In a judgment of 27 November 2024 (no. 23-10.389) published in the bulletin, the Court of Cassation confirmed that the relationship between a company and a manager exercising control functions cannot be qualified as an employment contract, within the meaning of Regulation Brussels I bis (EU) No. 1215/2012.
Indeed, the court considered that a manager with the capacity to decide the terms of his contract and independently control the company's affairs and the exercise of his own functions does not allow a relationship of subordination to be characterized, an essential condition for establishing the existence of an "individual employment contract".
1. Solution.
The Court of Cassation dismissed the appeal, confirming that the relationship could not be qualified as an employment contract.
Based on the Brussels I bis Regulation and European case law, it recalls that a contract between a company and a manager does not constitute an employment contract when the latter is able to discuss the terms of his contract, has autonomous power of control over the daily management of the company and the exercise of his own functions, and finally exercises a significant capacity to influence the board of directors.
The Court of Appeal had noted that the "Board Agreement" listed elements such as remuneration, benefits, leave, intellectual property and confidentiality. In this regard, discussed by the applicant, they were not sufficient to establish the existence of an employment contract, especially since the mission described was intended to serve the interests of the company.
Indeed, according to it, the obligations mentioned in the contract corresponded to the typical functions of a member of the board of directors: respecting the directives provided for by law and the statutes, sitting on committees, and actively contributing to the development of the company.
Finally, no evidence was provided to demonstrate that the applicant had acted under the subordination of the company or received directives. Therefore, the Court of Cassation validated the analysis of the Court of Appeal, dismissing the existence of a relationship of subordination and, consequently, the classification of an employment contract.
2. Analysis.
This judgment of 27 November 2024 is in line with the previous case law of the Court of Justice of the European Union, concerning the concept of an individual employment contract in the context of European regulations on jurisdiction (in particular the Brussels I and Lugano II regulations).
Although in this case the same Community texts are not applicable, the Court of Cassation considers that the case law, in particular the judgments Holterman Ferho Exploitatie (CJEU, 10 September 2015) and Bosworth and Hurley (CJEU, 11 April 2019), can be transposed to the application of the applicable Brussels I bis Regulation (No. 1215/2012). Indeed, it justifies this solution by the fact that these regulations use similar legal concepts, such as that of "individual employment contract".
Thus, the Court of Justice of the European Union (CJEU) clarifies that, for a contractual relationship between a company and a manager to be qualified as an employment contract, it is necessary to demonstrate the existence of a relationship of subordination.
However, if the manager has firstly an autonomous power of control over the daily management of the company and the exercise of his functions, secondly a capacity to significantly influence the decisions of the board of directors, thirdly an opportunity to negotiate or decide on the terms of his own contract, and finally he does not receive any specific instructions for the performance of his duties, this relationship of subordination is considered to be absent.
Therefore, the simple fact that the shareholders have the power to dismiss the manager is not sufficient to establish a relationship of subordination and consequently, such a contract cannot be considered an individual employment contract.
This analysis is fundamental to distinguishing employment relationships from social mandates in the context of international disputes, taking into account the capacity for influence and the real power exercised by the manager.
Finally, the judgment illustrates the articulation between national law and European law, highlighting that, in order to ensure harmonisation and consistency in the application of European Union law, concepts such as that of "individual employment contract" must be interpreted autonomously and uniformly in all Member States.
This means that, even if each country has its own legal rules and traditions, these national specificities cannot be used to give a different meaning to concepts defined in European texts such as the Brussels I bis Regulation.
The aim is to prevent divergences between Member States that could compromise legal certainty or create inequalities.
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Frédéric CHHUM avocat et ancien membre du conseil de l’ordre des avocats de Paris (mandat 2019-2021)
CHHUM AVOCATS (Paris, Nantes, Lille)
e-mail: chhum@chhum-avocats.com
https://www.instagram.com/fredericchhum/?hl=fr
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