The long-awaited reform of French employment law is now on track. The French government (the "Government") presented five draft ordinances outlining the different topics and related modifications that should be formally ratified by the end of September 2017.
The Government shall reinforce the possibility for companies to negotiate company-wide collective agreements that prevail over those of branch/professional collective agreements. For that purpose, the Government shall strictly define the areas of law concerned. Public order rules shall continue to be excluded (e.g. minimum wage, classification, funding of social benefits, rules applicable to part-time, fixed-term and temporary work).
In companies employing less than 11 employees, employers could submit draft collective agreements for the employees' prior approval (through a referendum requiring the majority of at least 2/3rds of the votes). In companies employing at least 11 but less than 50 employees, collective agreements could be negotiated with (i) the staff representatives or (ii) employees specifically empowered by trade unions, in which case the employees would have to approve the agreement through a referendum.
The statute of limitations for challenging the validity of collective agreements would be reduced to 2 months from its notification to trade unions (or from its publication to the employees). In the event a judge would rule null and void a collective agreement, he would have the power to adapt the consequences of his decision in order to avoid or mitigate adverse impact (e.g., deciding that the nullity would only apply in the future).
2.1 Creation of a unique staff representative body: the Social and Economic Council
By end of 2019, in companies of at least 50 employees, the staff delegates, the works council and the health and safety committee would merge into one new representative body: the Social and Economic Council (the "SEC"). This would occur in each company at the time of the next professional election process (with the possibility to extend the current mandates by one additional year for companies whose next professional elections are supposed to take place before the end of 2018). Staff representatives could not be elected for more than 3 mandates.
In companies employing at least 11 employees (but less than 50 employees), the SEC would perform the duties of the staff delegates only.
2.2 The SEC could also become the Company Committee
A company-wide or a branch-wide collective agreement entered into with trade unions on a majority basis could provide for the merging of all staff representative bodies and trade-union delegates in to a Company Committee. The Company Committee would then have the power to negotiate collective agreements.
2.3 Facilitating the mandatory negotiations and consultations
A company-wide collective agreement could adapt the content and periodicity of the mandatory negotiations and consultations as well as the social and economic data base in order to take into consideration the specific situation of each company.
3.1 The capping of damages and increase of the legal severance pay
In case of litigation, damages that could be awarded to employees would be capped/reduced:
In consideration for the introduction of caps for damages, it is expected that the legal severance pay be increased by 25% for the first 10 years of service (e.g. 1.25 months' salary for an employee reaching 5 years of seniority instead of 1 months’ salary).
3.2 Simplifying the dismissal procedure
3.4 A new right to Remote work (or "Telecommuting")
Telecommuting should be organized at the level of the company through a collective agreement or in-house regulations. Occasional telecommuting would be facilitated and employees could benefit from a right to work from home. Although employers could always refuse such arrangement, they would need to provide their employees with a valid reason.
3.5 Fixed-term employment agreements
4.1 Inability at work
When an employee would be considered unable to come back to work by the occupational doctor, the territorial scope of the redeployment obligation to be implemented prior to any termination of the employment agreement would be limited to France and within the same limits as those defined for the prior redeployment obligation applicable in case of redundancies.
4.2 A new professional account for preventing professional risks
The "Personal account for the prevention of arduousness" would be replaced by the "Professional account for the prevention of risks." Companies would no longer have to declare all risks to which employees are exposed but only those related to an "aggressive physical environment or to certain work places." The two social security contributions that used to fund the former scheme would disappear but the new account would be managed and funded by the French social security through its branch for occupational accidents and diseases.
While some measures would be applicable immediately2, others would require an application decree. The table below summarizes the various deadlines to be taken into account per ordinance and/or per measure.
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1 The government has announced that a decree would be issued at a later stage to increase the legal severance indemnity, presumably by 25%.
2 By « immediately », we mean as from the publication of the ordinance in the French official journal
Marine Hamon, an associate at White & Case, assisted in the development of this publication.