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Employment status of Directors

a brief overview

A Director of a French Company is not generally held or considered to be an employee in that particular capacity; instead he or she is held to be solely an officer (mandataire social in French) of the company.

The legal relationship between the Director (as an officer) and the company is thus subject to the provisions of French company law as opposed to French employment law.

That said, particular attention should be paid to terminology, for example in legal terms the French word 'Directeur' is not a translation of 'Director' in the sense of a person who is a member of the Board of a Company.

The French word 'Directeur' in a legal context would instead usually be translated as 'Manager'.

The English word 'Director' when referring to an individual appointed to the Board of a Company by the shareholders would usually be translated in a legal context as an 'Administrateur'

There is however a linguistic anomaly in respect of the position of Directeur Gnral of which a number of translations are possible e.g. Director General, Managing Director, General Director etc.

The role of Directeur Gnral would generally be held to be that of an officer of the company; but it is not unknown for an individual to hold a position as a salaried employee which is identified as a Directeur Gnral in his or her contract of employment.

The importance of these linguistic distinctions flows from the fact that because an 'Administrateur' is solely an officer of the company (in French a 'mandataire social') then he or she does not have a contract of employment with the Company and thus notably does not benefit from the extremely protective provisions (for the employee) of French Employment Law.

An 'Administrateur' is generally able to be removed from his or her position without notice or compensation; although the method of dismissal should not be vexatious and case law has now brought about the need for the removal to be underpinned by an objective cause.

It should though be noted that, in many cases, an 'Administrateur' or Director of a French company might also have a contract of employment, but this would be considered at French Law to be totally separate from his or her role as an officer of the company.

Such a contract of employment would relate to a specific function outside and distinct from his or her role of 'Director' or Administrateur and might for example be in his or her capacity as Financial Manager, Sales Manager or H.R. Manager.

The separate contract of employment would give the employee the full protection of French Employment Law provisions in regard to this specific function.

Thus, in the event that an individual was removed from the Board as an 'Administrateur' his or her contract of employment would not be affected and it could only be brought to an end for cause and by complying strictly with the statutory procedure within the framework of the applicable French employment law provisions.

It therefore follows that in the event that a person were formally dismissed from his or her position as an employee, separate steps would need to be taken to remove that person from any distinct role as an officer of the company.

The foregoing is not intended to be exhaustive and for specific information relating to the employment status of Directors, please click here