Tag archives: bonus

Recent developments in French employment law regarding financial institutions: How the French Government wants to enhance Paris’ attractiveness as a global financial place

Apart from certain provisions which may be tailored to the relevant situations negotiated by companies or sectors of business through collective agreements (subject to compliance with a number of basic rules and principles), French employment law does not include any specificities in relation to certain sectors of business.

In particular, financial institutions are subject to the same set of rules as any other French company.

However, this may change in the next few weeks or months.

As part of the process of ratification of President Macron’s ordinances reforming the French labour code,  the French National Assembly adopted on 23 November … Continue Reading

Failure by the employer to set an employee’s targets may justify the judicial termination of the employment contract

General background

The principle of remuneration based on the employee’s performance has long been permitted by French employment law provided in particular that such remuneration is based on objective criteria, does not result in payment of remuneration inferior to the minimum wage and complies with the general principle of equal work for equal pay.

In the context of variable remuneration, the setting of the employee’s objectives is decisive since it is the achievement of such objectives that determines the extent of his/her variable remuneration.

In addition, if the employment contract provides that the employee’s objectives will be set upon agreement … Continue Reading

Variable remuneration: French language is mandatory

The legal background

One of the main concerns of a business is to ensure its employees’ commitment and to encourage employees’ initiatives in order to fuel innovations and business growth. This is one of the reasons which motivates companies to pay their employees variable remuneration based on their performance.

Such remuneration is generally permitted under French employment law provided that it is based on objective criteria beyond the sole control of the employer, does not result in payment below the minimum wage and complies with the general principle of equal pay for equal work.

The applicable case law also requires … Continue Reading

Variable remuneration: a motivational tool to use with caution

It is common practice for companies to pay their employees a variable remuneration based on their performance. Such remuneration has become an increasingly popular component of employee compensation as it constitutes a very effective way of ensuring employee commitment.

French case law permits such remuneration but lays down strict conditions to be complied with. Consequently, variable pay is acceptable provided that such remuneration is based on objective criteria beyond the sole control of the employer, does not result in payment below the minimum wage and complies with the general principle of equal work for equal pay.

It is tempting for … Continue Reading

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