Armada 2019 - The Legal Status of a Self-Employed in front of Subordination Relationship

Armada of Rouen (2013) : Characterization of an Employment Contract based on the Link Subordinating a Service Provider (“Self-Employed Manager”) to a Fast Food Operator

On March 7, 2019, the Rouen Court of Appeal confirmed the reclassification as an Employment Contract of the professional commitment by which Mr. Y, a registered self-employed entrepreneur, managed a fast food stand operated at the Armada of Rouen (2013 edition) for a catering company named “Troisième Mi-Temps”.

Considering that his working conditions did not correspond to a agreement, Mr. Y brought an action before the Bernay Labour Court in recognition of an employment contract, as well as in payment of backpay and compensation.

On June 20, 2014, the Labour Court judges declined their comperence in favour of the Rouen Commercial Court, considering that there was no employment contract between the conflicting parties. On June 2, 2015, the Rouen Court of Appeal ruled that the Bernay Labour Court had jurisdiction according to the opposite reasoning.

The Labour Court Judges aligned themselves with those of the Rouen Court of Appeal and ordered Mr. Y’s former employer to pay him various sums (compensation, damages) on November 4, 2016.

“Troisième Mi-Temps” appealed. In particular, the company contested the presence of an Employment Contract with Mr. Y in the absence of a subordinate relationship between it and him.

Mr. Y had provided a series of services for the company “Troisième Mi-Temps” as part of the operation of a fast food stand set up on the Armada of Rouen (2013 edition).

His tasks included :

  • staff recruitment;

  • organization and management of the staff accommodation in a student residence;

  • preparation of the stand with all suppliers and service providers chosen by “Troisième Mi-Temps” before the festivities;

  • organization and management of the stand during the festivities (health, safety, supplies, etc.).

Mr. Y had the status of a self-employed entrepreneur throughout his professional relationship with “Troisième Mi-Temps”. Tthis quality established a legal presumption against the existence of an employment contract. According to Article L. 8221-6 (I) of the Labour Code workers registered in the Trade and Companies Register or in the Employment Repertoire are presumed not to exercise their professional activities within the framework of an employment relationship.

The same article (II) nevertheless adds: “The existence of an employment contract may, however, be established when the persons mentioned in I provide services directly or through an intermediary to a principal under conditions which place them in a relationship of permanent legal subordination to the latter”.

Consequently, the trial judges, first before the Labour Court of Bernay, then before Court of Appeal of Rouen, sought to determine whether the documents produced by the disputing parties demonstrated the existence of a subordinate relationship between Mr. Y and “Troisième Mi-Temps”.

The case law has defined three main criteria for establishing employee status : the power of the employer to order, control and sanction the work of an employee.

To these three elements, the courts regularly add a fourth relating to the performance of a professional activity within the framework of an “organized service” under conditions determined unilaterally by a person distinct from the worker concerned.

In this case, the judges recognized the existence of a subordinate relationship based on the instructions and control imposed by “Troisième Mi-Temps” on Mr. Y. From the documents on file, it appears that the company controlled the determination of tariffs (validations) and the selection of services (corrections) carried out by Mr. Y. In addition, “Troisième Mi-Temps” supervised Mr. Y’s coordination and management activities. Mr. Y introduced himself as the “operator’s representative” to the administration during an inspection.

As for the presence or not of an organized working environment, the Rouen Court of Appeal ruled in the affirmative, following the example of the Bernay Labour Court, emphasizing the provision by “Troisième Mi-Temps” of the material and personal resources necessary for the performance of Mr. Y’s “services”.

In particular, the trial judges held that Mr. Y had been accommodated at the company’s expense and that he had at his disposal a professional vehicle belonging to it for the performance of his duties. Finally, the estimates and invoices that passed through Mr. Y were systematically sent and then paid by “Troisième Mi-Temps”.

On the basis of these considerations, the Court of Appeal confirmed the judgement of fist instance of November 4, 2016 characterising the presence of an employment contract between Mr. Y and the company “Troisième Mi-Temps”.

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