Employment Newsletter Ashurst Paris January 2023

The Ashurst Paris employment team wish you a happy 2023, and this newsletter rounds up the latest legislative, regulatory and case law news.

LEGISLATIVE AND REGULATORY NEWS

1. Unemployment insurance : the labour market law has been adopted

The law, adopted by Parliament on 17 November 2022 and published in the Official Journal on 22 December, fundamentally changes the rights to unemployment insurance. The terms relating to implementation will be set out by decree.

In addition to the presumption that an employee has resigned where an employee stops showing up for work without the employer’s permission and without any justification, the new law abolishes unemployment insurance where an employee repeatedly refuses to accept permanent contract offers. It also authorises the government to set the rules relating to unemployment insurance.

Going forward, an employee who refuses two permanent contracts offers within a period of 12 months following a fixed-term contract or a temporary contract will lose the benefit of unemployment insurance. The offer of a permanent contract must relate to the same job or a similar job, with (i) an at least equivalent remuneration for an equivalent working time, (ii) the same status (“classification”) and (iii) no change in the place of work.

In practice, the employer (or the user company), will notify the employee on a fixed-term or temporary contract about the permanent contract offer in writing. Where the employee refuses the offer of a permanent contract, the employer will inform Pôle emploi (the French unemployment agency).

The new law also provides a mechanism for adjusting the period over which compensation is paid to reflect the labour market conditions. From 1 February 2023, this period may be reduced to encourage people to return to work when the economic situation is favourable. However, the current compensation rules will apply during periods of greater unemployment.

2. A bill aiming to adapt various provisions of EU law relating to work into French law is under discussion in the French Assembly

The bill aimed at transposing Directive 2019/1152 dated 20 June 2019, voted by the Senate on 13 December and sent to the National Assembly, provides in particular:

• A new legal formalism for employment contracts: new information such as the length and conditions of the probation period, the right to training, and the procedure on termination that will need to be followed will have to be communicated to the employee within a shortened timeframe. Where an employee has not received this information, they can apply to the court to get this information after they have given formal notice to their employer requesting the required documents or, if necessary, to complete the documents that have been provided.
• A mechanism for making employees on fixed-term contracts aware of permanent contracts: the employer must, at the request of the employee who is on a fixed-term contract and who has been employed by the company for at least six months, inform them of any vacant permanent contracts within the company.
• A maximum length for a probation period: a probation period must not exceed 6 months, except "when the nature of the job justifies it or when it is in the interests of the worker". The bill specifically aims to remove the provision allowing national collective bargaining agreements to depart from this maximum length.
• Various measures concerning family leave: the length of paternity leave will be treated as equivalent to an actual period of work in respect of any rights associated with an employee’s length of service. Additionally, parental leave will no longer be subject to the requirement to have at least one year continuous employment on the date of birth (or adoption) of a child so that those who are not employed at the time of the date of birth (or adoption) of the child can subsequently benefit from this leave.

3. The increase of the minimum wage from 1 January 2023

By decree n° 2022-1607 dated 23 December 2022, the amount of the gross hourly minimum wage increases from €11.07 to €11.27. The gross monthly amount is also increased to €1,709.28, i.e. a net amount of €1,353.07.

4. CNIL (the French Data Protection Agency): professional elections and personal data

In a question and answer article dated 24 October 2022, the CNIL provided details about professional elections and personal data.
The only information that an employer can include on an electoral list about an employee is their surname, first name, age, company position and the seniority of the employee. It must not include the employee's address.

For electronic voting, there are no prior formalities which need to be agreed with the CNIL, but the employer must comply with the GDPR requirements such as informing employees how the electronic voting system will operate, by providing complete and easily accessible information.

Additionally, the election organiser must not send to the voter's home his identifier and his password in two separate postal envelopes. This information must be sent by two different communication channels to reduce the risk of them being stolen by a third party (i.e. postal, email to their professional address, hand delivery). They cannot be sent to the employee's personal e-mail address unless the employee has expressly agreed.

CASE LAW UPDATE

1. Social regime of the settlement payments compensating a detriment (Civ 2., 13 October 2022, 21-10.175)

The Court of Cassation (the French Supreme Court) has confirmed that only evidence of the detriment which the settlement payment aims to compensate matters. Therefore, as long as an employer can prove that the settlement sum paid to the employee is of an indemnitary nature, it is exempt from social security contributions.

If the settlement sum paid is not included on the list of compensation payments which are “limitatively listed" by article 80 duodecies of the General Tax Code, it is subject to social security contributions, unless the employer provides proof of the indemnitary nature of this payment.

In other words, the exemption from social security contributions of a settlement payment will apply:

• if the sum is among the compensations exhaustively listed by article 80 duodecies of the General Tax Code;
• if the employer can show that where the sum is not covered by article 80 duodecies, it covers, either in all or part, compensation for a detriment other than the loss of salary.

The URSSAF (who collect and distribute social security contributions in France) pursued a claim against a company as it considered that the settlement compensation paid to the employee did not indemnify a detriment suffered by the employee when the employer had exercised its right to terminate the employee’s "internship" and paid him money as compensation. The first instance judges, whose findings were confirmed by the Court of Cassation, considered that the disputed sum was made on an exclusively indemnitary basis.

2. Travelling employee: the travel time between their home and the sites of the first and last customers can constitute effective working time (Soc., 23 November 2022, 20-21.924)

After several years of resistance, in a judgment on 23 November 2022, the Court of Cassation has finally aligned its position with that of the Court of Justice of the European Union: the travel time of a travelling employee, subject to some conditions, should be recognised as working time.

In this case, during his journeys in a company vehicle the employee had to make appointments, as well as make and answer work-related calls. On occasions he had to stay overnight in a hotel so that he could make his scheduled visits the next day. The Court of Cassation confirmed the judgment of the Court of Appeal that these facts lead to consider such time as effective working time. The employer was, therefore, ordered to pay back pay for the overtime worked.

This means that if there is a dispute involving an employee who travels, the court will have to decide whether the employee is subject to his employer’s instructions (and therefore is not able to do his own activities) during the travel time to get to/from his first/last client.

3. Incapacity and consulting staff representatives (Soc., 16 November 2022, 21-17.255)

When an employee has a physical incapacity diagnosed by an occupational doctor, whether or not incurred at work, the employer must offer them another job suitable to their abilities after consulting the CSE (The Social and Economic Committee (Works Council)) in accordance with article L. 1226-2 of the French Labour Code.

However, when an employee is declared unfit for his job (incapacity incurred at work), the employer does not have to consult with the CSE when the notice of incapacity contains an express exemption from the employer having to offer them another suitable job.

This already applies to incapacity incurred at work and it now applies to incapacity not incurred at work: when the occupational doctor has expressly confirmed that in their opinion the continuation of the employee in a job would be seriously prejudicial to their health or that the state of health of the employee does not allow the employer to offer them another suitable job, the employer does not have to consult staff representatives. When drafting the incapacity notice the doctor must ensure that they complete the relevant box.

Authors: Muriel Pariente, Partner