New developments on platform workers, unilateral undertakings and judicial settlements.

The European Parliament adopts the directive improving working conditions of platform workers

On April 24, the European Parliament adopted the Directive of the European Parliament and Council (COM (2021) 0762) on the improvement of working conditions for platform workers. An agreement on a draft directive had been reached on February 8, 2024 between the European Parliament and the Council, and the EU Ministers for Employment and Social Affairs had confirmed their agreement with the draft text last March 11.

Article 4 of this directive introduces a presumption of salaried status for all platform workers, provided that the digital platform they work for controls certain aspects of the performance of the work carried out.

This same article, which was debated at length, defines the criteria indicating when the digital platform controls the performance of work, namely when:

• it effectively determines the level of remuneration, or sets remuneration ceilings;
• requires the worker to comply with specific mandatory rules regarding appearance, conduct towards the recipient of the service or the performance of the work;
• supervises the execution of work or checks the quality of work results, particularly by electronic means;
• effectively limits, including by means of sanctions, the freedom of the person performing work via a platform to organize their work, in particular their freedom to choose their working hours or periods of absence, to accept or refuse tasks or to use subcontractors or replacements;
• effectively limits the ability of a person performing work via a platform to build up a clientele or perform work for a third party.

The presumption of salaried status applies when at least two of the above indicators are met.

It is up to each member state to establish a framework to ensure that this legal presumption applies in all relevant administrative and judicial proceedings, and that enforcement authorities such as labor inspectorates or social administration bodies can also rely on this presumption. Article 4 does specify, however, that the legal presumption should not have retroactive effects, being intended to apply only to situations arising after the transposition of the directive.

In addition, Article 5 guarantees platforms the possibility of rebutting this legal presumption, by proving that the contractual relationship in question is not an employment relationship within the meaning of the definition in force in the Member State concerned.

Once the directive has been published in the Official Journal, France, which strongly opposed its adoption, will have two years to transpose it into national law.

This transposition will inevitably entail a substantial compliance effort, since French law currently provides for a presumption of non-salaried status for platform workers. (FLC, L. 8221-6) In addition, it will have to review its evidentiary regime, which today places the burden of proof of the existence of an employment relationship on platform workers seeking recognition of their salaried status. In application of the directive, this burden will now rest on the platforms, which will have to demonstrate the absence of an employment relationship and the independence of their workers in the event of a dispute.

Although not as popular amongst commentators, the directive also contains provisions aimed at framing platforms' use of algorithms for human resource management purposes. Articles 6 to 8 in its third chapter provide that decisions that have a significant impact on the working conditions of platform workers, taken or supported by automated means must be monitored and controlled by natural persons, with the necessary competence, training and authority to exercise this control. In addition, these provisions will enable platform workers to request a motivated response on the rationale behind these decisions, and will be able to appeal them, where appropriate.

Unilateral fixed - term undertaking: terminated without formality at the end of the term

In a decision handed down on April 3 (Cass. soc., April 3, 2024, no. 22-16.937), the French Supreme Court (“cour de cassation”) reiterated its position that a fixed-term undertaking entered into unilaterally by an employer ceases to have effect at the end of the fixed term, without the employer being obliged to comply with any specific formalities.

In the case at hand, La Poste had adopted an internal memorandum (entitled "bulletin ressources humaines") dated March 28, 2013, which stipulated that “for all projects impacting the organization and operation of services, [...] a period of two full years must elapse between two consecutive projects”. This measure, initially valid from January 22, 2013 to January 21, 2016, was extended by successive addendums to the initial memorandum until December 31, 2020.

Although no additional note provided for the extension of this undertaking beyond the latter date, the Health, Safety and Working Conditions Committee (“CHSCT”) and a trade union objected to the implementation, in February 2021, of a reorganization project within the company, arguing that the undertaking constituted a customary practice (“usage”). As a result, the employer had to respect a period of two full years between two consecutive projects impacting the organization and operation of the company.

The Versailles Court of Appeal upheld the suspension of the reorganization measure. In its view, the commitment stemming from this internal memo could be qualified as a customary practice, since it was a constant and fixed rule, applied uninterruptedly since 2013. To put an end to a customary practice, the employer therefore had to comply with the denunciation procedure, which implied giving sufficient notice and informing staff representatives and employees, which had not been the case in this instance.

The French Supreme Court disagreed with the lower courts’ analysis. Overturning the decision of the Court of Appeals, it ruled on April 3 that the disputed measure was the result, not of a customary practice, but of a unilateral fixed-term undertaking (“engagement unilateral de l’employeur à durée déterminée”), which logically ceases to have effect at its fixed term, without the employer being required to comply with any specific formality (i.e., prior notification of staff representatives, prior information of employees).

The cour de cassation makes a clear distinction between a customary practice (“usage”), which is the result of the implicit will of the parties and must be terminated, and the unilateral fixed-term commitment, which is the result of the explicit will of the employer and ceases to apply on the date he has set, without having to comply with any particular formality.

In this case, the commitment in question was the result of the employer's explicit and unilateral will, which was formalized in writing in the aforementioned human resources bulletin. The undertaking was always renewed for a fixed term, until December 31, 2020, the last date set. The fact that the commitment was applied uninterruptedly since 2013 does not alter the legal nature of the commitment.

The employer was therefore bound by a customary rule and did not have to respect a two-year period between the last two reorganizations as a consequence.

A conciliation agreement drafted in general terms may include claims relating to performance of the employment contract.

In a recent ruling (Cass. soc., April 24, 2024, n°22-20.472) an employee, who had been hired as an account manager in a public relations consultancy, was dismissed during 2018. She lodged an initial complaint with the Paris’ Labour court (Conseil de Prud'hommes de Paris) against her dismissal, which resulted in the signing of a conciliation agreement (“procès-verbal de conciliation”) before the conciliation office of the court (“Bureau de Conciliation et d’Orientation”) on November 28, 2018.

Under the terms of this agreement, the employee waived “all claims and indemnities and all proceedings and actions in respect of any dispute arising or to arise from the employment contract and the employee's corporate office”, in return for a “global, lump-sum, transactional and definitive” indemnity.

However, a few months later, the employee sued her employer for payment of the financial compensation for the non-compete clause.

The lower courts rejected her request, so she appealed to the French Supreme Court (“cour de cassation”), arguing that the compensation of the non-compete did not fall within the scope of the settlement. She argued that, on the contrary, the conciliation agreement only related to claims regarding her dismissal.

It should be remembered that the French Labor Code provides that the Labour court (“Conseil de prud'hommes”) settles by conciliation any disputes that may arise in connection with any employment contract between employers, or their representatives, and their employees. (FLC, art. L. 1411-1) In addition, article L. 1235-1 of the French Labor Code stipulates that the agreement referred to in article L. 1411-1 “provides for the payment by the employer to the employee of a lump-sum indemnity, the amount of which is determined [...] by reference to a scale set by decree according to the employee's length of service", as set out in article D. 1235-21, and that this agreement “constitutes a waiver by the parties of all claims and indemnities relating to the termination of the employment contract.”

As a result, there was some debate among practitioners as to whether the conciliation agreement signed before the Labour court should expressly provide for a waiver of any dispute concerning the performance of the employment contract. Due to the uncertainty, practitioners recommended signing a complementary settlement concerning the performance of the employment contract in addition to signing a conciliation agreement before the court.

In this ruling, the cour de cassation recalls that the conciliation office of the court (“Bureau de Conciliation et d’Orientation”) has general jurisdiction to settle any dispute arising from the employment contract. After reiterating this principle, it dismissed the employee's appeal, arguing that parties who appear voluntarily before the court are free to extend the scope of their conciliation agreement to issues going beyond severance pay. Having therefore drafted their settlement agreement in sufficiently broad terms, the cour de cassation ruled that the settlement covered all claims relating to the non-compete clause contained in the employee's contract.

In this recent decision, the French Labour Court approves the practice of putting an end to any dispute relating to the employment contract, and not exclusively to its termination, in return for the payment of a lump-sum indemnity.

Nevertheless, the ruling leaves two areas of certainties future settlements. On the one hand, it does not clarify the interplay between articles L. 1411-1, L. 1235-1 and D. 1235-21 of the French Labor Code, and the possibility of benefiting from the preferential tax treatment provided for the payment of conciliation indemnities in accordance with the scale, in the event that the conciliation does not relate exclusively to the termination of the employment contract.

It should also be remembered that, while a contractual settlement indemnity may generate a specific deferral of compensation for unemployment benefit of several months, the indemnity paid during a conciliation before the Labour Court is excluded from the basis for calculating the specific deferral of unemployment compensation.

However, the April 24 decision does not protect the parties against the difficulties that could arise, for the calculation of the deferred compensation, from the payment of a “mixed” conciliation indemnity, part of which would be paid to settle disputes regarding the performance of the employment contract and part to settle claims relating to the termination.

Authored by Thierry Meillat and Cristina Sanchez Herran.