According to several recent Appeal court decisions, a dismissal of an employee of an SAS company (“Société par actions simplifiée”) is void unless the signatory of the notification of dismissal is the president of the company or a duly empowered officer whose power of attorney has been declared to the commercial registry and published on the company’s commercial registry extract (“Kbis”).
These decisions were based on company law provisions which specify that an SAS is represented towards third parties by its president, whose powers can also be exercised by another officer, subject to provisions to this effect in the bylaws of the company and an appropriate filing with the Commercial Registry.
The courts ruled that the employees are third parties and therefore that a power of attorney given to any other person or in any other form than that provided for the representation of the SAS towards third parties is valid, as is any notification of dismissal signed in application of such power of attorney.
Among the Appeal courts which have adopted such a position are the important and influential courts of Paris and Versailles (notably Court of Appeal of Versailles, 24th September 2009; Court of Appeal of Paris, 10th December 2009).
These decisions have been referred to the French Supreme Court (“Cour de Cassation”). Its ruling will be awaited with impatience by many SAS companies, especially those which have notified dismissals in recent months, including many subsidiaries of foreign groups, for which the SAS form has frequently been adopted because of its relative flexibility.
Pending a ruling by the Cour de Cassation on the question of the validity of powers of attorney given to employees of an SAS, many such companies prefer to have their president sign such notifications, and even to modify their bylaws in order to make it possible for the president to delegate authority to an authorised officer.