Newsletter
June – July 2019
SUMMARY
- NEWS: Flat-rate pay: Three sentences for the Supreme Court’s Social Chamber
- IN-BRIEF : The CJEU charges the Member States to impose an obligatory daily work time monitoring on employers!
- SELECTED NEWSPAPER ARTICLES
NEWS
Flat-rate pay:
Three decisions of the Supreme Court’s Social Chamber
On 27 March 2019, the Social Chamber of the Supreme Court clarified the regime of flat-rate pay agreement in three decisions published in the Bulletin.
This is a particularly significant issue for all employers, since the consequences of cancelling a flat-rate pay agreement can be enormous, with, in the first place the payment of overtime hours up to the previous three years.
It is therefore particularly important to ensure that the flat-rate pay is applicable to the employee, but also to take care of the drafting of the agreement and to monitor its execution correctly.
The first of these judgments (appeal n° 17-31.715) concerns the conditions for the applicability of the flat-rate pay agreement.
Then, the second judgment (appeal n° 17-23.314) settles the question of the limitation period for claims challenging the validity of the annual flat-rate pay agreement.
The last of these judgments (appeal n° 16-23.800) clarifies that the part-time system does not apply to reduced days package.
Cass. Soc., 27 March 2019, n°17-31.715 – Review of the notion of autonomy in the organisation of the working time
The first case concerned a sound engineer hired by Euro Disney in 1999. The latter was ultimately the « event sound designer » and had the status of an executive.
Dismissed in 2013, the employee brought an action before the Labour Court challenging the validity of his flat-rate clause and requesting the payment of overtime and the related leave.
In practice, the dispute over the validity of flat rate pay agreement is polarised between two main arguments, namely the exclusion of the employee from the scope of the flat-rate pay or the absence of implementation of legal and conventional guarantees allowing a satisfactory monitoring of the execution of the agreement.
In the present case, it was the first of these arguments that won the support of the Social Chamber. The latter therefore validated the reasoning of the Court of Appeal leading to the destruction of the fixed price and thus dismissed the company’s appeal.
Indeed, the Court noted that:
- The audio designs of the events for which he was responsible were in fact processed upstream by the sales representatives,
- That he was only responsible for the technical implementation for the audio aspects, that he systematically had manager on site,
- That the duration of his work was predetermined,
- That schedules were set up including the days and time slots in which it had to carry out its operations.
In the end, therefore, a body of evidence allowed the judge to establish that the employee, although an executive, was not autonomous with the organisation of his working schedules and could not therefore be subject to a flat-rate pay agreement.
This decision is in fact a simple application of the legal provisions of Article L. 212-15-3 of the Labour Code, which has now become L. 3121-58.
Although the wording has changed since the 2016 reform, the central concept for assessing the validity of the flat-rate pay agreement remains the same: the autonomy with the organisation of the employee’s working schedules.
More curiously, this judgment is also significant since it confirmed the Court of Appeal’s decision to withdraw debates from canteen tickets that “contained detailed information about the employee’s eating habits” on the grounds that this level of detail contravened CNIL standards protecting the employees’ personal data.
Cass. Soc., 27 March 2019, n°17-23.314 – Limitation of action on the consequences that the inadequacy of a flat-rate pay agreement
In this second case, the employer had opposed the prescription of the action for invalidity of the flat-rate pay agreement. According to him, the challenge to the validity of the agreement had to follow the prescription regime of the first paragraph of Article L. 1471-1 of the Labour Code, which states:
“Any action related to the performance of the employment contract shall be extinguished after two years from the day on which the person exercising it knew or should have known the facts enabling him to exercise his right“.
In this logic, the action was in any event prescribed since either the basis was the non-compliance of the collective agreement, in which case the starting point was the signing of the agreement, or the invalidity resulting from a misapplication of the collective agreement, and in this case, the starting point had to be the day on which the employee became aware of the cause of the invalidity.
However, the Court of Cassation took the opposite view by stating that the validity of the annual flat-rate pay agreement in days may be challenged as long as the request for recall of overtime is not prescribed.
It is therefore a three-year prescription that applies in this case.
Indeed, when an employee asks the judge to invalidate one of these agreements, it is in fact to obtain payment for his overtime hours. In this context, the non-compliance of the fixed price becomes an incidental request to the main request for a back pay. It is therefore the prescription of this last action that must be followed.
The reverse decision would have wrongly allowed the effects of an invalid day package agreement to take effect throughout the life of the contract.
The Court of Cassation therefore decided the issue pragmatically. In this case, however, the contract had been terminated, so the question remains as to the starting point of this prescription when the contract is still in force. Indeed, in the absence of breach of the contract, the starting point for the biennial and triennial prescriptions is the day on which the employee knew or should have known the fact enabling him to exercise his right. In the present case, however, it could be considered that the day of knowledge of the invalidity of the agreement is the day of its signature. The question therefore remains open.
Cass. Soc., 27 March 2019, n°16-23.800 – The fixed price for days of less than 218 days is not a part-time contract
In this third and final judgment, the Social Chamber clarifies that the reduced fixed price is not a part-time one.
The Second Civil Chamber had already had the opportunity speak out in this regard in the context of a dispute over the application of certain social security contribution limits.
This time, the employee wanted the part-time regime to be applied to him in order to be able to request the requalification of the contract as full-time to obtain back pay in particular.
The Court categorically rejects this request under Article L. 3123-1 of the Labour Code by stating that “employees who have concluded a flat-rate pay agreement in days over the year, which number
is less than 218 days, cannot be considered as part-time employees”. However, in this case, the parties had indicated from the beginning on the contract and the amendments that it was part-time.
This solution is logical since the fixed price for days essentially excludes any reference to time and therefore a whole series of legal provisions governing the duration of hourly work.
Similarly, if a reduced flat-rate pay agreement was to be terminated, the contract would be considered full-time, unless it met the formal requirements for part-time work, which is clearly not compatible with the drafting of a flat-rate pay agreement in the first place.
IN BRIEF
The CJEU charges the Member States to impose an obligatory daily work time monitoring on employers!
In its decision dated 14th May 2019, the European Union Court of Justice analysed the compliance of Spanish law to the Charter of Fundamental Rights and to the 2003 directive called « working time ».
The European judge seized the opportunity to affirm that: « the Member States must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured ».
The Court states that a system which purpose is to monitor the working hours is absolutely essential for the compliance of the workers’ rights and also links this system with the general obligation to protect the safety and health of the workers derived from directive 89/391/CEE.
It should be noted that the CJEU reports that : « The objective and reliable determination of the number of hours worked each day and each week is essential in order to establish, on one hand, if the maximum weekly working time defined in Article 6 of Directive 2003/88 [.] and, on the other hand, if the minimum daily and weekly rest periods, defined in Articles 3 and 5 of that directive, were respected ».
Reading this affirmation, it is possible to wonder if such a decision could have an impact on the workers who benefit from a flat-rate pay agreement. Nevertheless, the wording used clearly refers to article 6 of the 2003 directive which provides for the flat-rate exception. Thus, those workers won’t be obliged to check in when entering and leaving. It may be reminded that, despite this exception, those workers must respect the legal dispositions on daily and weekly rests, which are subject to numerous litigations.
Therefore, the Member States must oblige the employers to implement a daily working hour monitoring system. In the end, the CJEU wants to restore the clocking machine. However, the concrete modalities of this monitoring system are left to the Member States’ choice.
Spain has anticipated the CJEU’s decision and, obliged the employers to create and maintain a daily working hour register as soon as the first half of May. Thus, the workers must clock when entering and leaving the office (see our press review on the subject).
PRE-SELECTED PRESS RELEASES
Within this section, you will find some pre-selected press releases prepared for you according to your native language.
