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The employment status challenge: Key considerations for employers in France

20 April 2022

With labour supply a top priority for employers, our employment experts in France consider the importance of the distinction between different employment statuses. 

When engaging the workforce how does the law distinguish between different categories of employment status?

In France, only one category of employment status exists: the employee status. The distinctions made in the UK have no equivalent in France. 

Amongst employees, some are workers, some are employees, others are supervisors and finally some are managers. This difference entails consequences in terms of probation period or working time for instance. But the status is still the one of employee.

For your full information, a self-employed individual is not an employee in the sense that he or she carries out an economic activity on his or her own account, independently, and is not subject to employment law. An employee is not a corporate officer either. The corporate officer is the legal representative of a legal entity, appointed by the shareholders, subject to corporate law. He or she has not signed any employment contract. 

What are the different rights and protections for each employment status?

The most protective status is that of employee, to which the Labour Code applies. In particular, there are rules concerning dismissal, benefits, unemployment cover or paid leaves that are not applicable to non-employees. 

What are the current themes with regard to employment status?

As the employment status is more protective than the self-employed status, the trend is for a self-employed individual to seek the recognition of an employment contract. 

In this context, the reclassification of platform self-employees into standard employees is a trend that is weakening the business model of several large global companies.

Case law has defined salaried work by three criteria:

  • the establishment of a contract,
  • the payment of remuneration and
  • the existence of a relationship of subordination.

When assessing whether a self-employed individual should be viewed as an employee, case law tries to identify the above criteria.

The criterion of the relationship of subordination is the keystone of the reclassification into an employment contract. Case law deduces this link of subordination from the power of the employer:

  • to give directives: impossibility to refuse a delivery, impossibility to fix his or her schedule, mandatory routes to follow, impossibility to set the delivery price, etc..
  • to control their implementation, i.e. to control the self-employed work: to provide equipment (held with the name of company, office, business card, letterhead, telephone line, e-mail address), to localise the self-employed to count the total number of kilometres travelled and the route taken, to assess the self-employed delivery, etc., and 
  • to sanction breaches.

If the judge considers that the above criteria are present in the relationship between the self-employed individual and the principal, then they will reclassify the self-employed contract as an employment contract. 

In the case of reclassification by the judge, the financial consequences are significant: payment of termination indemnities, notice period, paid leaves (if the contract has ended), damages, lump-sum indemnity of six months' salary for undeclared work, payment of employer's and employee's social contributions since the hiring, etc.

Get an insight into the current situation in other jurisdictions from our global legal team.

 

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