French Employment law - Variable remuneration with a potestative clause: a sales representative from Compagnie IBM France obtains a commission reminder of 256,000 euros gross (CA Paris March 9, 2023)

2) Decision of the Paris Court of Appeal of March 9, 2023

In its decision of March 9th, 2023 (RG 21/00888), the Paris Court of Appeal:

. confirms the judgment undertaken in that it dismissed Mr.

for mobility leave allowance, compensation for rapid realization of

project and specific incentive compensation,

. the cripple for the rest,

Ruling again on infirm heads and adding:

. orders Compagnie IBM France to pay Mr.

- 233,104.59 euros gross as a reminder of variable remuneration for the first half of 2017

- 23,310.46 euros gross for related paid leave;

- 2000 euros under the provisions of article 700 of the code of civil procedure

. says that the employer will be required to present the employee with a summary pay slip,

and a Pôle Emploi certificate complying with the terms of this decision within the deadline of

two months following the notification of this judgment,

. states that the sums of a salary nature will produce interest at the legal rate from the receipt by the employer of its summons for conciliation and that the sums of a compensatory nature will produce interest at the legal rate from this judgment,

2.1- On the request for a reminder of variable remuneration for the first half of the year 2017

The variable remuneration plan agreed between Compagnie IBM France and Mr.

The parties agree that the transactions concerned by Mr.

Compagnie IBM France explains, however, that it was justified in adjusting the employee's variable remuneration and that it was therefore right not to pay him 9% of the total turnover thus achieved, i.e. 333,006.57 euros but 99,901.98 euros.

Thus, she emphasizes that Mr. she had indicated to the employee by email of February 6, 2017 that beyond 100% of her expected earnings, the files would be studied and could be subject to a so-called “capping” adjustment (exhibit 5 of the respondent company ).

She also argues that the employee's commission plan included a clause entitled significant transaction which authorized her to adjust the amount of commissions paid (exhibit 7 from the respondent company).

However, the method of remuneration of an employee constitutes an element of their employment contract which cannot be modified without their agreement.

Also, as the employee points out, the email by which his employer indicated to him that the amount of his variable remuneration may be subject to an adjustment does not have contractual value and cannot therefore be opposed to him.

Furthermore, under the terms of 1304-2 of the civil code, any obligation contracted under a condition whose fulfillment depends solely on the will of the debtor is void.

In this case, the “significant transaction” clause stipulated in Mr. of variable remuneration concerned for the period of validity of the plan. In this case, the normal operation of the plan would be distorted, which would result in a payment disproportionate to the employee's actual contribution. Consequently and in order to restore the broken balance, the management of Compagnie IBM France reserves the possibility of adjusting the payment based on the actual contribution of the employee to the signing of this significant transaction and/or on the relationship between said significant transaction and the potential of the territory taken into account when determining the quota. The management of Company Y will justify this adjustment”.

Thus, this clause does not set any clear, objective and predefined criteria making it possible to know the methods of calculating the cap on variable remuneration and how “the actual contribution of the employee” is determined and consequently allows the respondent company to reserve the right to adjust the payment of commissions according to its sole will.

It is therefore potestative and cannot therefore be opposed to the employee.

The respondent company cannot therefore rely on it.

Also, she did not have the ability to cap the employee's commission by referring to the email from M.L., SW director of January 16, 2018 according to which: “Mr. SaaS transactions throughout the country although it does not play a key role in each of them. To reflect its overall cross-contribution: support for transactions, animation of SaaS actions... management's assessment is that it should receive 30% of transactions which are also supported by other sellers directly in their territories and technical sellers ”(exhibit 17 from the employer), which also makes no reference to any “significant transaction” or to any specific element relating to the adjustment made.

Mr.

3,700,073 euros.

The judgment will therefore be reversed in that it rejected the employee's recall request.

of commissions calculated on this basis.

Compagnie IBM France will therefore be ordered to pay him a sum of

233,104.59 euros corresponding to the difference between what he should have received

(333,006.57 euros) and what he received (99,901.98 euros) as a reminder of variable remuneration, in addition to the related paid leave.

To read all the decision please click on the link below

https://consultation.avocat.fr/blog/frederic-chhum/article-48471-french-labour-law-variable-remuneration-with-a-potestative-clause-a-sales-representative-from-an-it-company-obtains-a-commission-reminder-of-256-000-euros-gross-ca-paris-march-9-2023.html

Frédéric CHHUM avocat et ancien membre du conseil de l’ordre des avocats de Paris (mandat 2019-2021)

CHHUM AVOCATS (Paris, Nantes, Lille)

e-mail: chhum@chhum-avocats.com

www.chhum-avocats.fr

https://www.instagram.com/fredericchhum/?hl=fr

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