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Client alert: the French Supreme Court validates the “Macron Grid” which caps damages awarded to employees in cases of unfair dismissal

In two opinions dated July 17, 2019, the French Supreme Court confirmed that the so-called “Macron Grid” implemented by the French employment law reforms in September 2017 is compatible with Article 10 of Convention no. 158 of the International Labor Organization (“ILO”).

Following diverging opinions and judgments from local French labor courts (e.g., Montpellier, Troyes, Lyon) on the validity of the Macron Grid, the French Supreme Court has received a request for its opinion from the Louviers and Toulouse labor courts to determine whether such Macron Grid is compatible with international laws.

The Macron Grid (codified under Article L. 1235-3 of the French Labor Code) establishes a scale that applies to the determination by French judges of the compensation granted for unfair dismissal. It sets a minimum and a maximum amount based on the employee’s seniority and average gross salary: the minimum amount is one month’s salary for one year of service (0.5 months for companies with less than 11 employees); the maximum is twenty months’ salary for employees who have at least 29 years of service. Note that this grid does not apply if employees claim that their dismissal results from discrimination or harassment and they hence request that their dismissal be declared null and void.

Certain labor courts have considered that the Macron Grid violates Article 10 of Convention no. 158 of the International Labor Organization (“ILO”) which provides that if judges rule that termination is unjustified, “they shall be empowered to order payment of adequate compensation or such

French Gender Equality Index

In order to fight against gender inequalities at work, French law no. 2018-771 adopted on 5 September 2018 introduces an obligation for employers to achieve the principle of equal remuneration between women and men (as opposed to a best efforts obligation). To do so, companies with 50+ employees will be required to calculate an “equal pay index”, based on gender equality indicators. They must then publish their results on their website and remedy inequalities in the event of insufficient results. They must also disclose the result to their personnel representatives and to the French labor authorities.

The gender equality indicators that must be taken into account are:

– the gender pay gap, calculated according to the average pay of women as compared to men, by age group and equivalent job category;

– the difference in the rate of individual salary increases between women and men;

– the percentage of employees who were granted an increase in the year following their return from maternity leave, if increases were granted during the period during which the leave was taken;

– the number of employees of the under-represented sex among the ten employees with the highest remuneration.

In addition, companies that have 250+ employees must take into account a fifth indicator: the gap in promotion rates between women and men.

Points will be granted for each indicator depending on the results achieved. The results are then aggregated in order to obtain an overall result ranging from 0 to 100 points. French Decree n°

Recharacterization of the Relationship Between a Delivery Driver and a Digital Platform as an Employment Agreement

In a judgment dated 28 November 2018, the French Supreme Court (Cour de Cassation) ruled for the first time on the characterization of the agreement between a delivery driver and a digital platform. The French Supreme Court granted the status of employee to a former delivery driver of Take Eat Easy.

The French Court of Appeal had rejected the employee status because, among other things, the driver remained free each week to determine the time slots during which he wished to work. The French Supreme Court considered, basing itself on objective elements, that the “geo-tracking system which enabled the company to monitor in real time the position of the driver and the number of kilometers covered by him” allowed the company to sanction the driver (via a bonus and malus system). It therefore ruled that the existence of a power of direction and control over how the driver provided his services created a relationship of subordination, and annulled the judgment of the French Court of Appeal.

For several years now, litigation related to digital platforms such as Uber has emerged both in France and abroad; the decisions rendered by the courts however differ.

In France, several Uber drivers filed proceedings to recharacterize their Uber agreement as an employment agreement. On 29 January 2018, the French Labor Court dismissed a former Uber driver’s request on the grounds that the driver was “entirely free to work according to the hours and days that suited him”, and that “this total freedom in the

New French Measures Affecting Employees and Employers Following Yellow Vest Demonstrations: Exemptions for 2018 Exceptional Bonus and 2019 Overtime

January 7, 2019

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French Parliament passed a bill last December 21, 2018 introducing urgent economic and social measures to improve employees’ purchasing power.

One measure concerns the payment of an exceptional bonus of up to 1,000 euros net, exempted from social contributions and income tax, to employees earning up to 3 times the yearly minimum wage. Another is an exemption from certain social contributions and from income tax for any overtime worked as from January 1, 2019.

The exceptional bonus measure concerns those employees that earn up to three times the minimum wage and is capped at 1,000 euros. The bonus must be paid between December 11 and March 31, 2019. Existing bonuses or those provided by employment agreements, company practices, collective or company labor agreements, and planned salary increases cannot benefit from the exemptions.

The amount of this bonus may only vary according to the level of remuneration, employee classification, effective presence during 2018 and working time. If an employer decides to grant a bonus to all of its employees, only those having earned up to € 53,945 in 2018 will benefit from the exemptions. As a reminder, social contributions amount to up to 25% for employees and 42% for employers. An employee without a spouse or children who earns up to three times the minimum wage, would pay up to 14% of income tax.

This bonus needs to be provided for by a company collective agreement or an agreement entered into with the personnel representatives. It may alternatively be unilaterally determined

Alambret publishes article on the decrease of litigation cases before the labor court in France.

Recent figures issued by the French ministry of Justice point out a decrease of litigation cases before the labor court. What are the reasons of such a trend? The French government outlines the positive impact of the Macron’s reforms. On the other hand, Unions replied that now the employees renounce to claim before the labour court. What are the reasons of this decrease? Could you link it or not to political measures?

Francois Alambret recently published an article regarding this subject on Focus RH, a website dedicated to labor and employment topics and specifically to HR directors or managers. Click this link to read it.

https://www.focusrh.com/strategie-rh/organisation-et-conseil/saisir-les-prud-hommes-est-devenu-plus-complique-31482.html

 

The French law “for the freedom to choose one’s professional future” – Part 2. How it makes gender equality a reality in companies.

September 17, 2018

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Forty-five years after the law “for professional equality,” the wage gap between women and men persists. In order to overcome this, the law “for the freedom to choose one’s professional future” imposes new measures on companies. The French law “for the freedom to choose one’s professional future” was definitively adopted on 1 August 2018 by the French Parliament and approved on 4 September by the Constitutional Council (Decision No. 2018-769 DC of 4 September 2018); it was published in the Journal Officiel on 6 September 2018.

The overriding principle is that all employers must have as an objective the removal of the pay gap between women and men (new article L. 1142-7 of the Labor Code). Further, while there is no penalty for non-compliance with this principle in itself, certain provisions of the law are mandatory and subject to sanctions if not respected.

Of particular note are provisions that apply to companies with at least 50 employees:

  • The employer must annually publish indicators relating to pay gaps and the actions implemented to remove them (the terms and methodology of this annual publication will be defined by decree) (new Article L. 1142-8 of the Labor Code). In the absence of publication, a financial penalty may be applied under conditions determined by decree (yet to be published).
  • If the results obtained by the company are below the indicators defined by the decree, catching-up financial measures must be considered (Article L. 2242-1 of the Labor Code). If no agreement is reached, these

The French law “for the freedom to choose one’s professional future” – Part 1. Preventive measures against sexual harassment and sexual behavior in companies.

September 14, 2018

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The French law “for the freedom to choose one’s professional future” definitively adopted on 1 August 2018 by the French Parliament and approved on 4 September by the Constitutional Council (Decision No. 2018-769 DC of 4 September 2018) was published in the Journal Officiel on 6 September 2018. The law strengthens the fight against sexual harassment and sexist behavior in companies.

Under the new law, by 1 January 2019 at the latest, certain employers will be required to take measures to combat sexual harassment and sexist behavior in the workplace:

  • The obligation to appoint the following points of contact:

(i) A point of contact in companies with at least 250 employees, responsible for guiding, informing and supporting employees in the fight against sexual harassment and sexist behavior (new article L. 1153-5-1 of the French Labor Code). The objective is to enable victims of such acts to identify a contact person within the company.

(ii) A point of contact nominated by a company’s Social and Economic Committee (Comité social et économique) from among its members, regardless of the number of employees, for a period ending with the term of office of the elected members of the Committee (Article L. 2314-1 of the amended French Labor Code).

  • The reinforcement of the obligation to post the civil and criminal consequences of sexual harassment and the contact details of the authorities and competent services in workplaces and on the premises where the hiring is done. The list of these services will
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