This book provides a wide-ranging review of the European rules relating to distribution: exclusive purchase and exclusive supply, exclusive and selective distribution, motor vehicle distribution, franchises, commercial agents.

French Distribution Law

The termination of the employment contract is attributable to the employer who does not pay commissions owed to his sales representative  or pays them late , even if the sales representative instigated the termination . A goodwill indemnity is then owed to the sales representative . However, the non-payment of commissions at their due date because of circumstances ouside the employer's control doe …

Non-payment of commissions.

Like any agreement, the sales representative's contract of employment may be rescinded by mutual consent or for the causes that the law authorizes. The change in an essential element of the contract, even where more advantageous for the representative , requires the latter's agreement and must be in the form of a rider. It cannot be based on a clause devoid of contractual value . The refusal by an employee to accept such a measure is not regarded as a resignation, with loss of customary indemnities, but rather as a dismissal . The Court of Cassation even considers that the clause of a contract of employment pursuant to which the employer reserves the right to make substantial changes in the contract is null and void . The termination of the contract of employment is attributable to the employer if he ties the VRP to a contract purporting to deny him the benefit of the status as such .

A VRP cannot be found to have committed a serious breach where he fails to carry out the orders of his employer relating to secondary and unusual tasks, where the employer has unduly removed the material resources needed to carry them out . The termination is attributable to the employer where the latter changes the contract of employment by imposing the use of premises assigned to the activity of sales representative  or by replacing canvassing outside the undertaking by a sedentary activity of telephone prospecting .

Cass. soc., 19 May 1998, LawLex200200004580JBJ: the employer cannot reduce the rate of the VRP's commission without the latter's consent.

Cass. soc., 14 November 2007, LawLex200700001882JBJ: the fact that the sales representative takes due note of the termination of the contract of employment is regarded as a dismissal rather than a resignation where it results from a change in his remuneration by the employer pursuant to provisions having no contractual value.

For the change in the remuneration of the sales representative, see Cass. soc., 15 February 2006, LawLex200600000661JBJ.

For the canvassing area of the sales representative, see Cass. soc., 16 October 2002, LawLex200200006176JBJ; regarding the change in the remuneration, see Cass. soc., 22 March 2006, LawLex200600001000JBJ.

CA Orléans, 16 May 2002, LawLex200300000786JBJ: the termination of the contract of employment is attributable to the employer who subjects the sales representative to a contract intended to escape the benefit of the status; See also Cass. soc., 7 November 2006, LawLex200600002393JBJ: the termination of the contract of employment is attributable to the employer where the latter organizes a system intended to circumvent the legal rules relating to the minimum remuneration of the sales representative.

Cass. soc., 16 July 1998, LawLex200200004471JBJ.

Cass. soc., 27 September 2006, LawLex200600001990JBJ.

Cass. soc., 14 December 2010, LawLex201000001492JBJ.

Unilateral change in the contract of employment.

The method and rate of remuneration are substantial elements of the employment contract. Thus any change in the remuneration requires the consent of the employee . The change in the wages may be the direct consequence of the reduction in the rate of commissions . It may also be indirect and result from the fixing of new targets , the setting-up of maximum quotas which put an upper limit to the sales representative's remuneration , the loss of exclusivity following the designation of a new sales representative in the business sector  or the decrease in size of the geographic sector granted to the sales representative . The decrease in the remuneration may also be due to dysfunctions in the customer service of the undertaking and the unilateral increase in the purchase price of the products .

The change by the employer of the rate of commission despite the sales representative's refusal, justifies the termination of the contract of employment to the detriment of the employer . The fact that the sales representative has acknowledged the termination of the contract of employment based on that reason does not characterize a resignation but rather a dismissal without real and serious cause . Furthermore, as the unilateral change in the level of commission is sufficient to justify that the sales representative has taken due note of the termination, it is not necessary to check whether it is of a substantial nature .

Cass. soc., 20 October 1998, LawLex200200004579JBJ; 21 September 2005, LawLex200500009651JBJ: the change by the employer in the rate of commission despite the sales representative's refusal, justifies the termination of the contract of employment against that employer; 27 October 2009, LawLex200900003252JBJ: the termination notified by the sales representative following the change in his method of remuneration, which results in decreasing by half his earnings, is not analyzed as a resignation but rather as a termination at the employer's initiative which produce the effects of a dismissal without real and serious cause; 2 June 2010, LawLex201000000679JBJ: the termination of a sales representative's contract is attributable to the employer who unilaterally reneges on the repayment of the VRP's business expenses and the amount of his advances on commissions.

Cass. soc., 19 May 1998, LawLex200200004580JBJ: the employer cannot reduce the rate of commission of the sales representative without the latter's consent; 4 April 2007, LawLex200700000424JBJ, for the unilateral change in a corporate practice on the calculation of commissions before discount; 2 June 2010, LawLex201000000679JBJ, as to the repayment of business expenses of the representative and the amount of his advances on commissions.

Cass. soc., 26 January 2000, LawLex200200004453JBJ: the fixing of new objectives is an essential change in the contract of employment that the sales representative may refuse without the termination being regarded as a resignation.

Cass. soc., 18 July 2000, LawLex200200004585JBJ: the setting-up of maximum sales quotas is a change in the method of remuneration of the sales representative who cannot be imposed on him.

Cass. soc., 4 March 2003, LawLex200300000864JBJ; 5 December 2007, LawLex200700001968JBJ: removing from the sales representative part of the range he represents to entrust it to another representative on his geographic sector is a change in the contract of employment which may only be effected with the employee's consent and the fact that he acknowledges the termination based on these reasons is a dismissal without real and serious cause.

Cass. soc., 4 January 1996, LawLex200200004571JBJ; 10 December 2008, LawLex200900000142JBJ: the loss of use of a showroom previously made available to the sales representative allows the latter to acknowledge the termination of the contract of employment against the employer, where it has resulted in a change in his remuneration followed by a significant decrease in his turnover and the loss of related financial benefits. 

Cass. soc., 6 May 2009, LawLex200900001689JBJ.

Cass. soc., 20 October 1998, LawLex200200004579JBJ; 21 September 2005, LawLex200500009651JBJ.

Cass. soc., 15 February 2006, LawLex200600000661JBJ: the fact that the sales representative acknowledges the termination is regarded as a dismissal without real and serious cause where it originates in a change in his contract of employment relating to his conditions of remuneration; 14 November 2007, LawLex200700001882JBJ: the fact that the sales representative acknowledges the termination of the contract of employment, where it results from a change in his remuneration by the employer pursuant to provisions having no contractual value, is regarded as a dismissal rather than a resignation; 19 June 2008, LawLex200800001063JBJ: the fact that the sales representative acknowledges the termination of the contract of employment is regarded as a dismissal without real and serious cause where it is justified by the sudden setting-up of a control of the representative's activity to justify his remuneration, which was not provided for in the contract; 27 October 2009, LawLex200900003252JBJ: the termination notified by the sales representative following the change in his method of remuneration, which results in decreasing by half his earnings, is not regarded as a resignation but rather as a termination at the employer's initiative producing the effects of a dismissal without real and serious cause.

Cass. soc., 16 November 2011, LawLex201100001840JBJ.

Change in the sales representative's remuneration.

The area granted to the sales representative also constitutes an essential element of the sales representative's contract of employment. The sales representative may therefore refuse to agree to changes to his area, either by decreasing the geographic area assigned to him , or by removing exclusivity on his area . The fact that the reduction without his agreement of the VRP's area has not affected his remuneration is of no relevance . He may also object to the implementation of a clause of unilateral change by the employer in the canvassing area, where such a clause is contrary to public policy . The dismissal of the sales representative is without real and serious cause where it penalizes the latter's refusal to accept a change in his business sector not due to an economic cause .

Cass. soc., 11 February 1998, LawLex200200006149JBJ; 13 March 2001, LawLex200200004444JBJ; 5 December 2001, LawLex200200004438JBJ.

Cass. soc., 7 May 1998, LawLex200200004473JBJ; 13 October 1999, LawLex200200004460JBJ.

Cass. soc., 11 January 2012, LawLex201200000070JBJ.

Cass. soc., 5 December 2001, LawLex200200004438JBJ; see also 23 January 2001, LawLex200200004589JBJ: the sales representative's business area, condition of application of the status, cannot be unilaterally changed by the employer, even if stipulated in the contract.

Cass. soc., 13 March 2001, LawLex200200004444JBJ.

Change in the specified sector.

The termination of the employment contract is attributable to the employer who does not pay commissions owed to his sales representative  or pays them late , even if the sales representative instigated the termination . A goodwill indemnity is then owed to the sales representative . However, the non-payment of commissions at their due date because of circumstances ouside the employer's control does not constitute a fault that justifies the sales representative acknowledging the termination of the contract of employment .

The fact that the sales representative acknowledges the termination of the contract of employment on the grounds of non-payment by the employer of the commissions owed, is regarded as a resignation where the alleged facts have not been established . Where the court, hearing a claim for judicial termination of the contract of employment by the sales representative, considers that the breaches claimed against the employer do not justify the termination of the contract, it limits itself to rejecting the employee's claim .

Cass. soc., 25 November 1998, LawLex200200004469JBJ; Cass. soc., 7 November 1995, LawLex200200006051JBJ: the termination of a contract of employment is attributable to the employer where it is caused by repeated breaches of his obligation to pay the commission owed to the sales representative; 29 October 2002, LawLex200200006282JBJ: the employer's refusal to pay commission owed renders the termination of the contract of employment attributable to him.

Cass. soc., 28 October 1970, LawLex200200004159JBJ; 19 October 2004, LawLex200400002550JBJ: the non-payment of commission under normal circumstances justifies the termination of the contract against the employer, even at the sales representative's initiative.

This is also the case in respect of travelling exepnses: Cass. soc., 2 December 2003, LawLex200300004466JBJ.

Cass. soc., 30 June 1996, LawLex200200004574JBJ.

Cass. soc., 27 March 2008, LawLex200800000374JBJ.

Cass. soc., 15 March 2006, LawLex200600000863JBJ.

Cass. soc., 10 December 2008, LawLex200900000144JBJ.

French Distribution Law

591. Non-payment of commissions.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

591. Non-payment of commissions.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise