German Desk | Cross border Labour Law
Nicola KÖMPF
The French Supreme Court (Cour de Cassation) recently clarified several points of interest to international groups with employees in France.
- The CEO of one company may dismiss an employee of another company in the same group
In principle, the management of the company employing the employee concerned is responsible for carrying out the redundancy procedure.
However, the CEO may delegate this power to another employee of the company involved in human resource management (for example, the human resources director (Cass. Ch. Mixte 19.11.2010 No. 10-10.095) or the financial director (Cass. Soc. 18.11.2003 No. 01-43.608), but not a person from outside the company (Cass. Soc. 20.10.2021 No. 20-11.485).
Recent case law has more precisely defined the concept of “foreign person” in groups of companies and has accepted (Cass. Soc. 28.06.2021 No. 21-18.142) that a managing director of a parent company may, under certain conditions, dismiss an employee of a subsidiary whose activities he or she supervises (Cass. Soc. 13.06.2018 No. 16-23.701), as may the manager of another group company who has received a mandate from the CEO of the employer company to manage the subsidiary’s commercial operations and human resources (Cass. Soc. 28.06.2021 No. 21-18.142).
Nevertheless, the human resources director of a group subsidiary may not dismiss an employee of another group subsidiary unless he or she has management authority in that other subsidiary (Cass. Soc. 20.10.2021 No. 20-11.485).
As any dismissal without proper representation can be considered unfair dismissal and lead to substantial damage claims, it is advisable to carefully check the powers of representation before initiating a dismissal procedure in a subsidiary in France.
- Are documents drawn up in English enforceable against an employee of a French company that is part of an international group?
In many international groups, the common language is English and, in particular, documents determining the allocation of bonuses are drafted uniformly for all employees, including those working in France.
According to article L.1321-6 of the French Labour Code, any document involving obligations for the employee necessary for the performance of his or her work must be drafted in French, except for documents originating from abroad. The setting of objectives for an employee in France must therefore necessarily result from a document drafted in French, even if the company’s activity is international (Cass. Com. Soc. 03.05.2018 No. 16-13.736).
The question which occurred recently was (Cass. Soc. 07.06.2023) whether a commission plan drawn up in English by the American parent company for the whole group was enforceable against the French employees. The French High Court held that it is necessary to determine in a first step if the document was sent directly from abroad or transmitted by the French Employer company. However, it is strongly recommended that any document intended for a French employee is drafted/translated into French, otherwise it may be declared unenforceable, and the maximum amount may have to be paid if the bonus payment conditions cannot be applied.