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The Supreme Court provides (some) flexibility to fixed-term contracts

16 décembre 2021

The recourse to fixed-term contracts is strictly regulated by French law:

 

  • This type of contract cannot be used to supply workforce on a long-term basis in connection with the normal and constant activity of the company. Consequently, it may only be used for the performance of precise and temporary tasks, in particular for the replacement of an employee, a temporary increase in the company’s activity, the execution of a job of a seasonal nature or for which it is customary to enter into a fixed-term employment contract. If the employment relationship continues after the end of the fixed-term contract, it is automatically characterized into a indefinite-term contract.

  • The fixed-term contract must be in writing and contain a certain number of mandatory information such as the term of the contract or the reason for its use. When it comes to fixed-term contracts concluded for the replacement of an employee, companies should also remember to include in writing in the contract the name, position and classification of the replaced employee as well as, if possible, the estimated returning date.

  • Furthermore, in order to limit any abusive recourse to this type of precarious contracts, the French Labour Code provides for a minimum period of time that must elapse between two fixed-term contracts on the same position in the company. This waiting period (“délai de carence”) between the end of the first fixed-term contract and the start of the next fixed-term contract is usually calculated as follows (provided that a collective bargaining agreement does not provide for another duration):

– If the total duration of the first fixed-term contract is less than 14 days, the duration of the waiting period amounts to half the duration of this first contract,

– If the total duration of the first fixed-term contract exceeds the above-mentioned length, the waiting period is equal to 1/3rd of the duration of this contract.

 

For example, an employee who has worked for 3 months under a fixed-term contract will not be able to enter into a new fixed-term contract on the same position for 1 month after the end of the first contract.

 

The above-mentioned criteria and formalities should always be applied with great care. Otherwise, fixed-term employees can ask for the characterization of their fixed-term contracts into an indefinite-term contract and seek for the payment of damages (mainly if the fixed-term contract has ended which could lead to a characterization into an unfair dismissal).

 

This being reminded, and as one can expect with French law, the rules regarding the waiting period between two fixed-term contracts are not as simple as described above. Indeed, some accommodations enable the employer to conclude back-to-back fixed-term contracts with the same employee on the same position. This is mainly the case when the fixed-term contract is concluded for the temporary replacement of an employee, when the absence of the employee is renewed (article L. 1244-4-1 of the French Labor Code). Furthermore, article L. 1244-1 of the French Labor Code allows for the conclusion of a series of fixed-term contracts with the same employee for the replacement of an absent employee.

 

In the case at hand, an employee had signed four consecutive fixed-term contracts in order to replace four different employees.

 

He later filed a claim in front of the French employment Tribunal asking for the characterization of his fixed-term contracts into an indefinite-term contract. The claimant was mainly arguing that his former employer had not complied with article L. 1244-1 of the French Labor Code regarding waiting periods between his successive fixed-term contracts. In this regard, the employee claimed that the employer was only exempted from providing a waiting period when the employee is covering the replacement of one single employee.

 

The Court of appeal had approved the employee’s reasoning and had ordered the payment of various damages. The judges had indeed found that the aforementioned provision of the French Labor Code was exempting the employer from a waiting period in case of new absence by the one employee as initially replaced. As a result, the judges ruled that concluding four different fixed-term contracts for the replacement of four different employees was contrary to the terms of the above-mentioned provision.

 

Yet, the French Supreme Court judges overruled this decision (see. FSC, 17 Nov. 2021, n° 20-18.336) and decided that article L. 1244-1 of the French Labor Code does not limit the number of successive fixed-term contracts that can be concluded to replace absent employees without the application of a waiting period, provided that the fixed-term contract are all for the same job position (i.e. incur the same type of missions).

 

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While this type of decision is not new (the French Supreme Court had already issued similar decision in 2009 and 2013 – see. FSC, 16 sept. 2009, n°08-40.187 & FSC, 4 Dec. 2013, n°12-29.170), it is interesting to note that Supreme Court judges have a flexible approach and uphold a more liberal interpretation of some of the rules governing fixed-term contracts.

 

Yet, employers should not be too distracted by such decision and bear in mind when entering into fixed-term contracts that (i.) the contracts should always be in writing (a different fixed-term contract must in this regard be concluded for every new replacement) and (ii.) that the fixed-term contract cannot be used to supply labour on a long-term basis (see above). As a result, employers are invited to handle with great care the cases in which they use precarious contracts and ensure that all formalities are complied with in order to avoid subsequent litigation and risks of characterization of the fixed-term relationship into an indefinite-term contract (with the associated – and sometimes substantial – damages).