The legal context

Under French law, an employee’s remuneration is protected and the ability of an employer to deduct amounts owed to it by an employee from such employee’s remuneration is quite limited.

At least in theory, the offsetting of an employee’s debts to his/her employer against the employee’s remuneration is possible provided that the reciprocal debts are certain, liquid (i.e., the amount is determined) and currently due for payment. However, the conditions and terms pursuant to which such set-off can actually be effected in practice are complex and far from clear under the current state of the law.

It should be noted that French law strictly prohibits the employer from levying pecuniary sanctions against an employee, i.e. withholding amounts from an employee’s salary or other employee benefits if such withholding is deemed to constitute a disciplinary measure resulting from an employee’s misconduct.

Finally, and in any case, a deduction from remuneration is only possible up to a certain threshold determined by specific regulations.

In this context, what happens when an employee exceeds the limit on an employer-provided professional telephone package? Is the employer entitled to deduct the employee’s overrun from his/her salary?

The case

In the decision in question dated 15th May 2014, an employee was provided by his employer with a professional telephone along with a six-hour communication package. After the employee had repeatedly overrun the six-hour limit, triggering additional telephone charges for his employer, the employer decided to withhold the excess amounts from the employee’s salary. The employee was subsequently dismissed for a number of reasons, and brought an action for unfair dismissal against the employer. In the context of such action, among other claims, the employee requested the reimbursement of such deductions.

The Court of appeal ruled in favour of the employer and held that it was entitled to deduct the extra-costs resulting from the employee’s use of his professional telephone since he had exceeded the limit provided under the telephone package.

The Supreme Court’s ruling

The Supreme Court quashed the decision of the Court of appeal and held that a deduction from remuneration based on the employee’s overspending of the professional telephone package was an illicit pecuniary sanction. As a consequence, the Supreme Court decided that the employee’s claim for reimbursement should have been granted by the judges of the Court of appeal.

This decision should serve as a reminder that the ability of the employer to effect deductions from remuneration is very restricted. In any event, the employer is not totally powerless in such situations since the overspending by the employee of his/her telephone package could result in imposition of disciplinary sanctions. The employer can also seek to recover such professional overrun in a court action, since what is prohibited is set-off against salary but not the ability of the employer to exercise remedies before a court.

 

 

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