The French Labor Relations Court declared that it is competent to hear John Galliano's labor claims against Christian Dior Couture.

The initial hearing took place this past Monday, February 04, 2013. Although Dior's attorneys argues that the case should be heard by a commercial court due to the "complicated nature of contracts" between the designer and the two companies (Christian Dior Couture and John Galliano), the Labor Relations Court ruled in favor of Galliano. Now, Dior has 15 days to contest the ruling. If it opposes the court’s decision, the matter will be referred to the Paris court of appeal in seven or nine months’ time.

During the hearing, the terms of Galliano's contracts were discussed. Below a brief description, according to Dior's attorneys, as reported by WWD:
"Galliano was linked to Christian Dior Couture and John Galliano by a multitude of contracts, including several consultancy agreements with Galliano’s company, Cheyenne Freedom.
He added that these could not be treated separately from the employment contracts established between Galliano and the two companies, and that he was therefore more an independent contractor than a subordinate.
The court heard that under the terms of permanent contracts negotiated in 2008, Galliano earned a fixed gross annual salary of 1 million euros, or $1.3 million at current exchange, at Christian Dior Couture, plus variable compensation of up to 700,000 euros, or $906,400, and a percentage linked to the firm’s annual sales rise.
Other perks included an annual clothing budget of 30,000 euros, or $38,850, and a grooming budget for personal appearances of 60,000 euros, or $77,700.
In addition, Galliano earned a fixed gross salary of 2 million euros, or $2.6 million, as artistic director of his own brand, and a percentage linked to the decrease in annual losses at the perennially unprofitable house. That contract also stipulated an annual clothing budget of 70,000 euros, or $90,650.
Through Cheyenne Freedom, the designer also earned hefty fees for consulting for Christian Dior Couture and Parfums Christian Dior on matters such as advertising campaigns, catwalk shows and Web sites."
After working for 15 years as creative director at Dior, Galliano was dismissed in March, 2011,  after making public racist and anti-Semitic insults.  Galliano is now seeking around US$ 7.7 million in damages for his dismissal.

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