Benefits granted to employees in the scope of your company compensation policy must not be only category-based!
Case law rulings by the French Cour de Cassation regarding compensation schemes and, more generally, benefits granted, whatever their nature, are becoming increasingly strict.
To be enforceable against employees, the terms and conditions fixed with respect to the granting of various additional compensations and benefits must be compliant with the principles laid down by the Cour de Cassation regarding equal treatment and non-discrimination.
It is therefore important that the criteria for granting a benefit, whether financial or non financial, be based on “objective and relevant factors.”
The fact of belonging to one or another staff category (e.g., executive staff) is not in itself sufficient to bar employees belonging to another category (e.g., non-executive staff) from being entitled to a benefit.
Indeed, the Cour de Cassation stipulated in a recent decision dated June 8, 2011:
“Whereas a mere difference of occupational category is insufficient in itself, when granting a benefit, to justify any difference in treatment, pursuant to a collective agreement, between employees whose status is identical with respect to the benefit concerned, such difference of treatment is required to be based on objective factors whose validity and relevancy must be checked by the court; whereas if a collective agreement stipulates a difference of treatment based on a difference of occupational category, such stipulation may be considered to be based on objective and relevant factors when the purpose or aim of the difference of treatment is to account for the specific status of employees belonging to a given category, in view in particular of the terms of exercise of their duties, their career path, or their terms of remuneration.”
This case law ruling, applicable in the event a benefit is granted pursuant to a collective agreement signed with the trade unions or to a decision unilaterally taken by the company, thus obliges companies to check the validity of the criteria they apply in granting each benefit provided for under their compensation and benefits policy, on the basis of the indications given by the Cour de Cassation. In the event of non compliance, they must take corrective measures.
It is in the best interest of companies to anticipate such issues to avoid being obliged to deal with them in the scope of legal action brought by an employee or group of employees (potentially with the support of the trade unions) for the purpose of claiming entitlement to a benefit whereas the conditions for entitlement are not met, such conditions being dismissed by the court as unlawful.
- French equivalent of Supreme Court
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