June 2015 - Luxembourg Employment News
Why it is important to have working conditions in writing
A recent decision of the Court of Appeal (Cour d’Appel) of 21 May 2015, reference no. 40618 confirmed well-established case law with respect to the proof of an employment contract, whether in regards to its existence or its contents. The solution offered by the Court is a classic one, although not less important. It reiterates the preferential treatment of employees with respect to the question of proof and is a wake-up call for those employers who wish to avoid having working conditions in writing.
The rules applicable to the proof of an employment contract
The abovementioned decision of 21 May 2015 dealt with a case where the employee claimed his salary arrears for the period prior to his dismissal with notice. The employer challenged this claim, arguing that the employee had asked to reduce his working time and agreed to the related reduced salary.
However, the reduction of working time and the respective decrease of the salary had not been formalised in writing as required by Article L.121-4 (4) of the Labour Code. The article in question provides that the modification of certain contractual clauses, in particular the weekly working hours and the salary, must be made in writing, without prejudice to the special provisions applicable to unfavourable amendments of an essential clause of the contract.
In this case, however, no addendum to the employment contract had been signed. Consequently, the employer attempted to prove that the employee was the one who requested the reduction of his working time by submitting a certain number of witness statements. The judges had to analyse the admissibility of these statements.
Pursuant to Article 58 of the Code of Civil Procedure (Nouveau Code de la Procédure Civile), each party is obliged to prove the necessary facts to see its claim succeed. Thus, in labour law, the one who invokes an employment contract and its content has to prove it.
It is yet to be determined what type of proof will be admissible.
Article L.121-4 (1) of the Labour Code provides that any permanent or fixed-term employment contract has to be stipulated in writing, individually for each employee, no later than the employee’s first day of work. Nonetheless, Article L.121-4 (5) adds that absent written form, the employee can prove the existence and the content of its employment contract by any means of evidence, regardless of the value of the dispute.
Thus, the provision of Article L.121-4 (5) of the Labour Code applies to the employee alone. There is no legal provision entitling the employer to such possibility. As a result, the latter remains subject to the formalities of Article 1341 of the Civil Code, which provides that legal acts exceeding a value of EUR 2,500 require literal proof, i.e. in written form.
The consequences of non-compliance with legal formalities
In the abovementioned case law, the judges of the Court of Appeal clearly drew attention to the rules that apply to the types of proof of an employment contract.
Thus, the judges determined that if paragraph (5) of Article L.121-4 of the Labour Code allows the employee in case of absence of any written form to prove the existence and the content of its employment contract by any type of evidence, this does not apply to the employer. The latter, confronted with the objections of the employee, remains, in relation to the evidence’s submission of the amendment of the employment contract’s realisation, subject to the strict provisions of Article 1341 of the Civil Code on the literal proof of legal acts.
Therefore, the witness statements submitted by the employer are not admissible as they concern a legal act whose value is greater than EUR 2,500. The employer cannot therefore prove that the employee had accepted the amendment of its employment contract, even if non-admissible types of evidence would clearly prove it.
In this respect, the distinction of the types of evidence is without doubt in favour of employees.
These formal requirements aim to protect employees against a potential ignorance of their rights and to guarantee their defence in legal proceedings.
As a consequence, the law requires and the diligent employer should take the precaution that it respect the formalities of written form to protect itself against any risk of the employee challenging the content of the employment contract. The distinction with regard to the submission of evidence should therefore be taken into account by employers as it will not be in their favour in the event of legal dispute.