Sharing profit-sharing

Cass. Soc., 9 May 2019, n° 17-16.910

The amount of the mandatory profit-sharing to be paid to the employees within a company could be distributed in proportion to the employee’s salary.

In the case at hand, the Court of Appeal had reclassified a part-time employment contract into a full-time contract and granted the employee a salary back payment. However, it dismissed the employee’s request for the related profit-sharing bonus back payment. The Court held that the assessment of the mandatory profit-sharing amount as well as its distribution were both finalized on an annual basis and thus no back payment for the mandatory profit-sharing bonus could be calculated afterwards.

This decision was overturned by the French Supreme Court, which ruled that when a salary back payment is granted due to the reclassification of a part-time contract into a full-time contract, the employee must also be granted the mandatory profit-sharing bonus that he was deprived at the time the mandatory profit-sharing amount was distributed.

Greatest diligence is therefore necessary during the elaboration and performance of part-time employment contracts given the significant financial consequences (including on profit-sharing) of a potential reclassification into a full-time employment contract.