cass. Civ 2e. 21 juin 2018, n°17-15.984)

    As per a June 21, 2018 decision, the Court of Cassation answered the following question: Is a skiing accident during a company seminar considered a work-related accident?

    Company seminars bringing together employees often give rise to various activities, in particular sports.

    In this instance, an employee was attending a seminar in the mountains. A day of free time for relaxation was planned, during which the employees could do whatever activities they wanted to. This particular employee chose to go skiing and consequently bought a ski pass for the ski lifts since the employer did not cover the costs for any of the activities. As the employee was skiing down a slope, she was the victim of an accident. She considered that it was a work-related accident since it had occurred during the seminar, however the health care insurance fund (Caisse Primaire d’Assurance Maladie – CPAM) disputed that claim.

    Yet, The Court of Cassation confirmed the Court of Appeal decision, ruling that employees participating in that day remained subject to the employer’s authority as the latter was announced in the seminar schedule, paid as working time and could therefore not be considered as a day off. As such, the skiing accident, which occurred within the free time designated for relaxation, must be considered as a work-related accident.

    This legal precedent settles various Courts of Appeal hesitations regarding similar cases of accidents during company seminars. Indeed, certain Courts of Appeal have indeed judged that an accident in such circumstances fell within the employee’s private life.

    Thus, with this ruling, the Court of Cassation has indicated that during a company seminar, by nature paid, employees which are paid remain subject to their employer’s authority even though they may have free time for relaxation, unrelated to their professional activity. Any accident that might occur during the seminar is considered a work-related accident.

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    Decision by the Social Chamber of the Court of Cassation dated May 3, 2018 (Cass. Soc. 3 mai 2018, n°17-11.048).

    While it is customary for an employer to request certain personal documents for operational purposes, there is nevertheless sensitive information in an employee’s private life that an employer is not allowed to request.

    Requesting documents pertaining to an employee’s personal life does not necessarily characterize infringement on the right to privacy in their private and family life. That is the conclusion that should be drawn further to a ruling by the Social Chamber of the Court of Cassation dated May 3, 2018 (Cass. Soc. 3 mai 2018, n°17-11.048).

    To justify her claim for damages, an employee referred to a clause in her employment contract requiring that she informs her employer of any changes occurring to her name (marital status), family situation, or place of residence.

    The question put to the Court of Cassation was therefore to know whether the employer could, based on that clause, lawfully collect such information.

    The Court of Cassation judges answered in the affirmative, even though the laws on the matter are clearly established and protect employees from excessive interference by the employer in the employee’s private life (*). Indeed, the judges considered that the Court of Appeal had validly held that “the information requested was necessary in order for the employer to assure the employee’s rights” and that, as such, the litigious clause could not constitute a breach of the employee’s fundamental rights and freedoms.

    By means of the present ruling, the Social Chamber reiterated the scope of the notion of ‘interference in an employee’s privacy’ and rejected such a condition when the request for personal information is in the employee’s interest.

    (*) Article 9 of the French Civil Code, Article 8 of the European Convention on Human Rights, and Article L1121-1 of the French Labour Law.

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    In order to promote the use of telework, Article L.1222-9 of the French Labour Law from the “Ordonnance Macron” n°2017-1387 dated September 22, 2017 and modified by the Bill of ratification on March 29, 2018 simplifies the means for implementing telework.

    From now on, an employment contract no longer needs to be modified to allow an employee to “telework” (work remotely).

    A telework situation can be implemented on the basis of one of the following 3 means:
    – a charter drawn up by the employer,
    – a collective labour agreement,
    – a simple agreement with the employee (verbal, postal or email agreement, etc.).

    Article L.1222-9 of the French Labour Law does indeed foresee that, in the absence of a charter or collective labour agreement implementing the telework situation, the employee and employer may officialise their agreement to use this type of work arrangement by any means whatsoever.

    The third means of implementation, previously only possible in the event of “temporary” use of telework provided for in the initial Law, has been extended by the Bill of ratification to all types of use of telework, whether temporary or permanent.

    Although a verbal agreement may suffice, a detailed, written one is nevertheless preferable, in particular for the sake of proof in case of a dispute.

    Moreover, and when telework is organised on the basis of the collective agreement or charter, the Law requires that the conditions for switching to telework be specified, in particular in the event of an air pollution episode.

    That specification made in the Bill of ratification actually echoes the Bill, proposed by the senators in January 2018, aimed at promoting telework in the event of an air pollution episode.

    Lastly, whatever the means for implementing telework, the Law specifies that the rights of teleworkers remain identical to those of employees performing their work on the company premises.

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    Following its referral by 60 members of Parliament, the French Constitutional Court recognize nearly all of the Bill of ratification of the “Ordonnances Macron”, including that on the implementation of the new “CSE”.

    The text, adopted on February 6 & 14, 2018 by the French National Assembly, followed by the Senate, will remain almost unchanged on the day of its promulgation.

    Ordonnance n°2017-1386 dated September 22, 2017 on “the new organization of social and economic dialogue within the Company” merges the three current employee representative bodies – the Employee Delegates, the Works Council and the Committee on Hygiene, Safety and Working Conditions (referred to as “Délégués du Personnel”, “Comité d’Entreprise” and “CHSCT” in French ) – into a single body named: Social and Economic Council (“CSE”).

    Establishing a CSE is compulsory for all companies with at least 11 employees. Its duties vary depending on the number of employees, as was foreseen up until now for companies with the Employee Delegates or Works Council.

    The CSE must therefore progressively replace the former bodies representing the personnel (IRP), in such a way that they will have completely disappeared by January 1, 2020.

    In practice, the CSE must be established at the end of the term of the former IRP, when one of the abovementioned institutions is being renewed and at the latest by December 31, 2019.

    For this purpose, the Ordonnance organizes the possibility of extending or shortening the terms underway, so that the end of the term coincides with the date the CSE is established.

    Take note: the rules for possibly extending or shortening the term underway depend, firstly, on the date the pre-electoral agreement protocol was signed and, secondly, on the date the current term expires.

    Latest News:

    When the term of the former IRP reaches its expiry date:
    – in 2018: the length of the term may be shortened or extended for at most 1 year;
    – in 2019: the length of the term underway may also be shortened
    (addition by the Bill of ratification adopted in the Senate on February 14, 2018).

    The Constitutional Court censured solely one provision, on the CSE. The employer shall not be exempt anymore from organizing partial elections in case of annulment of election of the CSE members on lists that fail to fulfil the obligation of a balanced representation of men and women (Decision n° 2018-761 DC dated March 21 2018).

    The Bill of Ratification should be promulgated in the French Journal Officiel shortly.

© Schmidt Brunet Litzler