In a ruling dated January 8, 2025, the French Supreme Court confirmed that the assessments of the works council’s expert on the company’s economic and financial situation are only meant to analyze the company’s accounts and evaluate its economic condition for the current year and the two preceding years.
In November 2022, as part of the works council’s mandatory consultations on the company’s HR policy and working conditions, the company’s economic and financial situation as well as the company’s strategic orientations, the central works council (“Comité Social et Economique Central” in French) of the Zara Group appointed a chartered accountant.
The expert then sent the Zara GRoup a lsit of information requests covering a period ranging from three to five years before, including specifically “standard employment contracts by position for the years 2019 and 2021” and “all quantitative data necessary to understand the evolution of employee remuneration following sectoral agreements of 2017 and 2019.” The expert informed the company that the estimated cost of his mission was EUR 203,000 excl. VAT.
The Zara Group challenged the scope of the expert’s mission.
The Civile court held these documents to be necessary for the expert’s mission as they were related to the consultation on the company’s economic and financial situation. Consequently, it rejected Zara Group’s challenge.
However, the French Supreme Court ultimately ruled in favor of the company with respect to the chronological scope of the expert’s requests, emphasizing that the accessible information should be limited to the current year and the two preceding years, in accordance with the French Labor Code. The Court based its ruling on Article R. 2312-10 of the French Labor Code, which defines the chronlogical scope of the data to be presented in the Economic, Social, and Environmental Database (« BDESE » in French).
The company also challenged the scope of the expert’s mission, arguing that it exceeded its mandate by addressing the sustainability of remuneration and the negotiation margins available to employees. The Civil court had dismissed this challenge, considering that these elements were related to payroll and, therefore, relevant to the assessment of the company’s economic and financial situation.
The French Supreme Court disagreed and confirmed that the Labor Code stipulates that the expert accountant’s mission covers all economic, financial, social, or environmental factors necessary to understand the company’s accounts and assess its situation (Article L. 2315-89 of the French Labor Code).
The French Supreme Court thus concluded that the Civil court should have substantiated “how the sustainability of current and past employee remuneration, as well as profitability and negotiation margins for employees, were elements necessary to understand the accounts and assess the company’s situation.”