Your specialists in international projects
André GAST, aged 58, has been the joint manager of the Disputes and Arbitration department of LAMY LEXEL in Lyon since 1994. The department is composed of 10 lawyers, including 3 partners.
He started his career with a firm in Lyon, before created his own structure that he developed over a five-year period. In 1994, he became a partner of cabinet Lexel which was just being formed, thus contributing towards the extension of the Lamy Lexel structure.
At the same time he has always invested a great deal in the bodies of his profession: he was a member of the Conseil de l’Ordre and is at present the General Secretary for the Centre de Médiation et d’Arbitrage.
André GAST has acquired expertise in the various aspects of the litigation field.
He has gained special expertise in distribution and competition, real estate law, industrial risks and is a specialist in alternative solutions to litigation and arbitration.
He assists companies in disputes that may arise and in the management of their lawsuits. He also advises them on the means of avoiding clashes before the judge by anticipating alternative solutions. He does the training and intervenes within the structures on the theme of alternative ways of settling disputes.
In order to succeed in these missions, he horizontally calls on the in-house expertise of his partners, in particular with regard to business law, social law, tax law, contract law… and is involved in international networks to ensure the best performance to each of his interlocutors.
To contact him: agast@lamy-lexel.com – 33 (0)4 72 74 53 00.
Business Law
Cross-border mergers within the European Union
The achievement of mergers between trading companies of different member States was already made possible by the European regulations.
Nevertheless, the operation was legally complex due to the lack of transposition into French law of theEuropean directives.
This is now done with the law of 3 July 2008 including various provisions adapting French company law to European law.
Thus the terms and conditions for employee information and consultation on the merger project were specified, the specific rights of the partners of the companies parties to a cross-border merger, the terms and conditions of the control of the legality of the merger and its effective date as well as the obligation for the new company to adopt a status allowing the employees to take part.
These various provisions apply to all the cross-border mergers for which the treaty is signed after 4 July 2008.
It is rather surprising to note that the control of the legality of cross-border mergers can be carried out, not as for national mergers, just by the court office of the commercial court, but also by a notary....
To know more about this new law, click here…
Fate of the security in the event of merger-takeover of the creditor company
Uncertainty remains as to the maintenance of the guarantees granted to the absorbed company after the merger.
During the acquisition operations one question often remains: what will become of the guarantees of the absorbed company?
Usually, it was agreed that unless there was an express demonstration of will for guarantees, their commitment would end as of the merger... and the debts occurring after the merger were no longer guaranteed by them (Supreme Court, 1st civil division 28.09.04). Doctrine is opposed to this case law, contrary both to the principle of total transfer of assets and liabilities and to the indifference of the guarantees with regard to the person of the creditor they guarantee.
A decision of 8 November 2005 had foreshadowed the possibility of a turnaround: the guarantee was maintained after the merger, on the basis of the total transfer of assets and liabilities.
By this decision dated 14 May 2008, the Commercial Division of the Supreme Court seems to be coming back to its previous case law insofar as it pronounces its decision depending on the date of birth of this guarantee. But the Court does not directly take a position on the fate of the guarantee in the event of merger. The Court just takes note that the « debt was not born after the merger », and cancel the judgment rejecting the creditors claim.
In the event of a debt prior to the merger, it is covered by the guarantee.
Employment Law
The modernisation of the labour market
The law on the modernisation of the labour market, published on 26 June 2008, and the application texts liberalize the French market by creating a new means of breaking off a fixed-term contract, by increasing the trial period and introducing a new type of fixed-term contract.
On the other hand, the severance pay for personal reasons is doubled and the required seniority condition is reduced to one year.
The contractual termination
The law creates a new means of breaking off the unlimited work contract in addition to the classical terminations that are dismissal, resignation and retirement.
- Notion of contractual termination
In the future, employer and employee may mutually agree on the conditions of the termination of the unlimited work contract.
However, the law prohibits the use of this system for the termination of work contracts as a result of Job Saving Plans (“PSE”) and collective agreements for the forward planning of manpower and skills.
The law also stipulates that this termination concerns the protected staff representatives subject to the prior authorisation of the Occupational Safety and Health Administration under the conditions of common law.
- Contractual termination procedure
This procedure can be divided into 4 successive steps:
- Employer and employee agree on the principle of a termination after one or several meetings. The employee has the possibility of being assisted by a person of his/her choice belonging to the company or, when the comapny does not have any enployee representative, by a person from the outside included in a list established for this purpose by the local authorities. The employer also has the possibility of being assisted if the employee him/herself is assisted.
- Execution of the convention
The agreement between the parties is materialised by a termination agreement in accordance with a form available from the Labour authorities.
- Cooling-off period
As of the date of execution of the contractual termination, each of the signatory parties to the termination agreement has a period of 15 calendar days to exercise his/her cooling off right. At the end of this cooling-off period (15 days), a request for approval is sent to the Departmental Labour Directorate by the most diligent party.
- The approval
The approval conditions the validity of the termination agreement. The director should ensure that all the conditions of form and grounds have been complied with as well as the parties’ freedom of consent.
The authority has a period of 15 working days to give its decision.
Fault of notification within this period (tacit agreement), the approval is deemed to have been given.
- Severance pay, unemployment benefits and disputed claims:
An employee may claim a severance pay, the amount of which shall not be less than that laid down in with regard to dismissal i.e. 1/5th of the monthly salary per year of seniority, increased by 2/15ths of the monthly salary per year of seniority, for the years exceeding 10 years.
This severance pay is exempt from tax and social security contributions identical to that provided for redundancy payment and for transactional payment (in the event that the payment made is higher than the redundancy payment).
The advantage for the employee of this new method of termination instituted by the law on social modernisation is that he/she will be entitled to unemployment benefits under the conditions of common law if the termination agreement has been approved by the Labour authorities.
Finally, any disputes relating to the agreement, the approval or the refusal to approve fall within the exclusive jurisdiction of the Conseil de Prud’hommes (social tribunal) which will rule in first and last resort (no appeal possible, except for an appeal before the Supreme Court), excluding any other petition to the administrative judge.
The trial period
- Initial length of the trial period
- for workers and employees: two months at the most,
- for lower management and engineers: three months at the most,
- for the executive staff: four months at the most.
- Renewal
The trial period is renewed once, on the conditions provided for in an extended branch agreement, its total duration not exceeding, depending on the professional categories, four, six or eight months.
In any event, for the renewal of the trial period to be possible, apart from the existence of an extended branch agreement, the express and non equivocal agreement of the employee is required.
- Coming into force
The duration of the trial periods fixed by the law have a compulsory character, except for:
- longer periods fixed by the branch agreements concluded before the date of publication of the law,
- shorter periods fixed by the branch agreements concluded before the date of publication of the law, but only until 30 June 2009,
- shorter periods fixed by collective agreements concluded after the date of publication of the law,
- shorter periods fixed in the letter of engagement or the work contract.
- Breaking off of the trial period
The breaking off of the trial period still does not have to be motivated.
On the other hand, the law establishes a compulsory reciprocal notice period for the breaking off of the trial period.
Thus, an employer who puts an end to a trial period should observe a period of notice of:
- 24 hours for less than 8 days’ presence,
- 48 hours between 8 days and one months’ presence,
- 2 weeks after 1 months’ presence,
- 1 month after three months’ presence.
In any event, this period of notice shall not have for effect to extend the trial period beyond the maximum periods provided for above
This period of notice also concerns interruptions of trial periods of less than one week for fixed-term work contracts.
When it is the employee who terminates the trial period, he should observe a period of notice of:
- 24 hours, if the length of presence of the employee is less than 8 days,
- 48 hours, beyond that.
- Recruitment of young people
So as to facilitate the access of young people to professional life and in particular to an unlimited contract, the length of a sandwich course taken during the final year of study would be taken into account in the length of the trial period, without this being able to reduce it by more than half, unless there is a branch or company agreement offering more favourable provisions, in the event of being recruited by the firm at the end of the training course.
The fixed term agreement for a project
The new legal provisions create, as an experiment for a period of 5 years from the coming into force of the law, a fixed-term contract for the completion of a specified object.
- Conclusion
This fixed-term contract is reserved for engineers and executives for the achievement of certain projects, the duration of which is unsure.
This contract, the duration of which is unknown, will be entered into for a minimum period of 18 months and a maximum period of 36 months.
This contract shall not be renewed. It should be entered into for the realisation of a specific object. In no event may it be used to meet a temporary increase in business.
Recourse to this contract will be subject to the conclusion of an extended branch agreement or, fault of which, a company agreement containing various mentions and in particular the economic requirements to which it is liable to bring an adapted reply.
As soon as it is concluded, the contract should specify:
- the project for which it is concluded and the completion of which constitutes the term of the agreement,
- the approximate duration considered for the project,
- the possibility of terminating the agreement at the anniversary date of its conclusion by either of the parties for any real and serious reason, this termination opening the right to severance pay amounting to 10 % of his/her total gross remuneration,
- the conditions and the period within which the employee should be informed of the arrival of the end of his/her contract or the proposal to continue the contractual relation in the form of an unlimited contract. This period of notice should not be less than two months.
- Termination
- The contract is terminated when the project for which it was entered into is achieved, knowing that this achievement should occur between the 18th and 36th months of the contract.
The employee is then given severance pay of an amount equal to 10 % of the total gross remuneration received, if the employer does not offer to continue his/her activity under an unlimited contract, beyond the achievement of the project.
- After the minimum duration of 18 months, it is possible to terminate the agreement before expiry of the contract, at the anniversary date of its conclusion, on condition that a real and serious reason is given.
The employee may also claim a specific payment amounting to 10 % of the total gross remuneration received.
Severance payment
In the future, severance pay is due as soon as the employee has one year of seniority.
Furthermore, the law fixes the amount of the indemnity, regardless of the grounds, at 1/5th of the monthly salary per year of seniority, increased by 2/15ths of the monthly salary per year of seniority, for the years exceeding 10 years.
Of course, the provisions of the collective bargaining agreements remain applicable if they are more favourable.
