Background
Following an audit covering 2009 through 2012, URSSAF Nord-Pas-de-Calais issued Société [1] a formal demand dated November 10, 2014. It sought adjusted social security contributions arising from undeclared work, together with amounts due after cancellation of contribution reductions and exemptions previously received by the company.
The company later requested reimbursement of part of those amounts under the statutory mechanism allowing partial, rather than complete, cancellation of contribution reductions when the undeclared activity or employment represents only a limited share of the employer’s declared operations. URSSAF denied the request, and the company challenged that denial. The Amiens Court of Appeal rejected the challenge on January 8, 2024, after noting that the company had submitted its reimbursement request on July 10, 2020—after a March 14, 2019 Court of Cassation decision had rejected its appeal from the judgment validating the adjustment, including cancellation of its Fillon reductions.
The Court’s Holding
The Court of Cassation dismissed the company’s appeal. It held that, before all relevant provisions entered into force, contribution reductions and exemptions could not be canceled only partially based on the limited extent of the undeclared work. From January 1, 2020, the modulation mechanism applied to earlier cancellations involved in pending proceedings only upon the contributor’s express request, supported by persuasive documentation, and only where no irrevocable judicial decision had already been issued.
Because the governing 2019 legislation was in force when Société [1] first requested reimbursement in July 2020, its conditions applied to that request. By then, the March 14, 2019 decision had made the litigation over the adjustment irrevocable. The company therefore could not obtain partial cancellation or reimbursement, and the Court rejected its statutory and retroactivity arguments.
The constitutional branch of the appeal had become inoperative because, in a September 12, 2024 decision, the Court of Cassation had declined to refer the separately presented priority constitutional question to the Constitutional Council. The company’s distinct argument under Article 1 of Protocol No. 1 to the European Convention on Human Rights was inadmissible because neither the appellate judgment nor the company’s submissions showed that it had raised that Convention-based property-rights claim before the Court of Appeal.
Key Takeaways
- Since January 1, 2020, the partial-cancellation mechanism applies to earlier cancellations in pending proceedings only upon an express, adequately documented request and only if no irrevocable judicial decision has been rendered.
- A reimbursement request made after litigation validating the underlying adjustment has become irrevocable cannot revive eligibility for partial cancellation.
- The Court treated the constitutional question separately from the Convention property-rights claim: the former became inoperative after referral was declined, while the latter was inadmissible because it had not been raised below.
Why It Matters
The decision clarifies the transitional operation of France’s mechanism for moderating the cancellation of social security contribution reductions following a finding of limited undeclared work. An employer whose earlier cancellation remained genuinely unresolved on January 1, 2020 could invoke the mechanism only by satisfying the conditions introduced by the December 24, 2019 legislation.
The ruling also underscores the importance of procedural finality. The later creation or implementation of a reimbursement mechanism does not reopen an adjustment already confirmed by an irrevocable judicial decision, and a Convention-based property-rights argument may be inadmissible on cassation if it was not presented to the appellate court.