Not so long ago, our law firm defended a case where the industrial tribunal had sentenced a company based on the Ordinance of Villers-Cotterêts, which imposed the use of French in all official acts in… 1539! Yes, from the 16th century, the epoch of King François I! This reference to a legislative text that is nearly five centuries old made us laugh… a lot. Until, however, we realised that this ordinance is still in effect today and that the Labour Code is a distant heir as it, too, imposes the use of French in certain written documents intended for French employees… even if their working language is English and the employee speaks the language perfectly as it was a condition for being hired.
This requirement particularly applies to variable remuneration schemes (incentive scheme, compensation plan, group bonus programme, etc.). These schemes set targets to be reached and they lay out the methods for calculating bonuses.
So far nothing new.
However, we have seen that the practices of international groups rarely comply and also the latter are unaware of the consequences that arise when a translation is mandatory but missing. To translate or not to translate, that is the question! And those are two good reasons for this question to be taken seriously.
In principle, variable remuneration schemes must be written in French, unless they come from abroad or the employee, for whom the scheme is intended, is of foreign nationality (Labour Code, Article L.1321-6).
For example, a scheme drawn up by the parent company in the USA, set out as such on the French subsidiary’s headed notepaper and signed by the French director, must be translated into French (Versailles Court of Appeal, 12 January 2023, court docket number RG 20/01551, the company ZTE France).
Without a translation, the scheme and more precisely the targets are not binding on French employees, who can claim their entire variable remuneration, regardless of both their results and the company’s.
A sobering thought when one considers that bonuses can reach several tens of thousands of euros…
On the other hand, if the scheme is set out on the foreign entity’s headed notepaper and signed by a foreign legal representative (group CEO), it falls within the exception of Article L. 1321-6 of the Labour Code, which provides that a document, and its contents, received from abroad and written in English is binding on French employees (Versailles Court of Appeal, 5 April 2023, court docket number RG 21/00929, the company STIGA).