Setting up the Social and Economic Committee: how to characterize a separate establishment?

In the absence of a collective agreement concluded with the representative trade unions – or failing that, with the Social and Economic Committee (SEC) – the employer unilaterally defines the scope of the separate establishments of the company at which level SECs will be set up. In the event of a dispute, the number and scope of the separate establishments are determined by the French Administration (DIRECCTE), under the supervision of the judicial judge (Article L. 2315-5 of the French Labour Code).

Since the Edict n°2017-1386 of 22 September 2017, the sole criterion for determining separate establishments is the “head of establishment’s management autonomy, in particular with regard to management staff” (Article L. 2313-4 of the Labour Code).

In a decision of 19 December 2018, the French Supreme Court, sitting on an appeal against a decision of the Saint Denis’ district court, held that this management autonomy is characterized in particular by:

– the extent of the delegation of authority entrusted with the establishment leader;
– the concentration of powers in the establishment leader ’s hands for the conduct of business, the execution of the service and for management acts.

In the same decision, the Court confirmed the jurisdiction of the judicial district court over all aspects of the Administration’s decision, including any external legality ground.

Thus, where a decision of the Administration is referred to it, the district court may, in particular, cancel the Administration’s decision and replace it with its own decision.

French Supreme Court, 19 December 2018, n°18-23.655