Clifford Chance

On December 5, 2023, the Tribunal of Paris ordered its first injunction to amend and improve a vigilance plan and set high standards on risk assessment and due diligence processes.

Context

The French trade union, Sud PTT, had brought a claim to the Tribunal of Paris regarding the use of undeclared/illegal workers by La Poste's subcontractors. On the grounds of the French duty of vigilance law, the trade union requested from the Tribunal to issue an injunction to La Poste to complete its duty of vigilance plan to better address human rights risks associated with undeclared or illegal work , and unlawful subcontracting but also, more generally, harassment and other labour-related infringements.

Solution

The Tribunal partly upheld the trade union's claims and issued the very first injunction to improve a vigilance plan. It however did not impose any financial sanction nor accede to other ancillary requests made by the plaintiff.

High expectations on risks assessments

The Tribunal clearly stated that the vigilance plan was a risk-based exercise, ultimately putting the risk assessment at the heart of all processes in connection with the duty of vigilance. In this respect, it developed a very articulated criticism of La Poste's risk assessment as published in its annual report. It considered that the company's risk assessment lacked precision. Even though La Poste had described the risks it faced in its annual report, the Tribunal considered that it remained at a high level of generality and the risk assessment did not precisely identify top-priority risks.

This alone was sufficient to order La Poste to improve its vigilance plan. The Tribunal also included in its injunction the requirement to improve other aspects of the vigilance plan, namely the due diligence process, the whistleblowing mechanism and internal controls ("dispositif de suivi").

Through this decision, the Tribunal of Paris sets high standards in terms of transparency on risk exposure (for example it criticized the gross risk/net risk methodology stating that ultimately net risks as presented in the annual report were all too low).

This means that companies will have to be transparent, lucid and rigorous in their communication on risk exposure. A key takeaway from this decision is that underestimating risks will not necessarily protect companies against potential claims.

Absence of financial sanctions: the ongoing improvements and the iterative nature of the vigilance plan are taken into account

Despite the plaintiff's request, the Tribunal did not order a financial sanction as it refused to impose the €50,000 penalty considering that La Poste had already initiated the enhancement of its vigilance plan.

Dismissal of the request to publish the list of subcontractors and suppliers and other ancillary requests

The trade union had also requested the publication of the list of all subcontractors and suppliers. This request was however dismissed based on the protection of trade secrets.

The Tribunal also dismissed the request to issue an injunction to La Poste to establish protective measures relating to subcontracting, the prevention of psycho-social risks and the fight against undeclared or illegal work . The tribunal considered that it could not substitute itself to the company to require the design and implementation of specific measures such as the ones requested by the trade union.

This decision can still be appealed by La Poste, but it seems from their press release after the publication of the decision that they do not necessarily intend to do so (see here, in French).