Herbies may have a problem in Paris. The firm is being targeted for an action before the Paris Criminal Court for allegedly illegally employing an associate reports the Lawyer:

The action is being brought by sole practitioner and member of the Syndicat des Avocats de France (SAF) Avi Bitton on behalf of a former Herbert Smith associate who was dismissed earlier this year.

The associate was hired in 2006 under a self-employment contract, but claims that since she was required to devote more than 10 hours a day to working for Herbert Smith, with no time to develop personal clients, she was effectively an employee.

Contracting associates is common in France compared to the UK. With its more Socialist traditions, employee red tape and taxes have been even more of a burden to employers across the Channel, making contracting popular. However, the label given to employment arrangements will not always convince the courts if the reality doesn’t fit:

“In the UK associates have an employment contract and when they’re dismissed have the benefit of social insurances,” he said. “But in Paris, about 95 per cent of associates are recruited as self employed, then the firm’s supposed to allow them to develop their own clients.

“If that’s not the case then a judge may consider that the associates are, in reality, under employment contract, and so can claim substantial damages. But there are also criminal aspects because since the employers haven’t declared the employee’s status then they don’t pay social charges, which is illegal employment,” he claimed.

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The case strikes a chord because leading City firms are looking at contracting with more enthusiasm these days. After the dramatic axe swinging in the last year, the potential of contracting to reduce the pain and expense associated with any further redundancy programmes is seductive. It would also help firms keep fixed costs down and provide greater flexibility in a very uncertain medium-term environment.

For contracting associates the freedom might be also tempting. But what is offered might not be so sweet if they end up being treated just as any other associate but without the benefits of full time employment. And for contractors that end up as disgruntled as this one, suing firms is not a great thing to have on the CV unless they can make a career out of it.