Dual Status of Employment contract and a Business Manager
Essential interest is to enable the dismissed manager to receive unemployment benefit. However, the conditions for having dual status should be satisfied.
Practical interest of cumulation
- Meet three conditions
- Distinct functions
- A specific remuneration
- Subordinate functions
- Preliminary questioning of the France Travail
- Regulated agreement
- Option to Consult France Travail
Practical interest of dual status of employment contract and a directorship contract.
The tax authorities and social security authorities treat certain company directors as employees. However, legally, these corporate officers are not real employees. If they lose their jobs, they are not entitled to severance pay or unemployment benefits from the France Travail. To be eligible, they would have to be in a contract of employment in addition to their directorship contract. However, the conditions imposed are extremely strict.
- Meet three conditions.
In practice, the validity of having dual status of employment contract and a directorship contract is assessed case-by-case, the solution significantly depends on the functions performed, the size of the company and the technical nature or not of the tasks performed under the employment contract.
Apart from the possible obligation to satisfy specific conditions provided for in the Articles of Association in the case of an SAS, cumulation between a directorship contract and an employment contract is permitted if the employment contract corresponds to actual employment, which implies the fulfilment of three conditions.
- Distinct functions: As an employee, the manager must perform a technical function involving specific technical knowledge that is distinct from the duties of his corporate office.
- A specific remuneration: The employment contract must give rise to a salary corresponding to the duties. Therefore, if the corporate office is remunerated, the employee must also receive two remunerations.
- Subordinate functions: The employee representative must work under a subordinate relationship to the company. The employee must be under the authority of the employer, who has the power to give him orders, to control their execution and to sanction his subordinate’s breaches. This condition is, in practice, the most difficult to satisfy, the one whose absence will prevent the validity of the cumulation. The smaller the company, the more difficult it will be for the manager to demonstrate that he or she can act both as an agent with broad managerial powers and as a subordinate employee.
- Preliminary questioning of the France Travail
In general, it is at the moment when the manager asserts a right to compensation that the situation is contested either by the FRANCE TRAVAIL or by the AGS when he has lost his functions due to the company’s failure.
