In the French commercial world, sales representatives are a special category of employee with a specific protective status. This legal protection responds to the risks inherent in this profession, which is characterised by a high degree of autonomy. Before hiring a VRP or engaging in this profession, it is essential to understand the precise contours of this status, its conditions of application and what distinguishes it from other commercial intermediaries.
Definition and origins of VRP status
The acronym "VRP" stands for Voyageurs, Représentants et Placiers du commerce et de l'industrie. Historically, these three terms corresponded to different realities: the "placier" visited customers in the locality of the company's head office, the "voyageur" covered a wider geographical area, while the "représentant" had greater independence to conclude contracts.
The legal status of sales representatives was created by the Act of 18 July 1937, with a dual objective:
- Fully assimilate these intermediaries to employees when they operate under certain conditions defined by law
- Put an end to abuses in the field of representation, in particular unjustified dismissals after the development of a clientele
The most emblematic measure of this law was the introduction of a "customer indemnity" paid to the sales representative in the event of termination of the contract attributable to the employer. The purpose of this indemnity is to compensate the sales representative for the loss of the clientele he has helped to develop.
Today, this status is defined by articles L. 7311-1 to L. 7313-18 and D. 7313-1 of the French Labour Code. It has undergone two major reforms:
- The Act of 7 March 1957, which abolished the requirement for a written contract and extended the benefit of the status
- The law of 9 May 1973, which allowed VRPs to carry out other activities on behalf of their employers
A national inter-professional agreement of 3 October 1975 supplemented these legal provisions, particularly with regard to severance pay.
Legal conditions governing access to the status of sales representative
Article L. 7311-3 of the French Labour Code defines four cumulative conditions for access to the status of sales representative:
Representation activity
Sales representation is at the heart of the VRP profession. It comprises three essential elements:
Customer prospecting Sales representatives must seek out potential customers by travelling. Case law requires the profession to be itinerant. As the Court of Cassation has ruled (Soc. 5 May 1998, no. 95-45.326), the sales representative must "travel outside the company to approach customers through the visits he makes".
This canvassing must be personal. VRPs may not delegate this task to employees whom they pay themselves, on pain of losing their status.
Taking orders : Simply canvassing is not enough. The sales representative must also take orders from customers. The Court of Cassation has specified that "representation consists not only in approaching the potential customer to get him to specify his wishes, but also, if successful, in taking the subsequent purchase order" (Soc. 16 June 1965).
Transmitting orders Finally, the VRP must transmit these orders to his employer. The Court of Cassation considers this to be "the essential activity of the statutory representative" (Soc. 19 October 1972).
Exclusive and constant practice of the profession
Sales representatives must carry out their activity exclusively. This means that, in principle, they may not pursue other professions in parallel with their activity as a sales representative.
However, the Law of 9 May 1973 introduced an important exception: the Staff Regulations continue to apply "to employees who, in addition to the actual and usual exercise of representation, have agreed to engage in other activities, whatever their nature, provided that they do so on behalf of one or more of their employers" (art. L. 7311-2).
To benefit from this exception, two conditions must be met:
- The ancillary activity must be carried out for the same employer or employers
- The representation activity must remain effective and habitual (predominant)
The exercise of the profession must also be constant, i.e. continuous and not occasional, except in the case of seasonal products.
Refraining from personal commercial transactions
VRPs must not carry out any commercial transactions on their own behalf. This condition derives from his status as an employee.
The following are therefore incompatible with the status of sales representative:
- Running a business, even through an intermediary
- Registration in the Trade and Companies Register (unless proven otherwise)
- The del credere agreement (under which the representative guarantees payment by customers)
- Commercial acts, including incidental ones
Determining the essential elements of the contract
The agreements between the VRP and the employer must specify :
- The nature of the services or goods offered for sale or purchase
- The region in which the sales representative works or the categories of customers to be visited
- Rates of pay
The sector entrusted to the sales representative may be defined geographically (a territory) or by customer category. It must be defined and must be relatively fixed. Unilateral modification of the sector by the employer constitutes a change to the employment contract that cannot be imposed on the employee.
The status of VRP: a status of public order and the primacy of actual conditions
A fundamental characteristic of the status of sales representative is its public policy nature. Article L. 7313-1 of the French Labour Code states that the provisions apply "notwithstanding any stipulation in the contract".
The 1957 reform abolished the requirement for a written contract in order to benefit from the status. Article L. 7313-3 even introduces a presumption of application of the statute in favour of persons acting without a written contract.
In all cases, the actual conditions under which the activity is carried out take precedence over the contractual stipulations. As the Court of Cassation has pointed out: "The status of traveller, representative and sales representative applies ipso jure if the actual conditions under which the work is performed meet the legal requirements" (Soc. 4 January 1979).
For example, a representative who is described in a contract as a "commercial agent" or "commercial attaché" will be able to obtain the benefit of this status if he or she actually fulfils the legal conditions.
Distinctions from other commercial intermediaries
The VRP is distinguished from other commercial intermediaries by a number of specific criteria:
Distinction from commercial agents
Article L. 134-1 of the French Commercial Code defines a commercial agent as "an agent who, in a self-employed capacity, without being bound by a contract for the hire of services, is permanently responsible for negotiating and possibly concluding contracts".
The main distinction lies in the fact that commercial agents are independent professionals, whereas VRPs are salaried employees. Commercial agents have complete freedom to organise their business and can operate as companies, which is not possible for VRPs.
The Court of Cassation has emphasised that a sales representative "cannot have total control over the organisation of his activity" (Soc. 30 January 1992), unlike a commercial agent.
Distinction from commission agents
The distinction is clearer with commission agents, who act in their own name on behalf of a principal (art. L. 132-1 of the French Commercial Code). Commission agents are personally committed to their customers, unlike sales representatives, who are committed to their employer.
Furthermore, the commission agent is a trader (art. L. 110-1, 5° of the French Commercial Code), a status that is incompatible with the status of VRP.
Distinction from brokers
Brokers, who are also traders (art. L. 110-1, 7° of the French Commercial Code), differ from sales representatives in that their activity is not based on legal representation. Their role is limited to putting sellers and buyers in touch with each other, without committing themselves personally or representing any party.
For advice tailored to your specific situation (a company wishing to use a commercial intermediary or a sales professional seeking to clarify its status), our law firm can help you analyse your situation and secure your commercial relations.
Sources
- French Labour Code, Articles L. 7311-1 to L. 7313-18 and D. 7313-1
- French Commercial Code, articles L. 110-1, L. 132-1, L. 134-1 to L. 134-17
- National interprofessional agreement for sales representatives of 3 October 1975
- Law of 18 July 1937 establishing the legal status of sales representatives
- Act No. 57-277 of 7 March 1957 and Act No. 73-463 of 9 May 1973 amending the Staff Regulations
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