The French Supreme Court (Cour de cassation) clarifies the scope of the mission of the expert accountant designated by the Works Council (CSE) in the context of consultation on the company’s economic and financial situation.

Cass. soc., June 1, 2023, no. 21-23.393

In a decision released on June 1, 2023, the French Supreme Court clarifies that the mission of the expert accountant designated by the Works Council for consultation on the company’s economic and financial situation:

– May cover the situation and role of the company within the group to which it belongs.

– Can only cover the current year and the two preceding years.

On June 4, 2021, the Works Council of CRM08 (a company belonging to the Comdata group) designated an expert accountant in the context of the consultation on the company’s economic and financial situation for 2020.

On June 14, the expert sent the employer his engagement letter, which stipulated that :

-The expertise would also cover the situation of the Comdata group and the situation of CRM08 within the Comdata group;

-The expertise would cover the last five financial years.

On June 23, the employer applied to the judge to request that the expert accountant’s mission be limited to:

-The economic and financial situation of the CRM08 company and not to extend to the situation of the Comdata group or to the situation of the CRM08 company within the Comdata group.

-The years 2019, 2020 and 2021, and does not extend to fiscal years 2016, 2017 and 2018.

The Judge rejected the employer’s claims, considering that :

-The expert accountant’s mission may cover the situation and role of the company within the group to which it belongs;

-There is no legal rule limiting the expert accountant’s mission to the current year and the two preceding years.

The French Supreme Court validates the first point, but censures the second.

-On the first point (the extension of the expertise to the company’s situation within the group):

It points out that :

• In application of article L. 2315-89 of the French Labor Code, the expert accountant’s mission covers all the economic, financial and social elements required to understand the accounts and assess the company’s situation.
• In order to carry out any checks or controls that fall within the scope of his duties, the expert accountant has access to the same documents as the company’s statutory auditor, in application of article L. 2315-90 of the French Labor Code.
• In application of Article L. 823-14 of the French Commercial Code, the statutory auditor’s inquiries may be made both of the entity whose accounts the statutory auditor is responsible for certifying, and of the persons or entities that control this entity or are controlled by it.

The French Supreme Court therefore concludes that the Judge was right to consider that the expertise mission for the examination of the economic and financial situation of the company may cover the situation and role of the company within the group to which it belongs.

-On the second point (the temporal limitation of the expertise):

The French Supreme Court points out that Article R. 2312-10 of the French Labor Code requires the information contained in the Economic and Social Data Base to cover the current year, the two preceding years and, as they may be envisaged, the following three years.

It concludes that :

• The expertise to which the Works Council may decide to have recourse in the context of the annual consultation on the economic and financial situation of the company can only relate to the current year (the year of the consultation) and the two preceding years;
• Consequently, the Judge was wrong to consider that the mission of the expert accountant could not be limited in time.

This decision is in line with earlier rulings by the French Supreme Court (Cour de cassation), which provide a flexible approach to the scope of the chartered accountant’s prerogatives in relation to recurring consultations with the CSE, in terms of both time and materiality. This further clarifies the scope of his prerogatives, and in practice removes the possibility of disagreement, or even legal action, over the terms and conditions of his involvement.