An employee hired as a mechanic in 1991 was assigned to the sales department of his employer's garage as a salesperson in 2001, before being promoted to head of sales in March 2012. Through a new addendum to his employment contract in July 2012, the employee was again named a salesperson. The employment contract was terminated by mutual agreement on April 3 2013 with effect from April 30 2013.
Through the courts, the employee sought payment of an additional 629.19 overtime hours for 2011. The employer rejected this request on the grounds that the employee had been a senior manager at that time.
Decision
In its ruling, the Court of Appeal referred to Article L162-8 of the Labour Code, which defines the conditions that must be fulfilled for an employee to be considered a senior executive. The court stated that when an employee disputes being a senior executive, the burden of proof lies with the employer.
The court therefore reiterated the following legal conditions that must be fulfilled in order for an employee to be considered a senior executive, while specifying that they are cumulative:
•the employee's remuneration must be significantly and distinctly higher than that of employees covered by a collective agreement or scaled by other means, taking into account the time necessary for the employee to execute his or her tasks; and
•the employee must have either effective managerial power or, in the scope of the execution of his or her tasks: ◦well-defined authority;
◦significant independence in the organisation of his or her work and work hours; and
◦in particular, no constraints with regard to his or her work hours.
First condition: high salary
The court ruled that for an employee to be considered a senior executive, his or her salary must be significantly higher than that of employees covered by a collective agreement or scaled by other means, taking into account the time required to perform duties. The court noted that, in the present case, the employee's salary statements showed that he had received a fixed hourly wage corresponding to the social minimum wage for skilled workers. Further, this high pay rate had been due to the premiums and commissions earned on the large number of vehicles sold, and that other dealers had also benefited from this commission system (as is customary in car sales). The employer had therefore failed to provide evidence of a significantly higher wage.
Second condition: directive power or well-defined authority exercised with independence and freedom
To be considered a senior executive, an employee must alternatively:
• exercise effective directive power; or
• have well-defined authority, wide-reaching independence and broad freedom regarding his or her work schedule.
It was noted that the employer in the present case had merely produced flowcharts and job descriptions, without proving that it had actually applied them. It also found that the responsibilities assumed by the employee according to the documents produced – namely, supervising a sales team, checking purchase orders and ordering cars – were insufficient to establish that he had had true directive or decision-making power, as was the signing of a single team member's request for leave in the absence of a more senior staff member.
Finally, the court held that the employee had had no freedom regarding the organisation of his work hours. According to the testimony produced, the employer had required the employee to be present outside the garage's opening and closing hours at its request, in order to place orders without being disturbed by customers and calls. In addition, the employee had been required to clock in and out, as shown by a copy of the monthly record of staff hours.
In light of the above, the Court of Appeal concluded that the employee's claim for overtime was well founded, as the employer had failed to prove his alleged status of senior executive. The employer was thus ordered to pay the employee €11,011.70 in overtime for 2011.
For further information on this topic please contact Guy Castegnaro or Ariane Claverie at Castegnaro by telephone (+352 26 86 82 1) or email ([email protected] or [email protected]). The Castegnaro website can be accessed at www.castegnaro.lu.