The Labour and Employment Disputes Review: France

Introduction

In France, as in many Western countries, the salaried employee, who is economically weak, is regarded as being legally favoured in any employment relationship. French labour law, therefore, decisively favours the employee rather than the employer. In the litigation area, examples abound of legislators showing such favour. Thus, in the event that a dismissal is challenged, the employee is given the benefit of the doubt. In other words, if the judge has not been able to decide in the light of the elements submitted by the parties, he or she must consider the dismissal to be devoid of actual and serious cause and subsequently grant damages to the employee.

Similarly, when an employee alleges a prohibited discrimination, either in the termination or even the performance of the employment contract, the burden of proof is clearly reversed. The same applies to allegations of moral or sexual harassment. It is up to the employer to show that the decision he or she made was not influenced by a discriminatory ground. If the employer cannot prove this, the alleged discrimination will be upheld against him or her. This mechanism is particularly unfavourable towards companies since, as we shall see, damages paid for discrimination must be awarded in full, in all cases.

In France, however, it has always been considered that the determination of the standards that govern employment relationships should be left to the social partners. Labour law (and, more generally, social law) is, therefore, widely composed of rules that derive from collective agreements negotiated by employers' groups on the one hand and employee unions on the other. In this context, the role of the state should be limited, through government action, to giving the social partners the impetus – and sometimes the injunction – to negotiate. In addition, the state should, through the action of the legislature, limit its role to determining the general principles that are binding in all cases, and that the social partners cannot exclude, while ensuring the effectiveness of collective agreements – again through appropriate legislation.

Procedure

These principles explain why the resolution of individual labour disputes between an employer and an employee falls, in the first instance, not to state courts but professional and specialised ones, namely the labour courts. These are presided over by an equal representation of non-professional judges who are appointed by trade union organisations of employers and the trade unions of employees. The labour courts are divided into professional sections: industry; trade and trading services; agriculture; and miscellaneous activities. There is also an inter-professional section – the management section – before which all disputes between members of management and their employer, whatever the nature of the activity, are brought.

Wherever possible, conciliation is the preferred resolution. The procedure therefore begins, in the vast majority of cases, with an attempt at conciliation. This is entrusted to the conciliation board of the court, which is composed of two judges: an employer and an employee.

For a long time, the role of the conciliation board was limited to seeking an agreement between the parties to put an end to the dispute, in whole or in part, at a conciliation hearing. However, since 2016, it is also in charge of the preparation of the case and its orientation before the judgment board. The conciliation and orientation board thus plays the part of an examining magistrate, and is comparable, in many respects, to the role of a pretrial judge in procedures before the judicial tribunals.

Thus the board may order, even ex officio, all appropriate means of inquiry. From this perspective, it can, at the outset of a conciliation hearing, order the disclosure of a particular piece of evidence, organise a consultation measure or even seek specialist knowledge, authorise an inquiry, order the personal appearance of the parties or visit the place of work, inter alia. Where the existence of the obligation is not seriously challengeable, the board may order payment by the employer to the employee of a provision on the wages and damages relating to the termination of the employment contract. Similarly, the board may order delivery of the documents relating to the termination of the employment contract (such as the certificate of work or certification for the unemployment agency).

As part of its examination of a case, the conciliation and orientation board should ensure there is an exchange of arguments and evidence between the parties. In this regard, the procedure before the labour courts, which was purely oral until 2016, has since undergone an important evolution, which increases very significantly the quantum of writing. Henceforth, a labour court must be seised of a signed and dated written petition, which must state the legal and factual grounds supporting a claim. This petition must also set out the documents on which the claim is grounded and must be filed with the labour court registry in as many copies as there are parties to the proceedings plus one, with a copy of the documents. For the remainder of the proceedings, if the parties have decided to be assisted or represented by lawyers, those lawyers, if they decide to use written documents to develop their argument, must now do so in the form of legal submissions.

When it appears to the conciliation and orientation board that the case has reached a state in which it can be judged, the parties are referred to the judgment board, which will hear the pleadings. Composed of four judges specialising in labour law – two employers and two employees – the board then deliberates before rendering its decision. Note that the parties are not present during the judgment board's deliberations. In approximately 20 per cent of cases, these four judges do not succeed in adopting a decision by a majority of the votes cast, with ballots equally divided for and against the claimant. In these cases, a professional judge is called upon to assume the role of 'tiebreaker'. He or she hears the pleadings again, if possible in the presence of the initial four judges who specialise in labour law, and the decision is then adopted in this tie-breaker setting with five members. In the absence of the judges with specialised experience in labour law and who originally heard the pleadings, the professional judge rules on the matter alone, after having heard the opinion of the attending judges.

Judgments rendered by a labour court may be appealed before a court of appeal. Again, for a long time, these proceedings were oral, even at the appeal stage, but there has been a move towards a written, more formal procedure. As of 2016, all stages of the procedure are in writing, including hearings at courts of appeal. The parties must be represented either by a lawyer or by a union representative. All the rules applicable to civil case procedures before a court of appeal – which are sometimes very stringent – now apply to labour law procedures. In turn, decisions rendered by courts of appeal can be appealed before France's supreme court, the Court of Cassation.

In the courts of the highest degree (courts of appeal, the Court of Cassation), the specificities of labour law dispute disappear: these courts are presided over by professional judges who adjudicate on labour law disputes according to the same procedures as those pertaining to family law, civil liability law, commercial law, etc.

Other types of conflict resulting from the application of employment laws and more generally social laws fall within the jurisdiction of common law courts (the judicial court has replaced the regional court since 1 January 2020). These include 'collective' disputes between employee trade unions or staff representative bodies (social and economic committees) and employers or groups of employers. Among these disputes, one can mention those related to the application of collective bargaining agreements. One should also not disregard the significant weight of disputes relating to professional elections and the appointment of union representatives, as well as social security litigation subject to specific procedures brought before the judicial court.

Finally, the substantial role played by administrative courts in employment relationships must be mentioned, namely administrative courts, administrative courts of appeal and the highest administrative court, the Council of State. In a nutshell, they are called to rule on two different types of disputes. These jurisdictions traditionally hear the claims lodged against decisions taken by the labour inspectorate with respect to employees benefiting from special protection, mainly those holding a union mandate or an elective office, the dismissal or even certain modifications to the employment contract of whom must be authorised by the administration prior to their implementation. If unlawful, the authorisation or refusal may be referred to the administrative judge.

In addition, all disputes resulting from collective redundancies when the procedure targets more than 10 employees over a period of 30 days also fall within the jurisdiction of the administrative courts. For these procedures, to limit the number of redundancies, an employment safeguarding plan must be certified or approved by the labour administration. All claims arising in the framework of these procedures must be brought before the administrative courts.

Types of employment disputes

The vast majority of cases that come before the labour courts arise from the termination of an employment contract or, more specifically, a dismissal. A total of 80 per cent of the claims brought before labour courts aim to challenge the grounds for dismissal, most often based on personal matters.

The remainder of cases relate to the performance of the employment contract (e.g., moral harassment, discrimination, amount of salary, application of a collective agreement or working time).

Year in review

During the past 12 months, labour law disputes have continued to be affected by the challenge presented by the 'Macron Scale'. By way of a reminder, with respect to dismissals notified since 23 September 2017, the Macron Scale introduced a ceiling for the amount of damages awarded by judges in the event of dismissals devoid of actual and serious cause. Pursuant to Article L.1235-3 of the Labour Code, to the extent a dismissal is not notified for an actual and serious cause, the judge grants the employee damages paid by the employer the amount of which is set according to minimum and maximum damages payments that vary according to the employee's length of service and the number of employees at the company.

The purpose of this scheme is to address criticisms as to the 'unpredictability' of the amount of damages granted by the courts for a dismissal without actual and serious cause. As no such maximum damage amount had been set prior to Ordinance No. 2017-1387 dated 22 September 2017, each judge could freely determine the amount of damages granted to an employee dismissed without any actual or serious cause and, in a completely different way, from one labour court to another or a court of appeal to another.

However, these limitations only affect dismissals found to be without actual or serious cause. There is no ceiling for damages granted when the dismissal is void because of the violation of a fundamental freedom, an act of moral or sexual harassment, in case of discrimination or when the dismissal follows to legal action. In these cases, compensation for the harm suffered must be full.

Further to its publication, the scale set in Article L.1235-3 of the Labour Code was heavily criticised, on the grounds that it would be contrary to Article 10 of Convention No. 158 of the International Labour Organization and Article 24 of the European Social Charter.

This debate was settled by the highest French courts that all confirmed the scale's compliance with these texts:

In its Ordinance No. 415.243 dated 7 December 2017, the Council of State ruled that the capping of damages for dismissals is not contrary to Article 24 of the European Social Charter and Article 10 of Convention No. 158;

In its Decision No. 2018-761 DC dated 21 March 2018, the Constitutional Court approved this scheme without reservation. After having observed that the differentiation established by the provisions of Article L.1235-3 of the Labour code is not contrary to the principle of equality before the law, it ruled that this article does not overlook the guarantee of rights or any other constitutional requirement and therefore complies with the Constitution;

In Opinion No. 19-70.010 issued by its plenary assembly on 17 July 2019, the Court of Cassation considered firstly, that the provisions of Article 24 of the revised European Social Charter did not have a direct effect in national law in the framework of a dispute between private individuals and secondly, that the provisions of Article L.1235-3 of the Labour Code that set a scale applicable to the determination by the judge of the amount of damages for dismissal without actual and serious cause are compatible with the provisions of Article 10 of Convention No. 158.

However, despite these decisions, on 18 September 2019, the Paris Court of Appeal issued an order that, although it approves the application of the scale by restating that it is not contrary to the provisions of the applicable international and European conventions, insists on the requirement to grant an adequate and appropriate indemnity to the employee dismissed without actual and serious cause.

In the same spirit, on 25 September 2019, the Reims Court of Appeal also approved the scale, while specifying that the judge may in concreto exercise control over this scale and, as the case may be, disregard its rules if it does not allow the employee to obtain fair compensation for his or her actual prejudice.

The Bourges Court of Appeal also used this loophole by issuing an order on 6 November 2020 that disregards the application of the scale on the following grounds:

with respect to his age, 59, and the resulting difficulties for him to find a new position in a tense job market, as proven by him, the application of the aforementioned provisions of Article L.1235-3 of the Labour Code entails in the case at hand, a disproportionate infringement of his rights, in that it does not allow for the full compensation of his prejudice. On this basis, it is in breach of the aforementioned provisions of Article 10 of Convention No. 158.

It is, therefore, the first time, since the opinion issued by the plenary assembly of the Court of Cassation on 17 July 2019, that a court of appeal dismisses the application of the scale based on an in concreto assessment of its compliance with Article 10 of Convention No. 158. There is no doubt that other court of appeals will follow suit, which will inevitably give rise to true uncertainty as to the applicability of the scale.

It would thus be preferable for this matter to be referred to the Court of Cassation to obtain a ruling, in an order and not just an opinion, on whether trial judges may perform such an in concreto assessment. It goes without saying that if the Court of Cassation were to approve such a possibility, it would negate the purpose of Ordinance No. 2017-1387 dated 22 September 2017 (i.e., providing foreseeability on the sanctions incurred by an employer in the case of dismissal without actual and serious cause).

Outlook and conclusions

The question raised is that concerning the continuance of the transformation of labour law disputes, both from a quantitative and a qualitative point of view. First, regarding quantity, the fall in the number of incoming cases occurred well before the Macron Scale was implemented and before the reforms to the labour law procedure that took effect on 1 September 2016. The peak was reached in 2009 when the number of new cases rose to the unparalleled level of 228,578 cases. The number has fallen steadily since: to 184,343 cases in 2015; 149,806 in 2016; and 126,693 in 2017. It is clear that the reforms followed an underlying trend that was already downward and the reforms did not trigger the decline or even accelerate it.

It is certain that the nature of the cases of which the French labour courts are now seised has evolved significantly. Litigation may certainly remain overwhelmingly made up of disputes over individual dismissals, but it will increasingly occupy the territory of discrimination in all its forms. Indeed, when it is discriminatory, a dismissal is void and, when deemed void, a dismissal entitles the claimant to compensation without limit.

However, this type of case is much more burdensome than cases based solely on challenging the actual and serious cause. In itself, despite the benefits to the employee in terms of the burden of proof, when the discrimination falls within the scope of a legal prohibition, it must be carefully alleged, and the elements that make it likely and presume its existence must be collected carefully. Conversely, an employer must be very specific when challenging allegations made by an employee, as it does so without being able to take shelter behind its power of control.

It will have to ensure, in a precise written and legally based argument, the development of all the legal means necessary to convince the judge.

Footnotes

1 Benoît Dubessay is a partner at Chassany Watrelot & Associés.

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