France: New Labor Law finally published

Regions & Countries France
Areas of Law Employment
Content Types Latest
Languages English
Employment Areas of Law Labor reforms

Overview

After months of conflicts, political confrontations, parliamentary ping-pong discussions, the controversial use of Article 49-3 of the French Constitution on three occasions, which allows the Government to bypass the Parliament, the Law relating to employment, improvement of the social dialogue and the safeguard of career paths, referred to as Labour Law, n° 2016-1088 adopted on 21 July 2016 and declared constitutional on 4 August, was finally promulgated on 8 August 2016.

 


Contents

The initial draft of the new law was promising in terms of liberalization of the French Employment law. However, the final version that was adopted brings some modifications that are far less ambitious.  The key points are summarized below:

WORKING TIME

Normal hierarchy - Primacy of company-wide collective agreements

Company or establishment-wide collective bargaining agreements (CBAs) take priority over branch level agreements, in so far as they relate to working time unless otherwise provided by law.

Securing lump-sum annual working time scheme ("forfait annuel")

The use of lump-sum annual working time scheme is still subject to the conclusion of a collective bargaining agreement. However, the content of the collective bargaining agreements that are entered into after the publication of this Law is more detailed with the introduction of the reference period and the conditions under which the leaves, arrivals and departures are taken into consideration for the calculation of the employees' remuneration within the said reference period. Besides, such agreements will also have to include the terms and conditions regarding the right to IT disconnection, the evaluation and the regular monitoring by the employer of the workload, and the terms and conditions under which the employer and the employee communicate on the workload, the work-life balance, his/her remuneration and work organization within the company.

In order to secure numerous agreements which found to be void following developments of recent French case law, as they did not include guarantees in terms of respect of maximum working hours and daily and weekly rest times, the new Law allows the employer to validly conclude an individual lump-sum annual working time agreement (or to secure pre-existing ones), contingent upon the establishment of a control document listing the number and the dates of worked days, the guarantee that the workload is compliant with the daily and weekly rest times and the organization of  an annual interview with the employee.

Overtime hours

Overtime increased hourly rates can be set in priority through company-wide collective bargaining agreements or, in the absence of such, through branch-wide collective bargaining agreements. The overtime increased rate may not, however, be below of 10%. In the absence of such agreement, the legal overtime increased rate shall apply.

Maternity

Employees are now entitled to a protection of 10 weeks after the end of their maternity leave compared to 4 weeks previously.

Holidays paid leave

Holidays paid leave can now be taken as from the start of the employment.. The duration of such paid leave may be extended through trade unions negotiations with regard to the age, seniority or handicap of the employee. Such social negotiations also determine the leave period and its schedule, as well as the modalities of split and carry over of the holidays leave.

 

COLLECTIVE NEGOTIATIONS

Negotiation, content and duration of collective agreements

The Law aims to generalize the negotiation of framework collective agreements (‟accord de méthode”). Besides, all collective bargaining agreements shall include a recital presenting its goals and content, defining its conditions of compliance checks and including deadline clauses. As a principle, CBAs are now henceforth concluded for a 5-year period upon the end of which they shall expire (unless otherwise provided in the agreement or in case of agreement concluded for an indefinite time period).

Right to disconnect

The law also implements various measures regarding the employee's right to disconnect from workplace technology when not at work. This topic must be covered within the company's mandatory annual negotiations with union representatives on professional equality between men and women and working life quality. Within the framework of this annual negotiations, the discussions should also cover the modality of use by the employees of their right to disconnect, the implementation of regulation process of the use of digital tools, aiming at ensuring the compliance with the resting times and leaves as well as the work-life balance. In the absence of such collective bargaining  agreement, the terms and conditions regarding the right to disconnect must be defined by the employer within an IT policy which should be prepared. This policy shall include the conditions of implementation of trainings and awareness in relation to the reasonable use of digital tools.

The lump-sum annual working time agreements must also contain provisions in relation to the right to disconnect.

Principle of the majority collective bargaining agreements and the validity of derogatory agreements

To be valid, collective bargaining agreements must be executed by one or several trade unions who are representative within the company (i.e. having solely or collectively more than 50% of the ballots cast at the first round of the last professional elections). The non-majority collective agreement (i.e. those signed with representative trade unions having at least 30% of the ballots cast at the last professional elections) can be validated through a referendum.

Collective bargaining agreements signed with employee representatives (staff delegates or works council), in the absence of representative trade union delegate, are simply communicated for information only to the branch-wide joint commission and must no longer be approved by this commission.

Revision of collective bargaining agreements

The rules regarding the revision of collective bargaining agreements are modified at all levels (interprofessional, branch-wide, company-wide, establishment-wide) to facilitate their revision while maintaining a strict legal framework.

Termination of collective bargaining agreements

If all the signatory parties to a collective bargaining agreement requet its denunciation, the negotiation of a substitute agreement is launched, at the request of either of the concerned parties, within a 3-month period following the beginning of the notice period preceding its denunciation.

In case of  denunciation or if the collective agreement is called into question  (e.g. following a merger, a sale, etc.), the notion of ‟maintaining of individual acquired rights” ("maintien des avantages individuels acquis") is replaced by that of ‟maintaining of paid elements of remuneration” ("maintien de la rémuneration perçue") solely.

 

EMPLOYEE REPRESENTATION

Three new consultations subject to a deadline

The following consultations are now subject to a deadline set forth by a collective bargaining agreement or if not by a decree :

  • consultation prior to the replacement of all or part of the payment of overtime hours by compensatory rest time in companies without representative trade union delegate;
  • consultation prior to the adaptation of terms and conditions for the grant and use of such rest time, in the absence of any other agreement on this subject; and
  • annual consultation, in companies without an agreed overtime ceiling quota, on the terms and conditions for using the legal or branch-wide overtime quota ceiling and possible overuse of overtime work above this ceiling quota.

Social dialogue in franchise networks

A joint social dialogue committee is created in franchise networks which employ at least 300 employees in France, providing two conditions are met:

(i) some of the franchise agreement's stipulations affect work organization and working conditions of franchisees' employees and;

(ii) at branch or network level, union representatives have required the implementation of such committee. Its rules of procedure are determined by collective agreement or, failing that, by decree (yet to be published).

On 4 August 2016, the French Constitutional Council who has validated the principle of such franchise network has declared part of Article 64 relating to this joint committee null and void. The Constitutional Council has considered that in the absence of an agreement, its operating expenses must not be borne by the franchisor alone. The Council also expressed two reservations about this Article: franchised companies must participate to the negotiation of the agreement, and franchisees' employees will not get extra time quota to participate in the committee in the absence of an agreement.

 

ECONOMIC DISMISSAL

Definition of the economic dismissal

The economic dismissal is defined as a dismissal occurring on the employer's initiative for one or more reasons not related to the concerned individual worker, arising from a job cut or transformation or from a modification of an essential part of the employment contract that is refused by the employee(s), due to the following reasons: economic difficulties, technological changes, but also in order to safeguard the company's competitiveness or in case of business closure (the latter two being already allowed by French case-law).

The materiality of the job cut or transformation or of the modification of an essential part of the employment contract is appreciated at the company level (open to interpretation). Although the initial draft law provided that the appreciation of economic difficulties was limited to the national territory, this provision was not retained in the final version of the law.

Economic difficulties could include a decline in sales revenue or orders, or by operating losses or a drop in cash flow or in gross operating profit. A decline in sales revenue or orders must last for several consecutive quarters, depending on the company's size.

Securing dismissals before a business transfer

In case of economic dismissals resulting in the implementation of a social plan ("PSE"), companies employing at least 1,000 employees or belonging to a group of at least 1,000 employees can dismiss employees before the business transfer, provided that:

(i) the social plan organises the transfer of one or more economic entities necessary to preserve some of the jobs, so as to avoid the closure of one or more plants; 

(ii) the company wishes to accept a takeover bid as part of its obligation to find a buyer.

 

EMPLOYEES' HEALTH AT WORK

The former pre-recruitment medical examination is replaced by an information and prevention examination, after which the employee is provided a certificate. Biennial medical examinations are also suppressed: henceforth, terms and frequency of the examination are determined individually, regarding working and medical conditions, age and occupational risks.

Other new dispositions of this Law should also be pointed out, such as those reinforcing the control of posting of workers, the implementation of the new Personal Activity Account ("Compte Personnel d'Activité"), the reinforcement of the role of branches of activity, the mechanisms put in place to secure collective agreements executed at different levels, the modification of trade union representatives' delegation time, the simplification of the dematerialization of payslips, or the adjustments in respect of the operating modalities of  employees' representative bodies.

For further information,  please contact Philippe Danesi, Bijan EghbalMarine Gicquel or Jerome Halphen.

 

Contact Information
Philippe Danesi
Partner at DLA Piper
Paris
+33 1 40152423
philippe.danesi@dlapiper.com

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