Under French law, the application of a collective bargaining agreement (convention collective) depends on the main activity of the company.
The contents and advantages granted by the collective bargaining agreements are often quite different depending on the status of the employee. Indeed executive employees (cadres) are often granted longer trial periods, notice periods, higher severance indemnities, sick leave payments etc. compared to non-executive employees (employés, agents de maîtrise).
The same comment applies to company’s collective agreements (accords d’entreprise), which are usually negotiated between the company itself on the one hand and trade union delegates on the other hand.
Until recently, this difference of treatment between executive employees and non-executive employees set out in collective agreements appeared as usual, and was not a point of challenge of the employees in case of litigation.
However, on 1 July 2009, the French Supreme Court ruled that the sole difference of status, i.e. executive or non-executive employee, is not in itself sufficient to justify a difference of treatment with regard to the advantages granted to employees in the framework of a collective agreement.
In examining these decisions, all companies were concerned that this could question the distinctions made in the collective agreements they were subject to.
In practice, companies felt at risk that non-executive employees could bring proceedings against them to benefit from the advantages reserved to executive employees set out in collective agreements.
In a recent ruling handed down on 8 June 2011, the French Supreme Court specified the terms of its previous decision in considering that:
- the sole difference of status is not in itself sufficient to justify a difference of treatment between employees;
- but, a difference of treatment can be valid if it is based on objective criteria, taking into account the specific situation of the executive or non-executive status. In particular, the following elements can be used to justify objectively a difference of treatment: conditions of exercise of the employees’ duties, evolution of career, remuneration structure, being specified that this list is not exhaustive.
In this context, French Courts would have to decide whether a benefit reserved to a category of employees can, on the basis of these rules, be regarded us objectively justified.
In practice, it appears as crucial whilst negotiating a collective agreement, that companies have this particular case law in mind to make the right decision when granting benefits to its employees.