Facts
On July 13, 2021, the General Manager of the Fédération Française de Football (FFF) signed a collective agreement concerning the PSE. However, the FFF’s articles of association did not authorize her to sign this agreement: in fact, according to the articles of association, contracts involving an amount in excess of €300,000 fell within the sole remit of the Federation’s Executive Committee (the cost of the PSE represented €2.8 million).
The agreement is validated by the administration on July 16, 2021.
On January 27, 2022 (i.e. 6 months after the signing of the agreement and the validation decision), the FFF Executive Committee expressly ratified the agreement signed by the General Manager.
In December 2021, 9 employees appealed to the Paris Administrative Court, which annulled the validation decision on the grounds that the General Manager was not empowered to sign the agreement. The regularization had not yet been carried out.
On appeal, the Paris CAA overturned the TA’s decision on May 6, 2022 (the ratification having been carried out).
The reasons given by the Court of Appeal and the CE
In annulling the decision of the TA, the CAA relied on the provisions of the Civil Code, and in particular article 1156, in the absence of any special provisions in the Labor Code preventing it from doing so. The reasoning is identical in the CE decision:
“4. under the terms of article 1156 of the Civil Code, in its wording resulting from the ordinance of February 10, 2016 reforming the law of contracts, the general regime and proof of obligations: “An act performed by a representative without authority or beyond his powers is unenforceable against the principal, unless the contracting third party has legitimately believed in the reality of the representative’s powers, in particular because of the principal’s behavior or statements. / When he was unaware that the act was performed by a representative without authority or beyond his authority, the third party contracting may invoke its nullity. / Neither the unenforceability nor the nullity of the act may be invoked once the principal has ratified it”. …. In the absence of any special provisions in the French Labor Code, these provisions of the French Civil Code apply to the signature by the employer of collective agreements relating to job-saving plans.
5. It follows from what has been said …that the signature, on behalf of the employer, of a majority collective agreement concerning a PSE, by a principal, beyond the authority given to him, may be regularized with retroactive effect by express or tacit ratification of the agreement by the authorized body, even when this ratification takes place after the administrative authority’s decision validating the same agreement, insofar as the statutory rules of the employer legal entity do not prevent this.
7….. It follows from what has been said in point 5 that by relying on the fact that the FFF Executive Committee ratified this agreement during the course of the proceedings, in order to rule, on the basis of the provisions cited in point 4, that the General Manager of the Federation, even though she had exceeded the authority vested in her by the statutory provisions cited in the previous point, should be considered retroactively as having had the authority to sign the agreement, since the statutory provisions governing the distribution of powers within the FFF did not prevent this, the court did not err in law. “
For such retroactive ratification to be possible, the articles of association must allow it.
It also seems to me, although this is not mentioned in the decision of the CE (unlike the decision of the CAA), that this regularization can only take place if the plea of nullity of the agreement has not already been raised.
On reading the decisions of the TA and CAA, it seems that the plaintiffs had not raised the nullity of the agreement and had only invoked the argument based on the General Manager’s lack of authority.
Consequently, I believe that the decision of the CE would not have been the same if the nullity of the agreement had been invoked by the plaintiffs. In practice, therefore, it seems preferable to regularize the situation as soon as possible.
The ruling is also interesting on another point, that of the regularity of the consultation procedure in the event of a difference between the economic reason presented to the ERs and the one invoked at the implementation stage, notably in the letters of dismissal.
This was the case here.
On this point, the CE (like the TA and CAA) considers that this circumstance is not such as to establish that the procedure was vitiated by irregularity.
Duly noted. I am not sure, however, that the Cour de cassation would adopt the same position in the context of consultations not involving a PSE.