N E W S L E T T E R
LABOUR LAW REFORM IN FRANCE
The law on employment, the modernization ofthe social dialogue and the safeguard of career paths („loi relative au travail, à la modernisation du dialogue social et à la sécurisation des parcours professionnels“),named El Khomri Law after the French Labour Minister, was ultimately adopted into law on 21 July 2016 and published in the Official Journal on 8August 2016, after a long public debate and a wave of protests.
According to the French government, the labour law reform was made necessary in a context of high unemployment to fight against inequalities and to increase the competitiveness of the economy.
Primarily, the law aims at easing the current provisions in the fields of working time schedules bygivinga priority to collective agreements on company level, whereas the 35-hours-week is still the legal working time in France.
Hereinafter we refer in excerpts to the important points which may be relevant in the exercise of your company’s activity in France. The different application decrees will be published in the following months.
New articulation of norms
Henceforth, the French Labour Code clearly distinguishes between mandatory public order provisions(„ordre public“), provisions that fall in the scope of collective bargaining („négociation collective“) and default provisions which apply when there is no collective agreement („règles supplétives“).
Furthermore, the law abandons the principles that were common place until nowto make company agreements the new norm: starting 1st of January 2017, agreements between the employer and its staff members on a company-level shall prevail over legal rules and branch agreements, in particular in matters of working time schedules and overtime payment.
Company agreements are concluded with the trade unionsprovided that the latter represent at least 50% of the company staff. Failing that, they must be approved by a majority of the staff members.
If not stipulated otherwise, such company agreements are valid for a 5 years’ period- and not for an indefinite period as in the past – with the possibility to define a longer or a shorter period. Upon expiration of this deadline, the agreement becomesinvalid.
Nevertheless, a company agreement may not derogate from a branch agreement as regards hardship („Pénibilité“) and professional equality(„égalité professionnelle“).
Working time
The regular working timeis still defined as 35 hours a week. A company agreement may under certain circumstances (increasein activity, company organization) raise the working time to an average46hours a week for a period of twelve weeksin a row and the daily working time up to a limit of 12 hours.
Overtime payment
(Except for “forfait jour”, see below)
Every hour performed beyond 35 hours a week is considered as overtime and has to be paid at an extra rate.
This rate continues to be set at 25% for the first 8 hours of overtime and 50% for each further hour beyond, even though this rate can be set at another percentage by a branch agreement in complying with a guaranteed minimum rate of 10%.
Henceforth, the companies may negotiate by way of a company agreement which extra rate they apply in compliance with a minimum rate of 10% of the usual wage rate.Such company agreement hence prevails over the branch agreement. Failing a collective agreement, the legally defined percentage is applicable.
Annual working days system („Forfait Jour“)
The law contains new guarantees to secure the annual working days system andthe provisions have to be clearly set forth in the relevant agreement (company agreement, collective bargaining agreement or individual agreement) :
- The right to disconnect from remote communication tools
- Evaluation and regular monitoring of the workload
- Exchange on a regular basis between the employer and the employee on workload, work-life balance, remuneration and the working organization in the company.
Dismissal on economic grounds
The economic grounds justifying a dismissal aredefined more precisely and are valid as of 1st of December 2016. It is clearly stated that the material grounds for thejob abolishment isevaluated on the company level.
Moreover, clear definitions referring to the economic difficulties depending on the company’s size shall guarantee more legal certainty.
For instance, a dismissal on economic grounds is henceforth valid for a decline in orders or in turnover – in comparison with the same period of the preceding year - for the following durations:
inacompany with up to 10 employees : at least 1 quarter
ina company with 11 up to 49 employees:2 quarters in a row
in a company with 50 up to 299 employees:3 quarters in a row
in a company withover 300 employees:4 quarters in a row
It should be noted that the economic difficulties upon which relies the dismissal on economic grounds ultimately continue to be evaluated on the group-level or the group’sbusiness activity worldwide. The initial bill provided for a limited review referring to the business activity for the group’s companies operating in France which was abandoned due to the persisting tensions.
Furthermore, two other economic grounds which were already considered by case law finally entered into the Law: the preservation of the company’s competitiveness and the shutdown of the company’s activity.
Simplification of the procedure for dismissals on the grounds of ill health
With a view to evidencing the employee’s inability to perform his/her work, only one medical exam carried out by the occupational physician will be necessary.
The applicable conditions for the dismissal procedure on the grounds of occupational or non-occupational ill health have been aligned.
Furthermore, the law modified the scope of the redeployment obligations the employer has to comply with.
Tightening of the rules pertaining to the secondment of employees
Henceforth, the main contractor who delegates work to a service provider with registered offices in a foreign country seconding employees to France has to abide by stricter supervisory obligations.
The main contractor must not only make sure that the service provider complied with all the prior declarations while seconding employees, but also the first and all further rank subcontractors as well as the temporary employment agencies who work for the subcontractors.
In addition, henceforth, an employer with registered offices in a foreign country seconding employees to France has to pay a lump sum guarantee destined to cover the costs of such secondment.
Severance payment in case of a proceeding before the employment tribunal
Finally the government also renounced to introduce a cap on compensation in caseof dismissal without real and serious cause.
The first bill set up a chart with limit values that even in a less coercive manner, only for information purposes destined to the judges, was abandoned.
Thus, the amount of such compensation depending on the circumstances continues to be at the entire discretion of the judges.
Other provisions
- Right of the employees, mainly those teleworking or employed under the annual working days system (see above) to disconnect beyond their official working hours.
- Upon hiring, the medical exam isno longer mandatory and remains only valid for employees exposed to specific risks at the workplace : this exam is instead replaced by a visit for information and prevention purposes and may be held for instance by a nurse.
- Night workers are given a specific status and special medical preventive measures.Working hours from 9pm to 7 am are considered as night shift, compared to 6 am until now.
- Creation of an individual activity’s account (“compte personnel d’activité”) as of 1 January 2017.
- Reinforcement of the protection against dismissal of parents:the mother is henceforth entitled to 10 weeks’ protection againstdismissal(previously 4 weeks) beginning with her return in the company, while her partner may also benefit from10 weeks’ protection against dismissal following the child’s birth.
- The employer is given the possibility to remit the payslip by electronic way. However, the employee has a right to object and claim the payslip in paper form.
- The company rules may now set up a neutrality principle towards religion and thus limit the expression of religious conviction of their employees, provided that these limitations are justified on grounds of the exercise of other freedoms and basic rights or are necessary to the smooth functioning of the company’s business.
- Granting of a specific holiday for natural disasters (up to max. 20 days) and for the acquiring of the French nationality (0,5 day).
- Increased number of special leave for family reasons.
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We remain at your disposal for any interrogation you may have and to implement the labour law reform on a tailor-made basis to your company’s needs.
Best regards
Monika Seidel-Moreau
Partner
01 57 57 57 22
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