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Enforceability of Code of conduct in France

11 juin 2021

Code of ethics or code of conduct serve two main purposes: they are a set of internal guidelines for employees to follow but also serve as an external statement of corporate values and commitments.

At a time when every company wants to stand out as unique and build a strong corporate culture, codes of conduct are a good medium to define the company’s values and to provide employees with standards that they will share and live up to.

In this context, we are witnessing a spread of cross-border codes of conducts that are meant to apply alike throughout the countries where international groups are operating. 

In order to ensure that global codes of conducts are enforceable under French Law, companies must make sure to comply with a certain number of prerequisites:

1. It should be reminded that, in France, Internal regulations (“Règlement intérieur”) are required for any company with 50 or more employees:

–         The document must be drafted in French by the employer and be applied to all employees.

–         When drafting the internal regulations, the employer must consult the social and economic committee (“CSE”).

–         Once the opinion of the staff representatives has been obtained, the regulations are submitted to the Labour Inspectorate who is meant to confirm the lawfulness of the regulations.

–         The document must also be filed with the court clerk of the employment tribunal having jurisdiction.

–         Finally, the document must be displayed on the work premises and in the area where employees are hired. (Article L. 1321-4 of the French Labor Code).

This being said, service notes or any other documents that provide general and permanent obligations incumbent on the employees in the areas usually covered by internal regulations (i.e. mainly health and safety and discipline) should be regarded as an addition to these international regulations and therefore be subject to the above-described process.

This is mainly the case when it comes to codes of conduct that include ethical rules that may be sanctioned by the employer. In this regard, the French Supreme Court recently ruled that a code of ethics that has been implemented in accordance with French law requirements is enforceable against the company’s employees. (FSP, May 5, 2021, n°19-25.699)

On the contrary, failure to comply with this process is likely to make the code of conduct unenforceable so much that an employer would not be able to discipline an employee on the ground that they have breached its provisions.

2. Furthermore, when drafting global codes of conduct, companies should ensure that the rules provided in these policies are always subject “to applicable local laws”. Indeed, some policies might contain provisions that are not adapted to French culture or even inconsistent with French Laws and regulations.

For example:

–         Some codes of conduct allow companies to frisk employees suspected of theft while French case law makes it clear that the employee’s consent is required except in a few exceptional cases,

–         Provisions that forbid personal relationships between employees of the same company could be regarded under French Law as an invasion of privacy,

–         The French Labor Code includes specific provisions regarding harassment, discrimination and sexist behaviors (being noted that it is mandatory to include these provisions in the Internal regulations). We often note that global codes of conducts including provisions covering this same topic are inconsistent with French regulation.

This is even truer when it comes to generic provisions often included in global policies regarding conflicts of interest or bribery / corruption. Companies must make sure that these provisions are in compliance with French regulations regarding whistleblowing, failing what they could be regarded as unenforceable.

Following the enactment of the SOX Law (Sarbanes-Oxley Law) in 2002 – which triggered the implementation of codes of ethics in most US-based companies – the French administration has issued a practical guide for Labour Inspectors to help them assess the validity of provisions included in codes of ethics (see. Ministerial circular n°2008-22 of November 19, 2008 regarding Codes of Ethics, Whistleblowing and Internal Regulations). The creation of a specific status for whistleblowers in the 2016 “Sapin II” Act should also be taken into account when implementing codes of conduct within French companies.