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Employment contracts and any documents related thereto must be drafted in French

Ultima modifica: 11 Lug 2011

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Date : 8 juillet 2011 21:53:47 GMT+02:00  
Objet : Flash >>> French Supreme Court recall > Employment contracts and any documents related thereto must be necessarily drafted in French

 

The French Supreme Court (Cour de Cassation) recalls that employment contracts and any documents related thereto must be necessarily drafted in French. Otherwise, they are not enforceable against the employee.

The French Supreme Court has just rendered an important ruling (arrêt) which simply recalls a well-known principle of labor law but whose practical consequences are in fact significant for international firms and groups within which business and labor relations are carried out in a foreign language.

It should be recalled that pursuant to the provisions of the Toubon Law (Loi Toubon) of August 4, 1994, any employment contract must be written in French and the terms of a contract that is not drafted in French or translated into French may not validly be asserted against the employee by the employer (Article L. 1221-3 of the French Labor Code).

Article L.1321-6 of the French Labor Code supplements such provisions by stating that any document containing obligations for the employee or provisions whose knowledge is necessary for the performance of his/her work must be written in French.

The Supreme Courts ruling of June 29, 2011 was rendered precisely on the basis of the above article which, up until now, had resulted in very few practical applications.

According to this ruling, the Supreme Court considered that the French language legal requirement was to apply also to documents setting the targets necessary for the determination of the contractual variable incentive compensation.

The Supreme Court ruled that a bonus plan, written in English and determining, at the group lev el, the variable incentive compensation policies applicable to executives (the fact that the executive was working and speaking in English to perform his duties has been considered irrelevant) as well as the corresponding individual and collective targets, was unenforceable against the employee if it was not written in French. Therefore, such executive was entitled to benefit from the maximum variable incentive compensation provided for by his/her French employment contract, regardless of his level of achievement of the targets set by the English language plan.

In other words, if the targets are not drafted in French at the time of remittance of such plans (or any other documents) they are unenforceable against the employee.

Besides, and based on such decision, it is very likely that any restrictions (such as targets, performance, presenceA 533;) contained in a stock-option, free stock or any other bonus plan may be deemed unenforceable as well, if drafted in a foreign language.

Language relating to bonus, stock included in Employment agreements drafted in French will prevail and be enforceable notwithstanding any provisions contained in a non French language document. .

In addition, secondment agreements referring to an international mobility policy of the group, written in a foreign language, and in particular to the conditions relating to tax equalization, could also be challenged. For example, employees could thus refuse the hypothetical tax deduction provided for in the contract, arguing that it could only be determined depending on another document written in a foreign language.

Therefore, we strongly recommend that companies belonging to an international group systematically translate into French any internal policy or plan intended to apply to French employees, in order to enforce such policies vis à vis employees working under a French employment agreement.

Labor law department

August & Debouzy