The latest developments in international mobility law

The latest developments in international mobility law

(By Francis Collin, Attorney at Law at the Paris Bar, Villemot, Barthès & Associés)
Over the last few months international mobility law has undergone several important changes, essentially relating to employees of foreign companies on secondment in France.
As this relates to the general legal framework for postings, including employees posted abroad, certain recent case law merits closer attention.
 
Secondment to France and the host company’s duty of vigilance

French law (notably the Law of 8 August 2016 and the Decree of 7 May 2017) has strengthened the obligations of foreign employers (home employers) and French companies (host companies) when employees are posted to France.

These regulations apply both to intra-group postings (performing a service provision or making an employee available on a non-profit making basis within the same Group) (L 1262-1 of the French Labour Code).

The seconded employee remains under contract with his/her employer based abroad, with said employer responsible for paying the employee’s remuneration.

The employee has no contractual link with the French host company or establishment.

For the duration of the posting in France, the foreign employer shall be subject to the provisions of French labour law provided for under Article L. 1262-4 of the French Labour Code (notably vis-à-vis remuneration, professional equality, working hours, working conditions and accommodation). However, seconded employees shall not be subject to the provisions that govern ending or terminating an employment contract, training, insurance, etc. The applicable law for seconded employees shall be that of the home country.

Before the start of the posting the employer based abroad shall send a posting declaration to the local unit of the DIRECCTE in the region where the posting shall take place (sent electronically using the French Ministry for Employment’s “Sipsi” teleservice).

The French host company shall verify that the home employer has fulfilled its obligations (duty of vigilance). Prior to each posting, the host company shall request that the home company provides a copy of the posting declaration (R. 1263-12-1 of the French Labour Code), a copy of the document specifying the representative in France and the Social Security registration form for the employee seconded to France.

If the employer based abroad does not provide a copy of the posting declaration, the French company shall send an ancillary posting declaration to the work Inspector for the offices where the secondment will start, within 48 hours of the start of said secondment (“déclaration subsidiaire de détachement”, currently available as a paper form and exclusively online as of 1 January 2018).

Failure to provide said declarations shall mean that the French company is liable to be subject to criminal sanctions and the suspension of the provision of services for a maximum period of 1 month.

Vis-à-vis EU law, a draft agreement revising Directive 96/71/EC of 16 December 1996 relating to the posting of workers is currently under discussion. Even though this subject is a source of conflict between EU Member States, a revision of the Directive in the next few months is still a possibility and will give rise to certain practical modifications vis-à-vis transnational postings. This is an important issue to keep an eye on.
 
The weight of the A1 Certificate (formerly E101)

A recent ruling by the Court of Justice of the European Union (CJEU), handed down following a preliminary ruling by the Court of Cassation in a plenary session, confirms the weight of the E 101 certificate (now known as A1 following EU regulation No. 883/2004 and No. 987/2009) even if said certificate is clearly invalid. (CJEU, 1st ch. 27 April 2017, case 620/15, A-Rosa Flussschiff GmbH v URSSAF d’Alsace).
“Article 12a(1a) of Regulation No 574/72, which governs the terms and conditions for enforcing regulation 1408/71, is to be interpreted as meaning that an E 101 certificate issued by the institution designated by the competent authority of a Member State pursuant to Article 14(2)(a) of Regulation No 1408/71 is binding on both the social security institutions of the Member State in which the work is carried out and the courts of that Member State, even where it is found by those courts that the conditions under which the worker concerned carries out his activities clearly do not fall within the material scope of that provision of Regulation No 1408/71.”

This decision is transposable within the scope of Regulation 883/2004.

Currently, the only possible outcome is related to the decision of the issuing institution to withdraw or cancel the issuing of the certificate. Such a decision shall apply, at the very least, for cases of fraud. Improvements to the procedure for issuing and contesting a posting certificate are currently being reviewed by the EU Commission.
 
Amicable termination of an employment contract when expatriated abroad

How can an amicable termination of a French employment contract be organised when an employee is definitively transferred to another company abroad within the Group?

In a ruling of 15 October 2014, the Court of Cassation ruled that amicable termination of a contract between an employee and the home company within the context of an intra-group transfer is invalid (Cass. Soc, 15 Oct. 2014, No.11-22.251). The Court of Cassation specified that, except where otherwise provided for by law, an employment contract can only be terminated under the conditions provided for by Article L. 1237-11 et seq. of the French Labour Code relating to legally approved contractual termination.

The Court of Cassation revised its decision of 2014, admitting that the provisions relating to legally approved contractual termination between the employee and the employer are not applicable to a tripartite agreement between an employee and two successive employers, designed to define the arrangements for the continuation of an employment contract rather than the termination of a contract. (Cass. soc, 8 June 2016, No. 15-17.555). This ruling, notably in view of Article 1134 of the French Civil Code, confirms the possibility of an amicable termination without a contractual termination of an employment contract, governed by Article L. 1237-11 et seq. of the French Labour Code. In the present case, it related to an intra-group transfer and the transfer agreement provided for a higher classification, that the employee would retain his/her seniority and that there would be no trial period.

This judgment recognises again, therefore, the legal validity and efficiency of tripartite agreements for organising postings within a Group. However, in the specific context of international mobility, this solution does not exclude the interest, or necessity, of drawing up an additional contractual document with the new (foreign) employer specifying the contractual terms and conditions (notably the applicable law for the employment contract).
Over the last few months international mobility law has undergone several important changes, essentially relating to employees of foreign companies on secondment in France.
As this relates to the general legal framework for postings, including employees posted abroad, certain recent case law merits closer attention.
 
Secondment to France and the host company’s duty of vigilance

French law (notably the Law of 8 August 2016 and the Decree of 7 May 2017) has strengthened the obligations of foreign employers (home employers) and French companies (host companies) when employees are posted to France.

These regulations apply both to intra-group postings (performing a service provision or making an employee available on a non-profit making basis within the same Group) (L 1262-1 of the French Labour Code).

The seconded employee remains under contract with his/her employer based abroad, with said employer responsible for paying the employee’s remuneration.

The employee has no contractual link with the French host company or establishment.

For the duration of the posting in France, the foreign employer shall be subject to the provisions of French labour law provided for under Article L. 1262-4 of the French Labour Code (notably vis-à-vis remuneration, professional equality, working hours, working conditions and accommodation). However, seconded employees shall not be subject to the provisions that govern ending or terminating an employment contract, training, insurance, etc. The applicable law for seconded employees shall be that of the home country.

Before the start of the posting the employer based abroad shall send a posting declaration to the local unit of the DIRECCTE in the region where the posting shall take place (sent electronically using the French Ministry for Employment’s “Sipsi” teleservice).

The French host company shall verify that the home employer has fulfilled its obligations (duty of vigilance). Prior to each posting, the host company shall request that the home company provides a copy of the posting declaration (R. 1263-12-1 of the French Labour Code), a copy of the document specifying the representative in France and the Social Security registration form for the employee seconded to France.

If the employer based abroad does not provide a copy of the posting declaration, the French company shall send an ancillary posting declaration to the work Inspector for the offices where the secondment will start, within 48 hours of the start of said secondment (“déclaration subsidiaire de détachement”, currently available as a paper form and exclusively online as of 1 January 2018).

Failure to provide said declarations shall mean that the French company is liable to be subject to criminal sanctions and the suspension of the provision of services for a maximum period of 1 month.

Vis-à-vis EU law, a draft agreement revising Directive 96/71/EC of 16 December 1996 relating to the posting of workers is currently under discussion. Even though this subject is a source of conflict between EU Member States, a revision of the Directive in the next few months is still a possibility and will give rise to certain practical modifications vis-à-vis transnational postings. This is an important issue to keep an eye on.
 
The weight of the A1 Certificate (formerly E101)

A recent ruling by the Court of Justice of the European Union (CJEU), handed down following a preliminary ruling by the Court of Cassation in a plenary session, confirms the weight of the E 101 certificate (now known as A1 following EU regulation No. 883/2004 and No. 987/2009) even if said certificate is clearly invalid. (CJEU, 1st ch. 27 April 2017, case 620/15, A-Rosa Flussschiff GmbH v URSSAF d’Alsace).
“Article 12a(1a) of Regulation No 574/72, which governs the terms and conditions for enforcing regulation 1408/71, is to be interpreted as meaning that an E 101 certificate issued by the institution designated by the competent authority of a Member State pursuant to Article 14(2)(a) of Regulation No 1408/71 is binding on both the social security institutions of the Member State in which the work is carried out and the courts of that Member State, even where it is found by those courts that the conditions under which the worker concerned carries out his activities clearly do not fall within the material scope of that provision of Regulation No 1408/71.”

This decision is transposable within the scope of Regulation 883/2004.

Currently, the only possible outcome is related to the decision of the issuing institution to withdraw or cancel the issuing of the certificate. Such a decision shall apply, at the very least, for cases of fraud. Improvements to the procedure for issuing and contesting a posting certificate are currently being reviewed by the EU Commission.
 
Amicable termination of an employment contract when expatriated abroad

How can an amicable termination of a French employment contract be organised when an employee is definitively transferred to another company abroad within the Group?

In a ruling of 15 October 2014, the Court of Cassation ruled that amicable termination of a contract between an employee and the home company within the context of an intra-group transfer is invalid (Cass. Soc, 15 Oct. 2014, No.11-22.251). The Court of Cassation specified that, except where otherwise provided for by law, an employment contract can only be terminated under the conditions provided for by Article L. 1237-11 et seq. of the French Labour Code relating to legally approved contractual termination.

The Court of Cassation revised its decision of 2014, admitting that the provisions relating to legally approved contractual termination between the employee and the employer are not applicable to a tripartite agreement between an employee and two successive employers, designed to define the arrangements for the continuation of an employment contract rather than the termination of a contract. (Cass. soc, 8 June 2016, No. 15-17.555). This ruling, notably in view of Article 1134 of the French Civil Code, confirms the possibility of an amicable termination without a contractual termination of an employment contract, governed by Article L. 1237-11 et seq. of the French Labour Code. In the present case, it related to an intra-group transfer and the transfer agreement provided for a higher classification, that the employee would retain his/her seniority and that there would be no trial period.

This judgment recognises again, therefore, the legal validity and efficiency of tripartite agreements for organising postings within a Group. However, in the specific context of international mobility, this solution does not exclude the interest, or necessity, of drawing up an additional contractual document with the new (foreign) employer specifying the contractual terms and conditions (notably the applicable law for the employment contract).