French labour law - Traders: what the “Pacte Law” of March 22nd, 2019 changes regarding recoverable bonuses

Among the changes introduced by the so-called "Pact" Law No. 219-486 of 22 March 2019 on the growth and transformation of companies are two series of measures concerning traders receiving variable remuneration.

Indeed, this is the subject of several provisions contained in the Monetary and Financial Code, which have been amended by Article 77 of the aforementioned law.

1) Restitution of variable remuneration in case of ignorance of the rules relating to risk taking

Article L. 511-84 (1) of the previous Code now provides that "the total amount of the variable remuneration may, in whole or in part, be reduced or give rise to restitution" if "the person concerned has breached the rules enacted by the institution in terms of risk taking ".

On the one hand, this possibility is expressly prescribed by the article as constituting a derogation from the principle of prohibition of pecuniary sanctions provided for by Article L. 1331-2 of the Labor Code.

On the other hand, the use of this sanction may be taken against the employee "in particular because of his responsibility in actions resulting in significant losses for the establishment or in case of breach of the obligations of good repute and skill ". If the adverb "in particular" suggests that the list of opening cases is not limiting, the possibility of applying such a measure seems however framed.

In addition, it is clear from this law that the application of this restitution system entails the implementation of another mechanism.

2) The exclusion of sums refunded when determining the amount of certain severance payments of the employment contract

The following article, Article L. 511-84-1 of the Monetary and Financial Code (2), actually supplements the previous scheme.

It is provided that the amounts which have been the subject of a refund are also excluded from the calculation basis determining the amount of several indemnities placed at the expense of the employer.

This eviction is provided for the calculation of the following indemnities:

- compensation awarded following a dismissal in breach of the provisions relating to the reinstatement of the employee in "his or her employment or similar job" following a sick leave or an occupational disease (3);

- Compensation due in case of dismissal for incapacity disregarding "provisions relating to the reclassification of the employee declared unfit" (3);

- Legal compensation for dismissal following the termination of an employment contract of indefinite duration provided for in Article L. 1234-9 (4);

- Severance pay for no real and serious cause and whose amount is included in the scale as provided for in Article L. 1235-3 (5);

- indemnity for dismissal (6);

- Compensatory allowance for the absence of reinstatement in the workforce as a result of dismissal for economic reasons, due to a lack of the employment protection plan (7);
- Allowance granted by the judge in the event of the employee's absence from being reinstated in the company to which he could normally aspire after the cancellation of the PES validation decision (8).

Employees affected by the exclusion of bonuses are the "risk takers" as defined by Commission Delegated Regulation (EU) No 604/2014 of 4 March 2014 (9).

In other words, these different texts set a certain number of "qualitative and quantitative" criteria.

These are then used to establish "categories of staff whose professional activities have a significant impact on an institution's risk profile".

For example, when the qualitative criteria refer more to the functions performed by the employee (managerial, executive, or supervisory function), the quantitative criteria, they, rather relate to the remuneration he receives (10) .

Lastly, the variable remuneration received by these employees is subject to double punitive treatment when it is established that a certain number of rules have been infringed.

In the parliamentary debates that preceded the adoption of the Pact Act, this device was interpreted as a reaction to the Kerviel case.

An amendment was even proposed by some senators, who criticized this sanction for targeting individual traders even though they operate in the system organized by the banks that employ them (11).

These provisions, however, were adopted and came into force in May.



(1) L. 511-84, Monetary and Financial Code

(2) L. 511-84-1, Monetary and Financial Code

(3) L. 1226-15, Labor Code

(4) L. 1234-9, Labor Code

(5) L. 1235-3, Labor Code

(6) L. 1235-3-1, Labor Code

(7) L. 1235-11, Labor Code

(8) L. 1235-16, Labor Code

(9) and (10) COMMISSION DELEGATED REGULATION (EU) No 604/2014 of 4 March 2014 supplementing Directive 2013/36 / EU of the European Parliament and of the Council

(11) Meeting of January 31, 2019 (full minutes of proceedings), available on the official website of the Senate


Frédéric CHHUM, Avocats à la Cour et membre du conseil de l’ordre des avocats de Paris

Claire Chardès

CHHUM AVOCATS (Paris, Nantes, Lille)

e-mail :!/fchhum

.Paris: 4 rue Bayard 75008 Paris tel: 0142560300

.Nantes: 41, Quai de la Fosse 44000 Nantes tel: 0228442644

.Lille: 25, rue Gounod 59000 Lille tel: 0320135083


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