Under French law, the conciliation agreement – before the Employment Tribunal – constitutes a waiver by the parties of all claims relating to the termination of the employment contract (French Labour Code, art. L.1235-1).
The parties often include in such agreements a waiver of all claims relating to both (i.) the termination of the employment contract, but also (ii.) the performance of the employment contract and/or other issues. Until very recently, case law had however not confirmed this wide-coverage practice was valid.
By a decision dated April 24, 2024, the Supreme Court just did. It indeed ruled that the parties may freely extend the scope of the conciliation agreement to issues beyond those related to the sole termination.
In this case, an employee, who was also a corporate officer, had been dismissed. The employer agreed to pay the employee, through a conciliation agreement, a global settlement indemnity, and the agreement was deemed to constitute a waiver of all claims and indemnities and entailed the withdrawal of all proceedings and actions in respect of any dispute arising or to arise from both the employment contract and the employee’s corporate office.
However, the employee argued that this very wide clause did not cover the financial compensation of her non-compete clause. She thus subsequently brought a new claim.
The Supreme Court held that the parties’ mutual obligations under a non-competition clause were included in the very matter of the conciliation agreement, even though it was not expressly set out in the agreement.
The Court thus secures a practice consisting in extinguishing any dispute relating to the conditions of conclusion, performance and termination of the employment contract in the conciliation agreement in consideration of the payment of a lump-sum compensation.
To this end, the conciliation agreement must expressly state that the parties waive all claims and indemnities relating to the conclusion, performance and termination of the employment contract.
However, we still recommend mentioning expressly and precisely what the conciliation agreement covers, in order to secure the agreement.
French Supreme Court, Social Chamber, April 24th 2024, n°22-20.472
This article was first published by our French member firm MGG Legal on 02 May 2024. Interested in knowing more about this issue, or any other employment-related topic? Please reach out to our representative Marijke Granier-Guillemarre, Partner & Founder of MGG Legal.
