12/09/2017

French President, Emmanuel Macron, determined to fulfill one of his corner-stone presidential run-up pledge, is currently seeking to reform the French labor code by fast-tracking the legislative process with the use of orders (“ordonnances”) issued by the French government.

The proposed reform would provide greater HR/employment flexibility to the employers.

5 draft orders will be presented to the Council of Ministers shortly and are therefore subject to further amendment.

We will keep you informed of the most salient elements of the Reform as it goes through the legislative process.

In the meantime, below are 3 key areas which may be of interest to you and your group’s operations in France from an HR perspective :

  1. Redundancy limits softened including collective redundancy plans :
    • End of the extraterritoriality definition of economic dismissal
      Current rules After the reform
      The economic grounds (for example, economic difficulties/technological changes/reorganization required to safeguard competitiveness) is assessed at the group’s business sector level, in France AND abroad. The economic grounds will no longer be assessed at the international group outside and within France but only taking into account the group’s activities  located within France.
    • End of the redeployment offers abroad
      Current rules After the reform
      Before the sending of a redundancy letter, whether for individual or collective dismissals, the employer must seek redeployment possibilities within the group within companies located in France and abroad. In the latter scenario, this obligation is triggered only when the employee has formally asked to receive redeployment offers abroad. The employer will no longer have to offer redeployment opportunities within the group’s businesses located outside of France..
    • Statute of limitation period reduced to 1 year in all scenarios
      Current rules After the reform
      The limitation period for challenging a dismissal before the Industrial Tribunal is :

      • 1 or 2 year(s) : economic dismissal;
      • 2 years : dismissal for poor performance or disciplinary dismissal.
      The limitation period will be 1 year in all dismissal scenarios.
  2. A fixed damage scale for unfair dismissal before the industrial tribunal
    Current rules After the reform
    For employees having less than 2 years of seniority and/or working in companies with less than 11 employees, damage amounts awarded for unfair dismissal are freely fixed by the judge.

    For employees having more than 2 years of seniority in companies with at least 11 employees, the damages for unfair dismissal are 6 month minimum.

    BUT: In each of these scenarios, there is no maximum award amount, which leads to uncertainty and unpredictable financial and timing risks for the employer.

    A scale will be applicable and compulsory for the Industrial Tribunal (except for cases of  harassment/discrimination/violation of a constitutional right) :

    Seniority (full year of service) Damages (monthly gross salary)
    Minimum Maximum
    0 N/A 1
    1 1 2
    2 3 in all cases 3
    3 4
    4 5
    5 6
    6 7
    7 8
    8
    9 9
    10 10
    11 10.5
    12 11
    13 11.5
    14 12
    15 13
    16 13.5
    17 14
    18 14.5
    19 15
    20 15.5
    21 16
    22 16.5
    23 17
    24 17.5
    25 118
    26 18.5
    27 19
    28 19.5
    29 20
    30 and beyond
  3. Merger of the employee representative bodies
    Current rules After the reform
    Today, a company operating in France will generally have 1 employee representative body (employee delegates: for companies having between 11 and 49 employees) or employee delegates and a works council for companies with at least 50 employees.

    A health and safety committee also exists for companies with 50 employees or more.

    A single employee representative body housing the representative body and the health and safety function : social and economic council (“Comité social et économique”).

    This mesure is likely to :

    • facilitate the employer/employee dialogue
    • reduce the number of protected employees (those employees who “represent” the employee workforce on one or more of these committees)
    • reduce the number of hours spent by the employer at meetings between representative body members and management.

    At a minimum, this measure would ease the functioning of the organization as the employer will have a single body to communicate with on all issues of employee relations, including health & safety.