Social / Legal transfer

Social / Legal transfer

The new development: The Court of Cassation has made a significant departure from case law by neutralising the principle of equal treatment in the case of a legal transfer of employment contracts following a business takeover.

From now on, employees of the company joining the business may no longer lay claim to the extension, to their advantage, of the contractual benefits from which employees initially assigned to the business benefited.

This position constitutes a departure from case law as the judges of the Court of Cassation hitherto believed that in the case of a legal transfer of employment contracts, employees of the joining company could claim the right to the contractual benefits which the employees taken over following the loss of the contract enjoyed, particularly in the case of a contractual 13th-month bonus.

The Court of Cassation now pursues the following line of reasoning: the difference in treatment between employees whose employment contract is transferred pursuant to an employment guarantee instituted by agreement and the employees of the joining employer, resulting from the obligation which must be upheld by the latter to maintain for the transferred employees the rights afforded to them by their former employer on the day of the transfer, is justified with regard to the principle of equal treatment.

The Court of Cassation made this departure from case law in order to comply with the new article L 1224-3-2 of the French Labour Code amended by the Macron Executive Order No. 2017-1387 of 22 September 2017.

Cass. soc. 30 November 2017 No. 16-20.535.

Our comments: we must remain vigilant with regard to this concept of equal treatment, as the Court of Cassation issued an opinion on contractual benefits. In our view, the question remains just as significant for the non-contractual benefits that employees from the business which was taken over, and not the employees from the joining company, benefited from, non-contractual benefits which are difficult to identify and deal with.

12 Dec 2017|Categories: Publications|