In a decision published on March 28, 2018, the Social Chamber of the French Supreme Court clarified the rules on the compensation of RTT days, in the absence of specific provisions in a collective agreement (Cass. Soc., March 28, 2018, No. 16-27.626; 16-27.641).

In this case, seven employees contested their company’s rules on the compensation of RTT days which did not take into account the variable part of their remuneration. Only the fixed part was included in the base for calculating the compensatory RTT days indemnity.

The arguments invoked by the Company:

The employer stated that the Aubry II law established 35 hours as the legal working time without accompanying this reduction in working time with an obligation to maintain the salary. As a result, the Company considered that although employers could decide to keep the previous remuneration outside any obligation, they could freely choose to maintain only the fixed part of the salary, to the exclusion of the variable part.

It also argued that RTT days corresponded to hours worked, between 35 and 39 hours, for which no variable remuneration had been provided. Therefore, taking RTT days does not affect in any way the employee’s variable remuneration, since the activity which these RTT days compensate cannot be subject to variable remuneration.

The French Supreme Court’s solution:

The Court of Appeal rejected the Company’s arguments and decided to model the regime of RTT days on that of paid vacation days.

The French Supreme Court also granted the employees’ claim but pursuant to another reasoning.

It specified that “unless specifically provided (…) in the collective labor agreement on the conditions for maintaining the salary in case of a reduction in working time, the employee cannot suffer any loss of salary for taking days compensating the reduction in working time”.

The consequences of the decision:

Unless provided otherwise in collective bargaining agreements, the compensation of RTT days must include the fixed part and the variable part of the remuneration. In this case, the base for calculating the compensation of the RTT days should have included the “gross sales bonuses” since they were closely linked to the employee’s activity and performance.

• Could an employer adapt through a collective agreement the rules for calculating the compensation of RTT days by excluding from the calculation base the variable remuneration received by employees? 

By analogy with the rules applicable to calculating the paid vacation indemnity, this seems possible for the variable remuneration determined annually, since including this annual remuneration in the RTT base would be tantamount to the employer paying the variable bonuses twice.

However, it would be prudent to see whether the French Supreme Court intends to make the rules on the payment of RTT days and paid vacation days converge, since if we are edging towards this assimilation, it would then not be possible to exclude the other variable elements from the base for calculating the compensatory RTT days indemnity.

On the other hand, given the contractual nature of the rules of operation of RTT days, it would also be possible to consider that the decision opens the possibility to provide in the collective agreement on the organization of working time calculation rules specific to the RTT days indemnity, notably excluding the variable elements of the employees’ remuneration from the calculation base.