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Global employment briefing: France, October 2017

  • France
  • Employment law

06-10-2017

Reforms to the French employment social model: “Macron” Executive Orders

After three months of consultation and drafting, the reforms aimed at reshaping France’s social model and promised by President Macron during his election campaign have been finalised and adopted.

A summary of the Macron changes

Strengthening negotiation at the company level

At the level of companies, all the agreements should be “majority” agreements starting from 1st May 2018. This rule requires the signature of trade unions with more than 50% of the votes cast and should be generalised sooner than the current legislation provides for (in September 2019 at the latest). As an exception, a “non-majority” agreement could be approved by referendum at the employer’s initiative if the agreement has been signed by trade unions with more than 30% of the votes cast and if they do not object to it.

Also, a new type of agreement would be aimed at helping companies to adapt quickly to changing market conditions. To that end, these majority agreements could adjust, inter alia, working time and organisation, remuneration and professional or internal geographical mobility specific to a company. The provisions of these agreements would automatically substitute for the contrary and inconsistent clauses of the employment contract. Employees rejecting the agreement would be laid off for a “sui generis” reason (neither economic nor personal) that would amount to a real and serious cause and the employer would supply their “training personal account” (« compte personnel de formation »).

Lastly, in companies with up to 20 employees not having staff elected representative, the employer could propose a draft agreement directly to employees. The agreement subject to consultation could relate to all the topics open to collective bargaining. The agreement would be approved only after being ratified by a two-thirds majority of the staff. In larger companies without trade union representative, the negotiation would be possible only with an empowered employee or a member of the staff delegation.

Combining staff representative bodies

In companies with at least 11 employees, it would be mandatory to set up a social and economic committee (“comité social et économique” (CSE)).

In companies having between 11 and 49 employees, the committee would take on duties in relation to staff delegation (délégation du personnel (DP)).

In companies with at least 50 employees, the CSE would combine the current duties of DP, works council, and the Health and Safety Committee (CHSCT). The committee would thus have the legal personality currently endowed to the Works council and thus the ability to bring court actions.

In companies with at least 300 employees, a “central commission on health, safety and working” (“commission de santé, sécurité et des conditions de travail centrale - CSE”) should be set up and, at the labour inspectorate’s request, in those whose activities at risk justify it (Seveso, nuclear power, etc.). The CSE could always call on expertise, but should then pay for their costs up to 20% (unless, in particular, in case of job-savings plan (PSE) or serious risk, where the employer would pay for them up to 100%). Also, a majority agreement could provide for combining the staff representative bodies, including trade union representatives. In such a case, the body called “conseil d’entreprise” would retain responsibility in relation to collective bargaining. Also, the majority agreement would define the topics for which decisions should be subject to the conseil d’entreprise’s assent, in addition to professional equal treatment and the training program.

Simplified implementation of redundancies

The economic grounds (economic difficulties, technological change, safeguarding competitiveness) of a redundancy would no longer be assessed at the international level, unless in case of a fraud. In that respect, judges would assess the real difficulties encountered by a company belonging to a group at the level of the group companies belonging to the same business segment and located on the national territory.

The redeployment obligation would also be simplified. Employers should still inform the employees concerned of the redeployment offers but they would no longer be required, in particular, to send relevant offers to each of them in writing. They could thus communicate all available jobs to the employees via a list through any means, for example by making it available on the intranet.

Definition of a compensation scale for dismissal without a real and serious cause

The draft executive orders sets a scale of damages allocated by the judge in case of dismissal without a real and serious cause (see below). The scale would be set aside in cases falling within discrimination, harassment or undermining fundamental freedoms. The scale would be mandatory in any other situation and would therefore be binding on labour court judges. This scale would set a maximum compensation from one month of salary for less than a year of service to 20 months of salary from the 29th year of service. The scale also sets a minimum amount from half a month to three months of salary based on the length of service, but also depending on whether the company has less than 11 employees or not.

Softening of dismissal rules

An employer could complement the reason for a dismissal after the latter is notified, either on its own initiative, or at the employee’s request. If the employee has not requested anything, insufficient justification would amount to irregularity that would no longer systematically deprive the dismissal of a real and serious cause and would entitle to a mere compensation of a maximum of one month of salary. For example, an employer could no longer be sentenced for having forgotten to mention in the dismissal letter that the position was eliminated, although this elimination is real and results from real economic difficulties.

Furthermore, formal irregularity committed during the procedure, in particular in relation to the preliminary meeting, would no longer deprive the dismissal of a real and serious cause and would entitle to compensation of a maximum of one month of salary.

Securing the termination of employment contracts

Other rules in relation to the termination of employment contracts are secured:

  • In order to avoid procedural errors, a standard form mentioning the rights and obligations of each party would be defined in a decree.
  • The time-period left to employees to challenge a dismissal would be aligned. It would be set at 12 months both for redundancy (no change), and for dismissals on personal ground (currently 2 years).
  • A procedure referred to as “rupture conventionnelle collective” would be set up. The objective would be to draw up voluntary departure plans pursuant to a collective agreement and to have them approved by the administration to secure terminations that would result from their implementation.
  • The conditions for awarding statutory severance pay would be amended. In fact, severance pay would be awarded to employees as soon as they have completed eight months of service instead of one year. Also, the amount of this severance pay should be increased by 25% by way of regulation.

Simplification of the work hardship prevention account

All the provisions relating to the work hardship prevention personal account (compte personnel de prévention de la pénibilité) would be rewritten, but the mechanism would be preserved and renamed “compte professionnel de prevention”. The rules relating to the six criteria currently applied would be maintained overall: night work, repetitive work, alternating shift or work in hyperbaric conditions, as well as noise and extreme temperatures.

On the other hand, the requirements of employer’s declaration would be eliminated regarding the other four hardship factors, i.e.: handling heavy loads, painful positions, mechanical vibrations and chemical risks. Employees exposed to such risks should however benefit from early retirement in case a vocational disease and a permanent inability rate exceeding 10% without any condition as to the duration of exposure are acknowledged.

Implementation

Article 38 of the Constitution provides that “executive orders shall be issued in the Council of Ministers, after consultation with the “Conseil d'État”. They shall come into force upon publication, but shall lapse in the event of failure to submit to Parliament the Bill aimed to ratify them by the date set by the Enabling Act (loi d'habilitation)”.

It is thus expected that the executive orders apply as soon as they are published. Although the lapsing assumption should only apply in the absence of bill ratifying the executive orders, this remains quite theoretical.

However, once the executive orders are published, all the measures will not immediately come into force. The executive orders include specific provisions, the main ones being:

Measures Effective date
Measure relating to the place of collective bargaining (combination between industry-wide agreements and company agreements, contents of regular consultations, negotiation of collective agreements, etc.) As soon as the decrees implementing the executive order are published and on 1st January 2018 at the latest
Measures relating to Social and Economic Council (Conseil Social et Économique) and Company Council (Conseil d’Entreprise) (overhaul of staff representative bodies)

As soon as the implementing decrees are published and on 1st January 2018 at the latest

The terms of office still ongoing on such date will remain in force until they are renewed and until 31 December 2019, at the latest

The terms of office expiring before the effective date may be extended for one year upon decision of the employer after consultation with the staff representative bodies.

Mandatory compensation grid in case of dismissal without a real and serious cause Applicable to dismissals notified after the publication of the executive order
Statute of limitation of the action for challenging a dismissalLowering to 8 months the seniority required to receive severance pay Applicable to ongoing statute of limitation as of the date of enactment of the executive order
Lowering to 8 months the seniority required to receive severance pay As of the date of publication of the decrees implementing the executive order and on 1st January 2018 at the latest
Scope of assessment of the economic grounds for redundancySimplified redeployment requirement for redundancy Applicable to redundancy procedures initiated after the publication of the executive order
Simplified redeployment requirement for redundancy As of the date of publication of the decrees implementing the executive order and on 1st January 2018 at the latest
Provisions on fixed-term employment contracts and temporary work Applicable to employment contracts signed after the publication of the executive order

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