Category: Legal news

Even if no specific regulations exist for the digital platforms, the issues raised by the new ways of working in the “gig economy” can explain a couple of recent decisions delivered by the French Supreme Court.

Indeed, the Cour of cassation’s decision of March 4th 2020 confirmed that when the driver connect to the UBER digital platform, a relationship of subordination between him and the Company was established.

Consequently, the lack of independence and the existence of a relationship of subordination could indicate the fictive nature of the independent worker status.

The criteria taken into account by the judge were as expected:

– The driver worked for an organized transport service under terms defined unilaterally by UBER as a result, the driver was unable to:

· Organize his own professional activity,

· Set his own fares, which were set by UBER’s algorithm,

· Choose his own route without receiving a price correction form UBER,

· Choose freely a ride proposed by UBER, the final destination not necessarily being known by him in advance,

· Build up his own customers,

· Choose his own suppliers.

– The exercise of, indirect or disguised, disciplinary power through:

(i) UBER is temporarily disconnecting drivers after three ride refusals;

(ii) the application of fare adjustments if the driver chooses an “inefficient route” different to UBER’s recommended route;

(iii) the deletion of the driver’s account in the event of non-compliance with the cancellation rate set unilaterally by UBER or “problematic behaviour” reported by users.

From UBER’s side, the driver “remains entirely free to connect to the application or not, to choose the location and the time he/she intends to connect, without informing the platform in advance, and to put an end to the connection at any moment”; this argument has been rejected by the judge.

Impacts of the decision

In spite of this decision, the digital platform business model, from the sharing economy, should not be really challenged for the moment, although further thinking is probably required about its practical implementation.

Indeed, the call into question of the business model will mainly depend on the number of disputes before the courts, which are few to date.

But UBER should not avoid the financial consequences of this decision; reclassification of the employment contract could effectively lead to the payment of social contributions.

Jacques Perotto, partner, and Quentin Kéraval, associate, in Alerion’s Employment department

On November 28^th, 2019 the Commercial Court of Nanterre, France, selected the offer of 11 travel compagnies to buy-off 149 Thomas Cook agencies (out of a total of 174 in France). One employee out of two will be saved; it is now time for the bankrupt Group to manage the suppression of 338 positions in France and consult its staff representatives.

 

Thomas Cook employs 685 people in France with a €750K turnover.

On the September 23^rd 2019, Thomas Cook announced it was entering a compulsory liquidation process in France ; no global offer was made and so far only 149 Thomas Cook and Aquatur Agencies have been taken over by 11 different travel Groups and compagnies (such as Havas Voyages, Karavel-Promovacances etc).

Thomas Cook will be dismantled and only 347 positions will eventually be safeguarded.

The Central Works Council will soon be consulted on the social plan and the projected redundancies.

Indeed, according to the French Labor Code, an information/consultation procedure with the Works Council (“CSE”) or the Central Works Council (“CCSE”) needs to be implemented; two official meetings should be organized by the Employer with three objectives in order to:

– Reduce the effects of the downsizing reorganisation on the employees

– Reduce the number of people supposed to be made redundant

– Find re-employment solutions for all employees affected by job cuts

A specific document drafted by the employer or negotiated with the unions must be sent to the French Labor Authorities for approval.

However, in the case of compulsory liquidation, the constraints on the employer are considerably reduced as there’s only one “CSE” (or “CCSE”) meeting and the social and financial measures implemented by the employer need to be mitigated. The approval, supposed to be given by the French Labor Authorities, is by consequence easier to obtain.

Moreover, the French Labor Regulations provide that the compulsory liquidation is, in itself, a fair ground for lay-offs ; meaning that the Employer is not obliged to justify his decision with economic and financial explanations. By consequence, the dismissal decision taken by the employer is rarely challenged in Court, unless it is a case of manifest fraud ; this would be the case if, for example, the parent company took over all the assets from its subsidiary for its own benefit.

Finally, in the event of non-compliance of the mandatory information/consultation procedure with the Works Council “CSE” or “CCSE”, the Company would be sentenced to pay a €3,750 fine.

In the case of Thomas Cook however, it is already planned to consult the staff representatives of the Group on a social plan and potential redundancies of the employees that were not concerned by the buy-back offers.

Despite Thomas Cook’s bankruptcy, the employees that will be made redundant will not entirely be left by the wayside since they will benefit from the “AGS” insurance which, in France, guarantees the payment of salaries in case of liquidation.

 

Jacques Perotto, partner, and Arielle Duchène, associate, in Alerion’s Employment department

Alerion has published a new issue of “LexPress” dedicated to French regulation on Foreign Investments.

Since January 1st, 2019, the scope of controlled activities became broader, with new sectors requiring prior authorization from the French Government, such as R&D activities in the fields of cybersecurity, AI, robotics, or 3D manufacturing. In addition, the future so-called “PACTE Law” – currently under review at the French Parliament – will shortly provide the Ministry for Economy with extended powers and graduated responses to enforce Foreign Investments regulation, and ensure its efficiency. Firms that intend to invest in French innovative businesses should consider whether they fall within the scope of this new regulation.