France: Management Labour & Employment Review 2016
A Review of Labour & Employment Law in 2016, by Joël Grangé of Flichy Grangé Avocats
In recent years, François Hollande’s government has introduced a number of reforms to the law governing employment in France. The Secure Employment Law of 14 June 2013 sought to increase flexibility in the labour market via provisions on collective agreements, internal and external mobility and the collective redundancy procedure, in exchange for a number of individual and collective labour rights.
Following this, the Florange Law of 29 March 2014 introduced provisions whereby large companies facing site closure must actively search for a purchaser before implementing a redundancy plan. In addition, the Hamon Law of 31 July 2014 provided that, where a small company is to be sold, its workforce must be informed so as to allow employees to put forward an offer.
In 2015, the French government under Hollande made further changes to labour law, with a view to encouraging economic growth and strengthening competition in France, through – among other measures – attracting foreign businesses. These changes primarily consist of modifications to the French Labour Code through the Macron Law and the Rebsamen Law. In addition, further amendments are likely to be introduced later in 2016 through the El Khomri Law. The main provisions of the Macron Law and the Rebsamen Law are explained below, followed by a discussion of the draft El Khomri Law.
The Macron Law on growth, activity and equal economic opportunities was passed on 6 August 2015, having been approved in large part by the Constitutional Council on 5 August 2015. The only draft provisions pertaining to labour law that were invalidated by the Constitutional Council related to compensation for unfair dismissal, which was to be limited to predetermined maximum amounts based on the company’s size. The Constitutional Council held this approach to be contrary to the principle of equality before the law.
The Macron Law, as published in the Official Journal on 7 August 2015, includes a number of key provisions regulating working time, collective redundancies and proceedings before the labour courts.
Sunday and evening work
The Macron Law has facilitated Sunday work in tourist and commercial zones, as determined by decree, allowing retailers in such areas to trade without requiring prior authorisation from the labour law administration. On the other hand, the employer must obtain employees’ approval through a collective agreement, which must provide measures to ensure the balance between professional and private life. Employees must remain free to choose whether to work on Sundays, and must be paid at least double the usual rate and be afforded compensatory rest equivalent to the time worked. The law also provides that, outside of these zones, retailers may be authorised to open for a maximum of 12 Sundays per year, as opposed to the five that were previously allowed.
The Macron Law has also expanded the possibility for evening work in international tourism zones, permitting retailers located in such areas to remain open until midnight without requiring the prior authorisation of the labour law administration. Yet, as for Sunday work, this is subject to a collective agreement with the employees. Furthermore, employees cannot be required to work nights; should they agree to do so, they must be paid at least double the regular rate. The employer must ensure that means of transport are in place to allow employees to return home safely after work, and must provide compensation for measures allowing employees to strike a balance between professional and private life, such as childcare.
The Macron Law has also introduced certain reforms with regard to collective redundancies. In implementing a redundancy plan, the employer must determine which employees will be affected through the application of “selection criteria”. These criteria are to be applied within each professional category concerned, namely among employees who have a similar position that requires similar training. Pursuant to the Macron Law, these criteria may now be applied at a level beneath that of the company as a whole, including without a collective agreement (which was previously required).
In addition, before making any employee redundant under such a plan, the employer is required to try to redeploy affected employees within the company, both in France and abroad, where applicable. However, the Macron Law has further simplified the process for redeployment abroad: the employer is only required to search for positions within the company abroad if the employee expressly requests it, specifying their requirements as to location and wages.
Proceedings before the labour courts
The Macron Law has also modified the procedure governing the labour court system, which is comprised of two stages: the conciliation bureau and the judgment bureau. By expanding the remit of the conciliation bureau, whose key role is to seek reconciliation between the parties prior to any hearing before the judgment bureau, the Macron Law seeks to reduce delays in proceedings before the judgment bureau. For example, where one of the parties fails to appear before the conciliation bureau, it is now empowered to deliver a judgment in its own right.
Furthermore, French labour court judges are not professional judges but, rather, employer and employee representatives elected by their peers. Under the Macron Law, these non-professional judges must now follow training modules: both an initial training programme organised by the state, and continuing professional education.
Finally, the Macron Law allows the possibility for one unilateral convocation of the Committee for Health, Safety and Working Conditions (CHSCT), as was previously the case for the works council, with a view to avoiding unnecessary litigation. It also contains provisions reforming the criminal offences applicable in cases where the works council has not been correctly consulted, simplifying the law governing employee saving schemes, and ensuring the tighter monitoring of supplementary pension schemes.
The Rebsamen Law on social dialogue was proposed by the former Minister for Labour, François Rebsamen. After having been approved almost in its entirety by the Constitutional Council, it was passed on 17 August 2015 and entered into force on 18 August 2015.
The Rebsamen Law seeks to streamline the functioning of the staff-representative bodies within companies, including by increasing dialogue between the social partners. It aims to do so in particular by: regrouping staff-representative bodies in larger companies; allowing for regional staff representation for smaller companies; and regulating the transfer of information between staff-representative bodies and management.
Unique staff delegation
The Rebsamen Law has reformed the unique staff delegation, which regroups staff-representative bodies. Previously, the possibility of assembling staff-representative bodies through this mechanism existed in companies ranging between 50 and 200 employees, and only concerned works councils and staff delegates. Now, it is possible to implement a unique staff delegation in companies with between 50 and 300 employees. Further, the CHSCT can now form an integral part of this unique staff delegation, alongside the works council and the staff representatives.
Regional staff representative bodies
The Rebsamen Law has created the possibility for small companies (namely, companies with under 11 employees) to have regional staff representation. These regional staff-representative bodies, called joint regional inter-professional commissions, will comprise 20 members of equal employer-and-employee representation. These commissions will: allow small companies to access advice on the applicable law and collective bargaining agreements (CBA); facilitate the resolution of employer-employee conflicts; and develop social and cultural activities for the benefit of the companies.
The CHSCT and works councils
The Rebsamen Law also regulates the general organisation of the CHSCT. In particular, echoing the reform of works council consultations introduced by the Secure Employment Law of 14 June 2013, the Rebsamen Law now requires deadlines to be imposed for the consultation of the CHSCT. The Rebsamen Law specifies that company agreements (or, failing union representatives, an agreement between the employer and the CHSCT) are to determine the deadlines within which the CHSCT must submit its opinion after consultation. These deadlines must afford the CHSCT sufficient time to properly consider the issue in question, namely a minimum of 15 days. Further, the CHSCT is now required to establish internal rules determining its modes of functioning.
The Rebsamen Law also introduces provisions reorganising the structure of mandatory negotiations; regrouping the information and consultation of the works council according to certain themes, thus ending the complexities that arose from the many issues subject to consultation; and affording new rights to staff representatives (including an individual interview at the beginning of their mandates and guarantees with regard to the evolution of their remuneration).
El Khomri Law (forthcoming)
In addition, under the new Labour Minister, Myriam El Khomri, a draft law proposes to further reform the law governing dismissals on economic grounds, following the Secure Employment Law of 2014 and the Macron Law of 2015. The draft law is due to be presented to the Council of Ministers on 24 March 2016, followed by debates within parliament and discussions with various stakeholders which will take place over the coming months. Indeed, the draft law has already been the subject of much debate, with several demonstrations giving rise to the modification of certain draft provisions: for instance, the proposed amounts for capping indemnities awarded by the labour courts should now only be indicative.
The project is currently under review by the Administrative Supreme Court and is currently being presented by the government.
Some of the key reforms to be introduced by the draft law include changes to the notion of dismissal on economic grounds; the purview of the business sector to be taken into account in analysing these economic grounds; the introduction of the right to disconnection; and the reaffirmation of certain protections concerning health and security at work.
Revising dismissal on economic grounds
The draft law proposes to redefine the notion of dismissal on economic grounds in a number of respects, conferring objective criteria on what was previously a fluid concept. It proposes to include two new grounds justifying redundancies, in addition to the pre-existing grounds of economic difficulties and technological changes. These new grounds, already established in case law, are the cessation of business activity and, where such measures are necessary, the safeguarding of the company’s competitiveness. In addition, the draft law seeks to introduce criteria for determining when the initial ground of economic difficulties can be considered to be fulfilled, namely:
- where there is a slowdown in orders or in turnover for a number of consecutive quarters, compared with the previous year;
- where there have been exploitation losses over a number of months;
- where there has been a serious degradation of cashflow; and
- any other element that may demonstrate economic difficulties.
In addition, the draft law proposes to significantly reduce the purview of the business sector to be taken into account in examining the above grounds. Whereas previously it was necessary to consider economic difficulties from a global perspective, under the El Khomri Law it would only be necessary to consider the situation within France. Such a change would considerably alter the situation currently faced by foreign businesses in France, while bringing France into line with the majority of other countries.
This provision is highly debated and should continue to evolve in the near future.
Right to disconnection
The draft law also seeks to introduce a new right to disconnection, namely with respect to the use of smartphones and other technological tools outside of working hours. The right to disconnection and its implementation would be included in the annual negotiations concerning the quality of life at work. Where such negotiations fail to give rise to an agreement, the employer would be required to determine measures for implementing this right. In companies with over 300 employees, such arrangements would need to be included in a charter, to be established after discussion with the staff representatives.
Health and security at work
Some of the employees most affected by the right to disconnection would be those subject to the forfait jours regime, namely fixed annual working time given in days. The draft law also includes provisions codifying recent case law from the Supreme Court with respect to the forfait jours regime: the employer is responsible for ensuring that employees under this regime have a reasonable workload, which respects the daily and weekly requirements for rest as imposed by law. Where the employer has fulfilled this obligation, such that the employee should not be required to work during times of rest, the employer cannot be held responsible for the employee working over the legal limits at their own initiative.
The draft law also proposes to introduce provisions governing redundancies in the context of business transfers, modifying the procedure whereby large employers are required to contribute to the revitalisation of the local market where the area concerned is particularly affected by the downsizing of the company, and extending working time in exceptional circumstances.
However, as already mentioned, it should be noted that this draft law is likely to be substantially modified over the coming months, in the course of discussions with various stakeholders and debates before both houses of parliament. As always, labour law in France remains a constantly changing terrain.