Union delegate: outsourcing canteen management does not end his mandate

Imagine: you are the owner of a building in Wittenheim, and you run a small shop on the ground floor. One day, you entrust the management of your shop to an independent manager for a year. Do your employees change boss? Does your union delegate lose his mandate? This is exactly the question the Court of Cassation decided in 1981, in a case concerning… company canteens. A little-known but crucial decision for any employer or site manager.

You may have asked yourself this question if you have outsourced a service: canteen, cleaning, security. Does labour law protect employee representatives in the event of a simple change of contractor? The answer is yes, subject to conditions. And it comes from a case where the Paris canteens of a major bank changed hands without the union losing its delegate.

In this article, we break down this decision for you, property owners or real estate professionals in Kingersheim or elsewhere. You will understand when a distinct establishment subsists, and above all how to avoid a costly dispute over union representativeness.

The facts: a story that happens every day

We are in Paris, on the premises of Société Générale. The works committee of Paris manages several canteens for employees. These canteens employed a number of people, forming a distinct establishment of more than fifty employees. A union delegate had been appointed there. But then the bank decides, for a period of one year, to entrust the management of these canteens to an external catering company. The cooks, waiters and cleaning staff then find themselves under the direction of a new manager. Is the union delegate's mandate void?

The union argues that it is not: the canteens remain the same, the workplace is identical, the employees are the same. The historical employer, Société Générale, contests: the transfer of management, even temporary, transfers authority, and therefore the distinct establishment no longer exists. The Paris tribunal d'instance, seized at first instance, rules in favour of the union. The employer appeals to the Court of Cassation. The Supreme Court examines the case.

On 5 March 1981, the civil chamber of the Court of Cassation delivers its judgment: it dismisses the appeal and confirms that the union delegate's mandate subsisted. Why? Because the lower court judges had found that the canteens, as a whole, still constituted a distinct establishment of more than fifty employees, and that this distinct character had not disappeared with the temporary change of manager. The decision is clear: the distinct establishment continued, so the union delegate remains in place.

The reasoning of the court — broken down

The Court of Cassation relies on Article L. 412-11 of the Labour Code (now L. 2143-1), which provides that any representative trade union may appoint a union delegate in each distinct establishment of more than fifty employees. The concept of distinct establishment is at the heart of the debate. What is a distinct establishment? It is a group of employees who work under a common management, in the same place or a set of nearby places, and who have a certain autonomy of management.

In this case, the Paris canteens formed a coherent whole, with a single manager, a separate budget, and a community of workers. The fact that management is entrusted to an external contractor for a year does not change the nature of the establishment: the employees remain the same, the place is identical, the day-to-day management is certainly outsourced, but the ultimate authority (the employer) remains Société Générale. The judges considered that the modification was temporary and did not affect the permanent structure of the establishment.

The Court validates the reasoning of the tribunal d'instance: the lower court judge had sovereignly assessed the facts. He found that the distinct establishment subsisted, and this finding is sufficient to justify the survival of the mandate. The decision is not a revolution, but a confirmation: previous case law already protected employee representatives in the event of a change in work organisation, provided that the establishment retained its identity. Here, the Court clarifies that the transfer of management, even to an external company, does not erase the distinct establishment if it remains identifiable and retains more than fifty employees.

The employer argued that the transfer of management entailed a transfer of the subordinate relationship: the canteen employees would no longer be under the authority of the bank. But the judges dismissed this argument: the provision of services is not equivalent to a transfer of business. The manager is merely a contractor, the employer remains Société Générale. The union delegate therefore retains his mandate.

What this means for you — concretely

Landlord owners, you may manage an office building in Kingersheim. If you outsource the management of the cafeteria to a caterer, the employees of that cafeteria remain your employees (or those of your tenant) if the distinct establishment remains. You cannot get rid of a union delegate simply by changing contractors.

Tenant traders, if you have subcontracted the management of your company restaurant to a specialist, know that your union representatives retain their mandate as long as the distinct establishment exists. For example, if you manage a canteen employing 60 people in Wittenheim and you entrust the management to a contract catering company for a year, your union delegate remains in place. You must therefore continue to respect his prerogatives: meetings, display, delegation hours.

Purchasers of a business or company, this decision also concerns you. During a takeover, if you outsource a service within the first year, pre-existing union mandates subsist if the distinct establishment persists. Do not believe that a simple change of manager allows you to start from scratch. The courts look at the reality of the establishment, not the legal form.

Concrete example: imagine a works committee of 80 employees in Kingersheim. The mandate of a union delegate runs for 4 years. If the employer transfers management to a contractor after 2 years, the delegate remains in office until the end of his mandate. A misjudgment could be costly: an annulled election, damages for obstruction of trade union rights.

Four tips to avoid this type of dispute

• Clearly identify the distinct establishment: before any outsourcing, check whether the entity concerned constitutes a distinct establishment of more than 50 employees. Consult your lawyer for a case-by-case analysis.
• Contractually provide for mandate management: in the service contract, specify that the contractor has no authority over the employees and that the employer retains the status of employer. This will avoid ambiguities.
• Inform and consult employee representatives: if you are considering a change in organisation, consult the works council (CSE) beforehand. A unilateral decision may be challenged.
• Document the continuity of the establishment: keep a register of staff by distinct establishment. In the event of an inspection, you will be able to demonstrate that the establishment has continued and that the mandates are legitimate.

Further reading: related case law and developments

This 1981 decision is part of a protective line for employee representatives. Before it, a Court of Cassation judgment of 13 June 1979 (No. 78-60.115) had already held that the transfer of part of a company's activities to another did not automatically result in the loss of the status of distinct establishment. Later, the judgment of 22 January 1992 (No. 90-60.072) clarified that the concept of distinct establishment is based on objective criteria: the size of the workforce, management autonomy, the community of workers. The trend of the courts is constant: they favour the reality of labour relations over legal form. In practice, a mere change of contractor is not enough to make a distinct establishment disappear. This means that, for employers, outsourcing a service does not circumvent trade union rights. Conversely, for unions, this case law provides security: their mandate cannot be called into question by a temporary restructuring.

Checklist before acting

• Before transferring management of a service:
  • Check whether the entity concerned constitutes a distinct establishment of more than 50 employees.
  • Consult the CSE or union delegates.
  • Draft a service contract that does not transfer employer status.
• If you are a union delegate:
  • Check that the distinct establishment subsists after the change of manager.
  • Continue to exercise your functions: meetings, display, delegation hours.
  • In case of dispute, refer the matter to the judicial court (formerly tribunal d'instance) to have your mandate recognised.
• In the event of a dispute:
  • Gather evidence of the existence of the distinct establishment: staff lists, organigram, accounting documents.
  • Consult a lawyer specialising in labour law. The procedure is fast (interim relief) but the stakes are high.

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