On 19 December 2012, the French Supreme Court (‘Cour de cassation’) ruled over a case that should remind any international organization that the worldwide adoption of compliance guidelines and of a Code of Conduct is not in itself a sufficient protection against compliance breaches: everything depends on how these tools are implemented locally.

The case involved a French Director in a health care company who had been dismissed on the grounds of a clear breach of health care compliance obligations set forth in the French Public Health Code. No Code of Conduct was in place when the breach occurred.

Previous breaches had been evidenced and properly documented and the employer’s liability itself had been triggered on these grounds.

Nevertheless, the dismissed employee challenged the termination of her employment contract in front of the French Labour courts. The Industrial Tribunal ruled that the breaches in healthcare compliance justified terminating her for fault. The court of appeal reversed the decision, and was confirmed by the French Supreme Court, which ruled that the dismissal was without real or serious cause, i.e., that no professional fault was implied by the aforementioned compliance breaches. The court’s view was that the breach of health care compliance legal provisions was not enough to qualify a professional fault, even though the company was liable for these compliance breaches.

This decision deserves particular attention: even though a company is acting in a highly regulated environment such as health care, compliance breaches must be integrated in the employer-employee relationship if they are to justify termination in France.

Adopting a worldwide Code of Conduct will not suffice to hold employees liable for compliance violations: according to French labour law, it will be necessary to integrate the provisions of the Code of Conduct into the Company’s internal regulations (“règlement intérieur”) to make them enforceable against employees.

To that end:

  • The staff representatives/works council must be informed and consulted on the contents of the Code of Conduct
  • The Code of Conduct must be filed with the French Labour Inspector

International organisations should therefore keep in mind that adopting a harmonized Code of Conduct, which is a complex work on its own, will be worthless to prevent risk if it is not adequately implemented locally.