In questions: from part-time to fixed-day package

THE LEGISLATOR, like the judge, concerned with preserving the employee's right to rest and ensuring the protection of their health, has always been keen to ensure that, in the performance of their employment contract, they are subject to sufficiently structured and limited working time.

The Aubry I (Law No. 98-461, June 13, 1998) and Aubry II (Law No. 2000-37, January 19, 2000) laws, while reducing the weekly working time from 39 hours to 35 hours, introduced a serious breach in the highly protective working time law, by allowing companies to exclude a category of their employees deemed "autonomous" from the hourly count of working time. This is how the flat-rate day agreement was born 20 years ago, initially giving the illusion to many employers, who quickly seized upon it, that they could henceforth do without monitoring the working time of part of their managerial staff, in exchange for the payment of a higher salary.

But that was without counting on the judges of the high court who, year after year, would strengthen and even create additional safeguards, forcing companies to increasingly control the workload, organization, and even the working time of their employees on a flat-rate basis.

1. Do annual fixed-day agreements not allow exemption from monitoring working time?

The rewriting of the provisions of the Labor Code relating to flat-rate agreements by Law No. 2016-1088 of August 8, 2016 brought the legal framework for flat-rate day agreements into compliance with the requirements of supranational texts and the case law of the Court of Cassation. The new Article L. 3121-64 of the Labor Code, in its wording resulting from the law of August 8, 2016, clearly endorsed the case law of the Court of Cassation regarding the content requirements of the collective agreement, providing for the possibility of concluding a flat-rate day agreement, which must include:

– "the methods by which the employer ensures the regular evaluation and monitoring of the employee's workload";

– “the terms under which the employer and the employee periodically communicate about the employee's workload, the balance between their professional activity and personal life, their remuneration, and the organization of work within the company.”

Professor Morand, regarding a ruling by the Court of Cassation on January 17, 2018, which declared a flat-rate day agreement null and void because it did not allow the employer to remedy in a timely manner a workload possibly incompatible with a reasonable working time, even questioned whether the flat-rate day still had a future, given the control obligations on the employer, which had become excessively burdensome and were now dissuasive? (M. Morand, Le forfait en jours a-t-il un avenir ? : JCP S 2018, 1077).

The magistrates of the Quai de l'Horloge apparently did not hear this worried appeal, with several recent rulings further restricting the possibilities of access to the fixed-day scheme, now prohibited for part-time employees, consolidating the rights of employees wishing to take action on the conditions of execution of their fixed-day scheme by opening limitation periods, and finally strengthening the employer's obligations regarding the strict control of the working time of employees who must enjoy total autonomy in the exercise of their functions.

2. Can a part-time employee not be placed on a fixed-day basis?

Indeed, no. The Court of Cassation ruled on the matter in a judgment of March 27, 2019 (Cass. soc., March 27, 2019, n° 16-23.800: JurisData n° 2019-004549; JCP S 2019, 1131, note J.-E. Maes-Audebert) in which an employee, who had entered into a flat-rate agreement based on 131 days, sought the reclassification of his employment contract as a full-time contract. By ruling for the first time that employees who have entered into an annual flat-rate agreement of less than 218 days cannot be considered as working part-time, it has, in the end, further restricted the conditions of access. The employee, who criticized his employer for not having complied with the legislation on part-time work, in particular by not having provided for the distribution of working time between days of the week or weeks of the month, pursuant to Article L. 3123-6 of the Labor Code, is thus deprived of the benefit of a possible reclassification of his employment contract as a full-time contract. The reasoning of the Court of Cassation is based on the principle that the organization of an employee on a flat-rate day basis is necessarily opposed to that of a part-time employee whose working hours must be mandatorily defined.

There is nevertheless a form of contradiction on the part of the judges of the social chamber who consistently consider that companies can escape the automatic reclassification of part-time work that is not sufficiently defined into full-time only when employees have full autonomy in organizing their working time. (Cass. soc., Oct 10, 2018, No. 17-17.589. – Cass. soc., Mar 30, 2011, No. 09-70.853)

Furthermore, the Court of Cassation consistently rules that the parties may agree on a number of working days lower than that provided for by the collective agreement setting the number of working days included in the flat-rate days, which in reality constitutes only a ceiling (Cass. soc., July 9, 2003, No. 01-42.451: JurisData No. 2003-019859). In other words, even if the employee has a number of working days much lower than 218 days, he will be considered as working full-time. This solution is not necessarily favorable to the employee who, while reproaching his employer for not having respected the legislation on part-time work, saw his request for reclassification to full-time rejected.

In any case, the Court of Cassation clearly affirms the total incompatibility between the flat-rate day and part-time schemes, thus reminding that the employee on a flat-rate day basis commits
to working a certain number of days per year without the number of hours they will work being determinable in advance.

If there is a form of inconsistency, recalled above, with the Court's case law on the reclassification of irregular part-time work, this decision is nevertheless in line with the case law of the Second Civil Chamber of the Court of Cassation (Cass. 2e civ., 28 May 2015, No. 14-15.695. – Cass. 2e civ., 3 Nov. 2016, No. 15-26.276) and validates the administration's position on the subject (Circ. DRT No. 2000-07, 6 Dec. 2000).

3. Have changes been made regarding limitation periods for actions relating to working time?

In two recent rulings, the Court of Cassation endorsed the possibility for part-time or flat-rate day employees to bring an action within extended deadlines when challenging the organization of their working time.

In a first ruling of December 19, 2018 (Cass. soc., 19 déc. 2018, n° 16-20.522 : JurisData n° 2018-023877), the Social Chamber held that an action for reclassification of a part-time employment contract into a full-time contract is an action for payment of wages and is subject to a 3-year statute of limitations in accordance with Article L. 3245-1 of the Labor Code. This position is particularly surprising, as Article L. 1471-1 of the Labor Code now provides for a 2-year statute of limitations for actions relating to the performance of the employment contract, a duration that was recently applied in the context of an action for reclassification of a fixed-term employment contract into an open-ended contract (Cass. soc., 3 mai 2018, n° 16-23.602).

While this decision is legally surprising, it is not entirely so in principle, as the Court of Cassation confirms its very protective view of the employee's working time rights, granting them the right to be able to challenge the judge within the broadest possible time limits.

Using similar reasoning, the high court recently affirmed (Cass. soc., March 27, 2019, No. 17-23.314: JurisData No. 2019-004547) that the limitation period for an action to nullify a flat-rate days agreement did not begin on the date of signature of the agreement. The Social Chamber indeed considered that an employee claiming overtime pay could challenge the validity of the flat-rate days agreement as long as his wage claim was not time-barred. The fact that the employee relied on a defect affecting the flat-rate agreement from its inception had no impact on the starting point of the limitation period for his action.

Once again, the social chamber wants to allow the trial judge to exercise constant control over the flat-rate day agreement and its execution conditions, so that he can sanction, even subsequently, an agreement whose drafting was flawed ab initio. This decision is part of a continuous jurisprudential position of the Court of Cassation which, after preserving flat-rate days in its landmark ruling of June 29, 2011 (Cass. soc., June 29, 2011, No. 09-71.107: JurisData No. 2011-012756; JCP S 2011, 1333, study M. Morand; JCP G 2011, 970, note N. Billon and Z. Baki) from the wrath of the European Committee of Social Rights, which considered them non-compliant with the European Social Charter, continues to increase constraints regarding maximum working hours, activity monitoring, and finally the protection of the safety and health of employees on flat-rate days.

4. How is the working time of executive employees monitored?

The latest rulings of the Court of Cassation on the monitoring of the activity of executive employees show how much the judge considers that the legal framework of the flat-rate days, because it deviates from the protective law of legal working hours, must remain an exception, with the legal and contractual guarantees intended to ensure the protection of the health and safety of employees being strictly respected elsewhere.

In a ruling of December 19, 2018 (Cass. soc., Dec. 19, 2018, no. 17-18.725: JurisData no. 2018-023669; JCP S 2019, 1048 note M. Morand), the Court of Cassation thus recalled that the burden of proving control over the workload of employees subject to a flat-rate day agreement fell on the employer, which consists of placing on the company alone the obligation to collect information on the work of its employee who is nevertheless supposed to have total autonomy. The social chamber affirmed on this occasion that the employer could not simply have the employee fill out the documents provided for by the collective agreement without carrying out a real check of their actual workload.

More than just a control of workload, the Court of Cassation actually invites employers to exercise strict control over their employees' working time. In the absence of such control, executive employees can, like all other employees subject to the legal regime of hourly working time, claim payment for overtime hours.

The employee exceeding the number of days provided for in the flat-rate agreement does not necessarily lead to its cancellation. Concerned that employees should not be excluded from the benefit of compensation for time worked beyond the contractual framework, the Court of Cassation recently recalled that the employer
simply must, in this case, pay for the excess days

(Cass. soc., 24 Oct. 2018, No. 17-12.535: JurisData No. 2018-018785).

The Court of Cassation also recalled, in a ruling of March 27, 2019, that an employee on a fixed-day package must imperatively have real autonomy in the exercise of their duties, failing which the fixed-day package regime could not be applied to them (Cass. soc., March 27, 2019, no. 17-31.715: JurisData no. 2019-004544). The Social Chamber thus affirmed that an employee whose "working hours were predetermined, their duties applying to events whose modalities were known in advance and that precise schedules including in particular the days and time slots in which each operation was to be carried out had to be respected" fell under a work situation organized and imposed by the employer, which did not allow them to meet the conditions to be subject to a fixed-day package agreement. In doing so, the Court of Cassation confirmed that the fixed-day package is an exceptional method of organizing working time, applying only to a fairly limited category of employees.

The provisions of the Collective Agreement for Technical Design Offices, which stipulate that employees on a fixed-day basis must have a minimum annual gross remuneration of €50,012.66, corresponding to the minimum contractual remuneration for position 3 executives, further illustrate that not all executive positions can benefit from a fixed-day working time arrangement.

Will there still be employees on a flat-rate day scheme in a few years? The Court of Cassation will tell us. Many small businesses, lacking the internal means to activate all the control levers for their flat-rate day employees, increasingly prefer hourly work organization, with the implementation of automated time tracking for their employees, via badge systems at the company entrance and exit, or automatic disconnection of workstations.

 

Business law