Loyalty in negotiations

Paris Judicial Court, 20 June 2023, no. 22/04785

Failure to invite a representative union organisation to the final negotiation meetings of a collective agreement may constitute a breach of loyalty resulting in its annulment, irrespective of the later reopening of the negotiations.

At the end of more than 18 months of negotiations on a collective performance agreement (accord de performance collective, so-called “APC”), an employer announced that the negotiations were over, subject to a few “technical adjustments” to be made to the draft agreement, which he sent to the two representative union organisations within the company.

The two following negotiation meetings were only held with the union organisation having reached the majority of the votes of the employees during the previous elections of the employee representatives. The minority union organisation wasn’t invited as, according to the employer, it had declared it did not intend to execute the APC. At a meeting of the works council held immediately afterwards, the employer indicated that the majority union organisation signed the APC, which was still open for signature. The APC was then presented to the workforce.

The minority union organisation requested the employer to cancel the APC, claiming that the negotiations had been unfair. The employer then organised a final negotiation meeting, at the end of which a new version of the APC, including a few adjustments proposed by the minority union organisation, was prepared and, once again, signed by the majority union organisation alone. This latest version was filed and published, then challenged in court by the minority union organisation.

In a decision dated 20 June 2023, the Paris Judicial Court annulled the APC. It considered that the exclusion of the minority union organisation from the last negotiation meetings was a breach of loyalty, which had to be scrutinised with “particular vigilance” in view of the exceptional nature of the APC and the employer’s ability to dismiss employees who refuse its implementation. This solution is consistent with the position of the Court of Cassation, which had already confirmed the annulment of a collective agreement because of separate negotiations excluding certain representative union organisations (Cass. Labor div., 8 March 2017, no. 15-18.080).

More notable is the court’s position on the ineffectiveness of the employer’s regularisation attempt. On this point, it ruled that “the disloyalty that characterises the existence of separate negotiations invalidates by itself the entire negotiation process”. Therefore, it does not matter that the employer resumed negotiations with all representation union organisations. This may seem a harsh position, especially as the reopening of negotiations was not purely formal: some of the minority union’s observations were included in the final version of the APC. Nevertheless, the special nature of the APC, and the fact that the minority union organisation was presented with a fait accompli of the signature of the initial agreement, led the court to consider that senior management had not “regularised the situation with regard to loyalty”.

In the event of an appeal, the court’s position will be carefully awaited. In any event, it will be emphasised how important it is for the employer to comply with its obligation of neutrality in relation to all representative union organisations and to ensure that each of them is systematically invited to attend negotiation meetings. Should difficulties arise, the employer must resume the entire negotiation process. Until further clarification is provided on the practical implications of such a reprise, several solutions may be recommended. The employer can share with all representative union organisations the content of the discussions they have missed. It can also plan to resume negotiations as they stood prior to these discussions. Lastly, an agreement may be concluded to govern the reopening of negotiations.