By way of order No. 9006 of 1 April 2019, the Court of Cassation has ruled that the minutes of a settlement agreement signed with the involvement of trade unions is actionable by the worker only in the event of vitiated consent or lack of assistance by the trade union representative. The court, on the other hand, is barred from any consideration of the parties’ arrangements concerning their reciprocal concessions.
The facts
The case in question arises from an appeal filed by a sales agent to obtain:
- a ruling voiding and/or the annulment of the minutes of the trade union settlement agreement entered into with his former principal; and
- the payment of a sum, for the activities carried out, as professional remuneration, contract termination indemnity, supplementary customer allowance and payment in lieu of notice.
In detail, the agent had argued, on one hand, the lack of assistance from the trade union representative in negotiating and signing the agreement, and on the other hand, that the company had exerted moral violence to force him to sign the agreement.
The competent court rejected the agent’s appeal, maintaining that the settlement agreement was not flawed. The agent therefore lodged an appeal, which was again rejected.
In fact, the territorially competent Court of Appeal highlighted, among other things, that:
- the agreement entered into satisfied the typical validity and effectiveness requirements of a settlement agreement;
- the purpose of the agreement was to compensate the effects of the termination of the agency relationship by way of payment of a sum, plus commission and other allowances, for which the agent had granted a reasonable deferral period to the company concerned;
- the alleged pressure exerted in the negotiation phase was not proven and was not admissible in the case at hand; and
- in any event, the deadline for challenging flaws in an agreement signed with the involvement of trade unions (6 months, as set out in art. 2113 of the civil code) had lapsed.
The agent therefore lodged an appeal with the Court of Cassation.
Court of Cassation ruling
Citing one of its previous judgements, the Court of Cassation first affirmed that settlements and waivers affecting the rights established in mandatory rules of law or in collective bargaining agreements – and agreed in the minutes of settlement agreements signed with the involvement of trade unions – are not actionable by workers. This is so provided that the assistance given by the trade union representatives (assistance provided by a lawyer is not deemed equivalent) has been effective in terms of putting the worker in the position of knowing which right is being relinquished and to what extent.
The Court of Cassation also took the view that a settlement agreement should state the common will of the parties to amicably settle an ongoing or likely dispute (res dubia), without any imbalance between the “datum” and the “retentum” having relevance. This is so pursuant to art. 1970 of the civil code, whereby “the settlement cannot be terminated on the grounds of losses since the consideration of the reciprocal sacrifices and benefits arising from the agreement is subjective and therefore left to the self-determination of the parties”.
The Court of Cassation also observed that, in the context of the settlement, the creditor’s decision to allow the debtor to defer the payment constituted a partial waiver and, therefore, a “concession” pursuant to art. 1195 of the civil code. This is because, under the civil code, an obligation to pay money, even in the context of an employment relationship, is to be satisfied by way of a single payment, since the creditor has the right to refuse a partial payment pursuant to art. 1181 of the civil code.
According to the Court of Cassation, it was on the basis of these principles that the trial court had rightly rejected the agent’s appeal. In fact, the settlement agreement had identified the reciprocal concessions made by the parties, specifically:
- for the agent, the waiver of the right to dispute the termination of the relationship and to demand the immediate payment of the commission accrued; and
- for the company, terminating all credit and debit claims, with exception to the payment of the amounts due.
The above on the assumption of the differing positions in terms of the respective rights and obligations.
Having not found evidence of any flaws that would result in the nullity and/or revocability of the settlement agreement, the Court of Cassation rejected the worker’s appeal and thus confirmed the legitimacy of the settlement Agreement.