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27.03.2024Flora Bandoui, Myriam de Gaudusson

Newsletter Labor Law – March 2024

Case Law: notable rulings on 2023

  • Paid leave compensation during absence for sickness

French Supreme Court, 13 September 2023, n° 22-17.340, 22-17.341, 22-17.342

By three rulings of September 13, 2023, the plenary session of the French Supreme Court disregarded the provisions of the French Labor Code on paid leave rights, considered as in breach of European Union law, and set the following rules:

  • Employees with a suspended employment contract due to illness acquire paid vacation entitlements during said suspension period;
  • Employees, with a suspended employment contract due to a professional related accident acquire paid vacation entitlements for the entire suspension period;
  • While paid vacation claims are still subject to a three-year limitation period, this period is not running until the employer has taken all necessary steps to ensure that the employee can effectively exercise his right to paid vacation.

On 8 February 2024, the French Constitutional Council (“Conseil Constitutionnel”) ruled that the provisions of the French Labor Code related to paid leave during an illness complied with the provisions of the French Constitution.

While the concerned French Labor Code provisions are not unconstitutional, they remain contrary to European Regulation, as the French Supreme Court ruled on 13 September 2023.

The French Parliament shall clarify the situation by elaborating a new legal framework:during the hearing before the French Constitutional Council, the Prime Minister’s representative said that, in order for the French Labor Code provisions to comply with the EU Regulation, the French Government was considering limiting the amount of paid leave that can be earned by an employee on sick leave to 4 weeks.

The French Parliament’s position is expected due to the financial impact of the French Supreme Court’s ruling on employers.

  • Claims on moral Harassment

French Supreme Court, 19 April 2023, n° 21-21.053

Employees reporting acts of moral harassment are protected even if they do not use the term “harassment” in their report letter, provided that (i) the facts are explicit, and (ii) the employer could not have been unaware of them.

Prior to this ruling, the protection against dismissal of an employee who reported a moral harassment situtation only applied if the employee had expressly and formally used the expression “harassment” in his report letter (French Supreme Court 13-9-2017 n° 15-23.045).

This new ruling will solely higher new ways of reporting harassment situation for the employee and for the employer to implement anti-harassment measures in a most appropriate way.

  • Admissibility of unfair evidence

French Supreme Court, 22 December 2023, n° 20-20.648; 21-11.330
The French Supreme Court ruled that evidence obtained in an unfair manner can now be used by the court if, after balancing the rights involved in the trial (e.g., privacy and the evidence rights), it is absolutely necessary and proportionate to produce it to prove the claim.
This ruling follows a case where an employee had been dismissed for gross misconduct based on an employer’s recording made without the knowledge of the employee. The French Labor Court judged the dismissal unfair as grounded on evidence unfairly obtained based on a previous case law of the French Supreme Court, which excluded any unfairly obtained evidence (French Supreme Court, 7 January 2011, n° 09-14.316 ; 09-14.667).
However, the employer appealed this ruling before the French Supreme Court, involving the recent evolution in its case law regarding the admissibility of illicit evidence (French Supreme Court, 30 September 2020, n° 19-12.058; French Supreme Court, 25 November 2020, n° 17-19.523).
The question was whether a “clandestine” recording of conversations could be admissible in a civil trial.
Based on the provisions of Article 6, § 1, of the European Convention on Human Rights guaranteeing the right to a fair trial, the French Supreme Court changed its previous case law.
Now: unfairly obtained evidence (or illicit evidence) may be admissible, in a civil trial, (i) if essential for asserting a right and (ii) if the infringement on other rights is proportionate.
The French Supreme Court provided guidelines to judges, asking them to assess on a case-by-case basis whether the admissibility of unfairly obtained evidence should be allowed, balancing the right to evidence against opposing rights, and ensuring that any right infringement is proportionate to a legitimate purpose.
The practical meaning of this ruling is substantial in practice: evidence that were not previously admissible in court (i.e., clandestine recordings without the knowledge of the employee or the employer, illicit or unfair video recordings, etc.) can now, under certain conditions, be accepted by the Courts.

Legislation and Regulations

  • Presumption of resignation for abandonment of position

Decree no. 2023-275, 17 April 2023
Since Law n° 2022-1598 dated 21 December 2022, an employee who voluntarily abandons his position by failing to return to work after being formally notified to provide justification for his absence within a specified period, is presumed having formally resigned from his work (new article L. 1237-1-1 of the French Labor Code).
When the employee abandoned his position and the employer intends to claim the presumption of resignation, the employer must issue a formal notice requiring the employee to justify his absence and return to work within 15 days (new article R. 1237-13 of the French Labor Code).
Before this new legal mechanism, where an employee was absent from work without any justification, after a formal notice from the employer, the latter could terminate the employment contract for gross misconduct.
The employer was not allowed to construe this situation as a resignation from the employee.
This new presumption of resignation is designed to prevent the former practice whereby both the employer and the employee agreed upon a “fake” dismissal for gross misconduct, allowing the employee to benefit unemployment allocations from “France Travail” (i.e., the French unemployment insurance organization), and avoid the employer the severance pay and the notice period compensation.

  • National Pension Reform

Law no. 2023-270, 14 April 2023
Enacted on 14 April 2023, the Pension reform took effect on 1st September 2023 (Law no. 2023-270, 14 April 2023).
The key provisions of the Pension reform include, in particular:
• raising the legal retirement age from 62 to 64,
• a minimum pension of 1,200 euros net for a full career,
• a comprehensive employment-retirement cumulation scheme for new pension rights,
• the social security charges paid by the employer when a contractual termination (“rupture conventionnelle”) and retirement (“mise à la retraite”) are harmonized.

  • Changes in unemployment insurance rules: shorter compensation

Decree no. 2023-33, 26 January 2023
In accordance with the provisions of Law n° 2022-1598 of 21 December 2022, a Decree no. 2023-33 of 26 January 2023 relating to French unemployment insurance adjusted the rules governing the allocation duration of jobseekers.
The Decree introduces a modulation of the duration of allocations for jobseekers according to the situation of the labor market. It does not change the amount of unemployment insurance allocations, nor the conditions of eligibility for unemployment insurance.
As from February 1, 2023, the duration of allocation for jobseekers eligible to French unemployment insurance has been reduced by 25%.
At the end of their unemployment insurance allocation period, jobseekers may benefit from an end-of-right supplement (“complément de fin de droit”), i.e., an additional period of allocation in case of a deterioration in the labor market situation, i.e. when the French unemployment rate exceeds 9%.

  • Suspension of Unemployment Allowances after 2 refusals of permanent contract 

Decree no. 2023-1307, 28 December 2023
When an employee is employed under a fixed-term employment contract that is about to expire, or when the assignment for which he/she was recruited as a temporary worker comes to an end, the company for which he worked may offer him a permanent employment contract.
The employee has the right to refuse, but such a refusal shall be reported on to “France Travail” (replacing “Pôle emploi”) and, in certain conditions, may deprive the employee from the unemployment allowances.
As from 1 January 2024, after a fixed-term contract or a temporary assignment, if the employee refuses at least two offers of a permanent employment contract, over the previous 12 months, the employee may not be entitled to benefit from the unemployment insurance allowances.

  • Net social security amount on pay slip

Decree dated 31 January 2023
As from July 1, 2023, pay slips will have to display a new item, called “net social amount”, i.e., the income amount necessary for calculating certain social benefits such as the “prime d’activité” or the “RSA”.
This will enable employees to easily identify the income they need to declare to French social security organizations in order to benefit from certain social allocations.

  • Obligation to implement professional elections for companies employing between 11 to 20 employees

Cerfa 15248*05
For companies employing between 11 to 20 employees, the French Labor Administration has considered that the employer is not required to organize social and economic committee elections if no employee had informed his intention to be a candidate for the elections within 30 days of the landing of the elections.
  • The French Labor Administration thus considered that the company did not have to organize the 1st or the 2nd round of elections but could directly draw up a notice of default (“PV de carence”). This flexible construction did not comply with the applicable related French Labor Code provisions and was not followed, in practice, by companies.
  • Indeed, according to the provisions of Article L. 2314-5 of the French Labor Code, in companies employing between 11 to 20 employees, when no employee presented his candidacy with this 30-days period, the employer is only exempted from inviting the trade union organizations to negotiate the pre-electoral protocol. However, these provisions do not expressly mention that the employer is exempted from the organization of the elections.
  • On August 8, 2023, the French Labor Administration modified its position, by amending the Cerfa n° 15248*05 (i.e., the administrative form to be completed after the results of the election process).
  • In companies with 11 to 20 employees, in the absence of a candidate within 30 days of the employer’s information of the organization of professional elections, the employer must organize the elections, i.e., adopt a unilateral document defining the electoral process, schedule a 1st round of election, and a 2nd round of election if necessary, and publish the results of the elections (either one or more employees are elected as members of the CSE, or no employee has been candidate and the employer issues a “PV de carence”).

  • Derogation from weekly rest during the Paris Olympic Games 

Decree no. 2023-1078, 23 November 2023
The French Labor Code provides that (i) no employee may work more than six days a week (article L. 3132-1), (ii) employees must be granted a minimum rest period of 24 consecutive hours, plus consecutive hours of daily rest, (article L. 3132-2) (iii) given on Sunday (article L. 3132-3).
In the context of the Paris 2024 Olympic Games, companies may possibly experience the need to organize differently in order to increase their headcount’s working time capacity.
Therefore, in the run-up to the 2024 Paris Olympic Games, as from 15 June to 30 September 2024, retail-outlets located in the geographical areas where the Olympic Games will take place may open on Sundays. Most important: this possibility can only apply to voluntary employees.
Moreover, some companies involved in the 2024 Olympic Games can suspend employees’ weekly rest period as from 18 July 2024 to 14 August 2024. This rule only applies to companies experiencing an “extraordinary” increase in workload in carrying out activities that are essential to the smooth running of these games (i.e., activities directly linked to the organization of the competitions).