Overview of recent French labour laws
By Joël Grangé
Posted: 13th June 2017 08:54The Hollande presidency was the source of many labour law reforms. The newly elected President Macron promises to continue and accelerate this trend.
The Macron Law on growth, activity and equal economic opportunities, published on 7 August 2015, implements key reforms concerning collective redundancies, working time and proceedings before the labour courts, which aim to strengthen France’s economic growth. It bears the name of the new president, who in 2015 was minister of the economy and who spearheaded this reform.
In carrying out a collective redundancy, the employer must determine which employees will be affected by redundancy through the application of “selection criteria”. These criteria are applied within each professional category concerned, namely between employees who have similar training and similar positions within the company.
The Macron Law has also broadened the possibility for Sunday and evening work in certain tourist and commercial zones.
Additionally, the Macron Law has also bolstered the efficiency of the labour courts.
The Rebsamen Law on social dialogue, which entered into force on 18 August 2015, seeks to streamline social dialogue and the functioning of staff representative bodies within companies, including by creating regional staff representative bodies for smaller companies, regrouping staff representative bodies in both smaller and larger companies, and restructuring the information and consultation of existing staff representative bodies.
El Khomri Law
A further law reforming French employment law, introduced by Labour Minister Myriam El Khomri was passed in August 2016 and is currently entering into effect via a cascade of decrees and application dates.
Before its introduction to parliament, the bill was the cause of numerous demonstrations and prompted heated debate and changes to the original text.
Below is a summary of the most significant measures in the law. Some of the main new regulations can be summarised as follows:
1. Measures regarding the duration of work
The El Khomri Law aims at softening the legal upper limit of weekly work.
The legal duration of work remains 35 hours per week, but this new regulation will allow employees to reach 44 weekly hours, and even 46 weekly hours within a period of 12 weeks, should this increase be set out in a company-level agreement. (Before this, only industry-wide agreements could allow for such a raise).
It will now be possible to raise the weekly upper limit to 60 hours, should “exceptional circumstances” justify this. Such an increase can only be temporary.
Moreover, the law allows the daily legal limit (10 hours) to be increased up to 12 hours when decided by a collective company-level agreement.
Overtime hours are paid at an increased rate of 25% for the first eight hours of overtime and by 50% after that. However, a collective company-level agreement will be able to reduce this percentage to 10%.
The law sets up a battery of new rules for employers regarding the use and limits of annual lump sum agreements for working time, including annual meetings to discuss the work/life balance, remuneration, rest, and the disconnection from devices during off time.
2. Changes to collective bargaining
The law aims to streamline sectorial agreements by reducing their number from 750 to 200 through consolidation of existing agreements.
The role of collective company-level agreement is reinforced.
In order to be valid, a collective company-level agreement must be signed by both the employer and one or several unions of workers representing 50% of the votes cast. Should no agreement be reached, a union of workers representing 30% of the employees would be entitled to ask for consultation of the employees, within one month. This consultation process allows for employees to express their opinion of their working conditions.
The agreement is valid if approved by employees in the majority of the votes cast.
However, the law also reinforces the role of industry-wide agreements in certain matters, such as the regulation of competition between companies and to prevent “social dumping”.
3. Economic redundancy
The El Khomri Law clarifies the legal definition of economic redundancy and includes the motives that have typically found in case law of the French Supreme Court (“Cour de cassation”), namely: business activity termination and reorganisation of the company to protect its competitiveness.
Moreover, the difficulties which may legally justify an economic redundancy are specified, again in consideration of the French Supreme Court decisions. Those difficulties include: a decrease in orders or sales, operating losses, a significant financial deterioration, etc.
The law introduces a lifelong personal career account (CPA-compte personnel d’activité) to keep track of the employee’s lifelong professional development, which includes employer-provided training.
The law also updates or simplifies certain individual rights such as bereavement leaves, while creating new rights such as the disconnection from devices during off time in companies with 50 or more workers.
Sapin II law
Transparency, responsibility, accountability. Such are the guiding words of the new Sapin II Law (entitled the Law on Transparency, the Fight Against Corruption, and for the Modernisation of Economic Life), which was recently approved by France’s Constitutional Council and which will now enter into effect over the coming months.
The Sapin II expands extra-territorial reach for French prosecutors. The law applies to corruption by French companies overseas and foreign companies who have a presence in France.
It creates new obligations for companies to take an active role in preventing corruption. Companies with over 500 employees and/or an annual turnover in excess of €100m must put in place a framework to allow for accountability.
The law puts in place eight mandatory measures for a corruption prevention program. So far, these include a code of conduct to be integrated into the internal regulations of the company; an internal whistleblowing mechanism; ongoing risk assessments; due diligence regarding clients, suppliers and intermediaries; internal and external controls; training; a roster of disciplinary sanctions; and an internal audit of the program.
The law creates a new national anti-corruption agency called Agence Française Anticorruption (AFA).
The law requires all companies with more than 50 employees to establish a whistleblower mechanism and provide protection against retaliation guaranteeing confidentiality. The system is different from its UK and US counterparts and only applies to disinterested parties. Whistleblowers receive immunity from criminal prosecution. Whistleblowers must first use the internal whistleblowing channels before blowing the whistle to the public authorities and the press.
Joël Grangé is widely respected for his extensive knowledge and considerable experience in French labour law, he advises French and international clients. He has developed a strong practice in mergers and restructuring operations, notably through the handling of collective redundancies and transfers of undertakings.
Joël represents his clients in collective disputes before labour courts and also assists them in the preparation and negotiation of collective agreements. He helps clients in their relations with executive management. His Professional Memberships: L&E Global; EELA; IBA; AVOSIAL. Career: Head of Gide Loyrette Nouel Law department (1999-2008). Partner of Flichy Grangé Avocats since 2008.
Joel can be contacted on +33 (0)1 56 62 75 33