Senior executive: should he participate in the management of the company?

Senior executive status is governed by the Labor Code. It requires the fulfillment of several cumulative criteria. In particular, its employees must be empowered to make decisions quite independently. But does this criterion imply involving its employees in defining the strategy of the company and its governing bodies? Response of the Court of Cassation.

Senior Executive: The cumulative criteria to be met to achieve this status

Your employees must meet several cumulative criteria in order to benefit from senior executive status under the Labor Code (art. L. 3111-2):

  • being a manager: this may result from a mention in their employment contract, the classification of their collective agreement, the power of command they have in relation to employees and/or their technical, administrative, legal, commercial or financial training;
  • they have responsibilities whose importance implies great independence in organizing their schedule;
  • be empowered to make decisions largely autonomously;
  • receive remuneration at the highest level of the remuneration systems practiced in the company or establishment.

When they comply with these conditions, their employees are not subject to the provisions relating to working hours, rest periods and holidays. Therefore, you are under no obligation to count your working time. Nor pay overtime for those who worked more than 35 hours a week.

In the event of litigation, judges will check the functions actually performed by their staff to assess whether they qualify for senior executive status. If this is not the case, you will be exposed to overtime pay (see our article “Executive Executive: You Incur Overtime Pay if the Employee Does Not Qualify for This Status”).

If you want to know more about senior executive status, we recommend our “Tissot social enterprise ACTIV” documentation. You can also download our CDI template to hire employees as a senior executive.

But what does the empowerment of the employee to make decisions in a largely autonomous way really entail? Does this criterion oblige you to involve your employees in defining the strategy of the company and its governing bodies? And, therefore, participate in the management of the company? The Court of Cassation once again ruled on this issue.

Senior executive: the need to participate in the management of the company

In the case submitted to the Court of Cassation, an employee had been employed as an operations manager for a hotel restaurant and restaurant manager. He received an average gross monthly salary for 39 hours a week. In addition to an annual bonus of 5% of the previous year’s gross operating income.

This employee had entered into a conventional break with his employer. He then sued the labor court to obtain payment of various amounts for the performance of his employment contract.

The company was ordered by the Court of Appeal to pay various amounts to the worker. Such as overtime, paid leave and compensation for non-compliance with mandatory rest compensation. For a total value of around 115,000 euros…

In question ? Exclusion of the employee’s status as a senior executive in relation to his/her functions actually performed. The Court of Appeal noted that the employee had to report to the company’s CEO. The latter ensured the management and definition of the company’s policy. Thus, it was not established that the employee participated in defining the strategy of the company and its governing bodies.

The company contested this decision. It considered that those reasons did not make it possible to exclude the worker’s status as a top manager. Which, according to her, met the criteria imposed by the Labor Code.

Based on the definition of the top executive established by the Labor Code, the Court of Cassation agreed with the Court of Appeal. The employee benefited from the highest salary in the company and had a certain independence in organizing his schedule. But it does not follow from the documents presented that he had any decision-making power or autonomy from a top executive.

Good to know

This solution is in line with the decisions handed down by the Court of Cassation on the qualification of a top executive. It generally considers that only executives who participate in the management of the company qualify for senior executive status.

Court of Cassation, Social Chamber, April 13, 2022, nº 20-13.817 (the senior executive must have the power to decide in a largely autonomous way. company strategy and its governing bodies)

amelie Gianino

Lawyer in social law and editor of Tissot Editions

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