Facts: In 2011, an employee was hired by SARL FNI as a Mc Donald’s restaurant manager. Following the sale of the restaurant where he worked, he signed a termination agreement with the company. The agreement stipulates that the employee will resume his duties with SNC Les Freydières, which forms a UES with SARL FNI, with effect from the same day, and under the same or “more advantageous” conditions as at the time of the termination.
The employee, who had suffered an industrial accident and whose contract had been suspended at the time the termination agreement was signed, was subsequently dismissed by SNC Les Freydières on the grounds of unfitness for work and inability to redeploy.
He brought an action before the Valence industrial tribunal, claiming that SARL FNI had failed to comply with its safety obligation. He also claimed that the termination agreement reached during his sick leave was null and void, as his consent had been vitiated, and contested the validity of his dismissal.
On appeal, the employee alleged that no tripartite agreement had been signed between him and the two companies, and that there were in fact two separate documents: a mutually agreed termination with the first company, and an open-ended contract with the second.
The Grenoble Court of Appeal dismissed his claims and concluded that a tripartite agreement existed. The judges stated that “it is possible for the parties to terminate an open-ended contract by mutual agreement when this termination is followed by another employment contract and is not intended to definitively end the employment relationship”. Consequently, they concluded that the two companies and the employee had indeed entered into a tripartite agreement “not intended to definitively terminate his employment contract, but to guarantee the continuation of the employment relationship”, particularly as the restaurant in which the employee initially worked was to be sold.
The Court of Appeal adopted the companies’ reasoning that it did not matter that two separate documents had been signed, as the parties’ common intention to continue the employment relationship was sufficient to recognize the presence of such an agreement.
Solution by the Cour de cassation: the Chambre sociale quashes this decision on the basis of articles 1134 of the French Civil Code (in its wording prior to order no. 2016-131 of February 10, 2016, as applicable to the dispute) and L. 1231-1 of the French Labor Code, on the grounds that no tripartite agreement had been signed by the successive employers and the employee.
” 15. In so ruling, when it was clear from its findings that no tripartite agreement had been signed between the employee and his successive employers organizing the continuation of the same employment contract, the appeal court violated the aforementioned texts.”
Scope of the decision
The Cour de cassation’s response is quite understandable in the present case, since the continuation of the contract was materialized by two distinct acts: the termination by mutual agreement entered into with the first company, and an open-ended contract entered into with the second company. The Grenoble Court of Appeal seems to have taken some liberties in considering that these two acts could be analyzed as a tripartite agreement organizing the continuation of the employment contract.
The May 7 ruling reaffirms the principle that a tripartite agreement to avoid breach of the original contract (i) must be in writing and signed by the employee and the successive employers, and (ii) must be aimed at organizing the continuation of the same employment contract. In so doing, the French Supreme Court maintains its previous case law (see Soc.,October 26, 2022 (n°21-10.495).
For the record, there is no legal definition of the tripartite agreement organizing intra-group transfers.
In the past, transfers within groups were often organized by clauses in the employment contract, until the French Labour Court invalidated the practice of employees agreeing in advance to a change of employer (Soc., Sept. 23, 2009, no. 07-44.200).
The practice subsequently developed into “tripartite agreements”, most often involving the termination of the contract with the first employer and the conclusion of a new contract with the second. In our view, this type of tripartite agreement should be avoided, given the reference in recent Cour de cassation rulings to the requirement to continue the “same” contract.
For the time being, the Cour de cassation has not been called upon to consider the legal nature of tripartite agreements organizing the continuation of the same contract.
This remains uncertain and is the subject of numerous doctrinal debates.
Is it, because of the formal signature requirement imposed by the Court, an assignment of contract within the meaning of article 1216 of the French Civil Code? Or is it a novation within the meaning articles 1329 to 1335 of the Civil Code?
In these circumstances, great care must be taken when drafting such an agreement.