French Supreme Court Revises Position on Equal Treatment for Employment Benefits
By Rick Mitchell
PARIS--The labor chamber of France's highest appeals court published two major decisions June 8 partially easing the effect on human resources management of two earlier decisions requiring employers to provide equal benefits to different categories of employees, practitioners told BNA June 10.
In the new decisions ( Novartis Pharma vs. M.C. X, Cass. Soc., No. 10-14.725, 6/8/11; Sopafom vs M.Y.X. and Pole Emploi Alsace, Cass. Soc., No. 10-11.933 / 10-13.663, 6/8/11), the Cassation Court ruled that collective bargaining agreements can provide different benefits to different categories of employees if these differences are based on “relevant, objective reasons,” said Claire Toumieux, a Paris-based attorney for law firm Flichy Grangé Avocats.
The decisions mark a partial retreat from the same court's rulings in 2008 and 2009, Toumieux said, in which it essentially required companies to give equal treatment for benefits to management and non-management employees.
“The court realized that it had gone too far, that the [earlier] decisions had a huge economic impact, and basically neither employers nor employee unions welcomed them,” Toumieux said.
The new decisions are “a significant step forward,” according to Bernard Valette, an official for collective bargaining at the CFE-CGC union of managers, engineers, technicians, sales forces, and first-line supervisors. “What's really important is that it confirms that differences in benefits can be accorded in collective bargaining agreements.”
A ‘Tsunami' in the HR World
In its landmark 1996 Ponsolle decision, (Cass. Soc., 10/29/1996, No. 92-43.680), the Cassation Court established that employees doing equal work must receive equal pay unless a difference can be justified by an objective standard.
In 2008 (Bensoussan vs. Meier, Cass. soc. 2/20/2008, No. 05-45.601), the court took a step further, ruling that a law firm that provided meal vouchers to non-management employees must also make these available to management or executive-level employees, Toumieux said.
This decision attacked a basic distinction that has long existed in French labor relations between so-called “cadres,” executive or management-level employees, and “non-cadres,” that is, non-management employees. In France, collective bargaining agreements typically set out different benefits and conditions of employment for the different categories of workers, Toumieux said.
In a July 2009 decision (DHL vs. Pain, Cass. Soc, 7/1/2009, No. 07.42675), the court went still further, ruling that management-level employees could not receive more vacation days than non-management-level employees.
The 2008 and 2009 rulings established that courts have the power to determine on a benefit-by-benefit basis whether companies' human resources policies are valid, Toumieux said.
“These rulings would create a tsunami in the human resources management world because they mean that all policies either at national, sector, or company level must be reviewed,” Toumieux said. “We are seeing more and more litigation on the subject.”
“I'm not sure even trade unions wanted to go this far,” she added.
‘Disbelief'
“I think companies have been in a state of disbelief, because this essentially obligates them to completely change their policies,” Toumieux continued. “In big companies, human resource managers have these rulings in mind as they conduct [legally required] annual negotiations on wages and working time, but it takes time after such decisions before the companies start changing their policies.”
For Valette, differences in benefits between categories of employees are clearly justified by differences in job requirements.
“The benefits correspond to employment situations that are very different,” he said. “The management-level employee has very significant autonomy, responsibility, constraints, and other requirements, and all these things have consequences that should be compensated.”
Benefit distinctions between employee categories will continue to exist whether or not they can be written into collective bargaining agreements, according to Valette.
“If the court had maintained its position, it would have been necessary for management employees to negotiate their benefits on an individual basis,” he said, “and of course that would give much more power to employers. That would have reduced protection for workers.”
Court ‘Willing To Amend Its Position'
In response to an outcry over the 2008-2009 rulings, the Cassation Court at the beginning of 2011 held hearings with representatives of both labor and employers.
“The new decisions,” Valette said, “show it is willing to amend its position.”
“We would have preferred that the court completely reverse the 2008 and 2009 decisions,” he added, “and return to its 1996 position, but of course that would be difficult. The position we would like is one that clearly affirms that a collective agreement can take account of very particular employment conditions faced by management-level employees.”
As it stands, the decision still allows the court to strike down collective bargaining agreements, but the new position is at least a step forward, Valette said.
Toumieux agreed that the rulings are a step in the right direction from the employer's point of view, but noted that the court has not clearly repudiated the equal treatment principle articulated in the previous cases and that, by shifting the debate back to the lower appeals courts, the decision leaves major legal uncertainty for companies.
“Companies are worried because the court has here provided very vague guidelines,” Toumieux said, “and we don't know what the appeals courts are going to do.”
(Appeared June 13, 2011)
