Business Law Articles
Written By: Marie-Sylvie Vatier, Esq. & Montaine Guesdon Vennerie, Esq.
Vatier & Associes
We would like to draw your attention to a June 29, 2011 ruling of the Employment section of the Cour de Cassation which addressed, for the first time, whether an employer may set the criteria for payment of a variable bonus by reference to documents in English.
In full formation, the Employment section ruled that documents in English are not enforceable against an employee, even if the employee is a high ranking member of management with perfect understanding of the English language. The Court based its ruling on article L.1321-6 of the Employment Code, which states that all documents stipulating obligations of an employee or which an employee is required to understand for the performance of his/her duties must be in the French language.
The case in question involved the employment agreement of an executive sales director which provided for the payment of a fixed base salary plus a variable bonus in an amount up to 40% of the base salary. The amount of the bonus depended upon fulfillment of individual objectives set each year. Specifically, the objectives were part of the annual plans which defined executive bonus policy at the group level and therefore in English.
Following termination of his employment, the employee argued that these documents had not been given to him in French, and therefore the employer was not entitled to use them to calculate the precise amount of his bonus and therefore he was entitled to receive each year the maximum amount provided under his employment contract, 40% of his base salary, whether or not the objectives in the bonus plan had been fulfilled.
The financial consequences of not translating bonus plans and criteria into French are therefore substantial, as employees will be entitled to claim the maximum amount of the variable bonus indicated in their employment contract.
In the case which gave rise to the June 29, 2011 ruling, the executive in question understood English perfectly. Naturally, this decision is applicable to other documents and to languages other than English, which have not been translated into French.
The solution might be different were the employee completely bilingual, although, the employment agreement being a French contract, we doubt it.