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According to the Versailles Court of Appeal, franchise networks can be considered as groups offering redeployment solutions

19/07/2017

Case law has consistently stated that the obligation to redeploy an unfit employee applies across all company's establishments and even those of its parent group companies, provided that the structure of these latter, their activity or operating sites allow the permutability of all or some employees.

In the context of this type of redeployment, does the definition of group extend to franchise networks? The Court of Cassation had already found that to be the case in a ruling handed down on 20 February 2008. This position has now been confirmed by the Versailles Court of Appeal (CA Versailles, 1 March 2017, no. 15/02579).

Based on the criterion of permutability of employees, the judges in that case found that the judicial independence of companies in the network should not prevent them being identified as offering redeployment solutions. In drawing this conclusion, they highlighted the fact that, in the case in question, belonging to the franchise network implied "certain common obligations or procedures, such as training courses, minimum quality standards and a network recruitment site." The Court of Appeal also found that the employee dismissed for unfitness had already worked for the same franchise in another town.

This body of evidence led the Court of Appeal to rule that the employee's permutability was established and that the franchise companies in that case represented the scope of the redeployment obligation binding on the employer pursuant to article L.1226-2 of the French Labour Code.

The possible permutability of employees, according to the criteria identified by the Court of Appeal, therefore leads to the conclusion that the network of franchisees should be considered equivalent to a group within the meaning of the above-mentioned obligations. Conversely, this would not necessarily be the case for franchises simply organising the supply of a brand, excluding any common obligations or procedures.

This conclusion, adopted by the Court of Appeal, is comparable to the provisions of article 64 of law no. 2016-1088 of 8 August 2016 acknowledging a new representation for employees of franchise networks, whose application decree has recently been published (decree no. 2017-773 of 4 May 2017).

Authors

Picture of Vincent Delage
Vincent Delage
Partner
Paris