Supreme court annuls decree on overtime for managerial staff

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In March 2001, France's Supreme Administrative Court annulled a January 2000 decree on the establishment of overtime quotas, in a case brought by the CFDT and the CGT trade unions. The unions had brought proceedings against the government for excluding certain types of managerial and professional staff from the scope of the annual overtime quota - set at 130 hours or 90 hours if working time is calculated over a 12-month period - since the adoption of the law on the 35-hour week in January 2000.

Article 1 of decree n°2000-82 of 31 January 2000 sets the annual overtime work quota in the context of the "Aubry" 35-hour week law of 19 January 2000 (FR0001137F). This quota - applicable to manual workers, clerical, supervisory and managerial and professional staff mentioned in Article L. 212-15-2 of the Labour Code - is set at 130 hours per employee per year, or 90 hours per employee per year "if the duration of weekly working time varies under the terms of a sector or company-level collective agreement on variable weekly hours [around an average]". Overtime hours above the statutory 35-hour working week, established as of 1 February 2000, grant entitlement to time off in lieu or a pay premium. The managerial and professional staff (cadres) referred to in Article L. 212-15-2 are, according to the law of 19 January 2000, those managerial and professional staff incorporated into a work team and subject to a collective working schedule within the company. Just like other workers, this group of staff are covered by all the regulations on the reduction of working time.

However, along with senior management, managerial and professional staff referred to as "intermediate" or working independently, are excluded from the overtime decree. Nevertheless, they "must benefit from an actual reduction of working time".

The law on the reduction of working time affords managerial and professional staff the opportunity to negotiate "flat-rate" (forfaitaire) individual working time reduction packages on a weekly, monthly or annual basis, the latter on condition that such schemes are provided for by a sectoral or company collective agreement, or by an "extended" collective agreement (ie one made applicable to a whole sector by the government). Three types of working time reduction package are available: those where the reduction is calculated in hours on a weekly or monthly basis; those where the reduction is calculated in hours on an annual basis (only valid for "intermediate" managerial and professional staff); and those where the reduction is calculated in days on an annual basis.

The CFDT and CGT trade union confederations, along with their managerial and professional staff sections (UCC and UGICT respectively), requested that the Supreme Administrative Court (Conseil d'Etat) to invalidate the decree due to the exclusion of "intermediate" managerial and professional staff from the annual overtime quota. The Conseil d'Etat is the highest administrative court in France, one of whose tasks is to rule on complaints against public authorities (ie the state, regional, départemental and municipal governments and public bodies).

Ruling partially supports unions

On 28 March 2001, the Supreme Administrative Court annulled the January 2000 decree because "it does not set a quota of overtime applicable to those members of the intermediate category of managerial staff (…) who have not signed an individual flat-rate package or who are governed individually by a package calculated in hours worked on a weekly or monthly basis." The court felt that parliament had not sought to exclude these employees from the provisions on the annual overtime quota, but had only allowed the government (holding regulatory powers) to treat this category of staff in a specific way. It was because these managers had been omitted from the quota that the decree was annulled.

However, not all intermediate managers are affected by the ruling. The judges thus excluded intermediate managerial staff with annual working time reduction packages calculated in hours (or days) from the application of the overtime quota, in so far as the application of such a package is subject to the conclusion of a sectoral or company-level agreement resulting from collective bargaining.

Lastly, the Court gave the government the possibility, in the forthcoming new decree, to provide for an overtime quota for intermediate managerial and professional staff different from the one in use for other employees as, "relative to managerial staff incorporated into a standard work schedule", intermediate managers "have a degree of leeway in determining their own schedules". The government can thus set a quota above 130 hours.

Unions welcome ruling

The two trade unions that brought the case to court welcomed the ruling. CFDT stated that "it particularly affects managers in small and medium-sized enterprises who would have been pressurised by their employers into signing individual working time packages with no restrictions on overtime." CGT declared that "this ruling has endorsed [our] struggle within companies and against the government, to block the deregulation of managers' working time." Nevertheless, CFDT lamented the fact that the overtime quota was not limited to 130 hours for all managerial and professional staff "with the option granted to the social partners by the law of obtaining exemption from this quota by an extended sectoral agreement". CGT, for its part, has questioned the selective nature of the ruling, which does not challenge the annualised packages.

The CFE-CGC union confederation, which represents managerial and professional staff, concluded "that the political scope (of this ruling) is considerable" in that the Supreme Administrative Court has declared that intermediate managers must be covered by the reduction of working time, and thus benefit from overtime and compensatory days off in lieu. However, CFE-CGC was critical that the ruling did not cover managers with annualised working time packages. The union has indeed filed a suit with the European Court of Human Rights"on the grounds of discrimination against this category of the population and a violation of the right to strike constituted by packages calculated in days with no limit to the number of hours to be worked". Lastly, CGT-FO agreed with the spirit of the ruling while re-emphasising its desire to see a four-day week for all managerial and professional staff.

For the employers, the MEDEF confederation considered that the annulment of the decree "highlights the need for an urgent rethink of the law on the 35-hour week". In MEDEF's opinion, the government has to allow "the social partners the freedom to set overtime quotas by collective agreement at sector and company level".

Commentary

Without challenging the "Aubry" law of 19 January 2000, the Supreme Administrative Court ruling again underscores the legislation's complexity and the problem posed by the reduction of working time for managerial and professional staff. The ruling follows demonstrations against the law by managers in autumn 1999 (FR9912122N and FR9911118N). It has also demonstrated the high degree of flexibility of working time introduced by this law, with the government not having provided for compensation for overtime worked by certain tiers of managerial staff.

The unions have welcomed this ruling. However, by excluding working time packages calculated on annual hours from its scope, the Court reasserted that, once the legislative authority has delegated power to the social partners, it has to let them negotiate regardless of the balance of power. In other words, in the current debate within the national talks on the "overhaul of industrial relations" about whether the law takes precedence over agreements and contracts (FR0102134F) the judges have adopted stances likely to please employers, for which "contracts must have primacy over the law, which has only a subsidiary role to play". (Simon Macaire – IRES).