Article by Philippe Desprès and Erica Cadieux

Philippe Desprès and Erica Cadieux of Gide Loyrette Nouel explain the challenges for UK employers and multinationals attempting to implement their company policies in France

The implementation of global company policies in France has proven to be challenging for many multinational employers. This can largely be attributed to the fact that French labour law is composed of a highly structured body of rules and regulations which precisely define the employment relationship. In essence, the legal framework governing employment relationships in France is quite different from that generally encountered in common law jurisdictions, such as in the UK or US.

Employers in common law jurisdictions have more flexibility in establishing their corporate philosophies and tailoring the employment relationship through company policies and guidelines. A French employer’s ability to regulate the employment relationship through unilateral company policies is more limited. Not only are company policies a highly regulated matter in France, but employers must ensure that they are applied in compliance with numerous legal and contractual instruments.

Given the trend towards the internationalisation of companies, multinational employers are increasingly doing business in France. In principle, these employers are legally bound to modify their company policies to comply with relevant French laws. However, regardless of this principle, many continue to apply their policies and guidelines to their French counterparts without considering the requirements of French law. As a result, these employers not only run the risk of having their company policies declared null and void, but also of being found liable for damages.

Internal regulations

It is not simple for an employer in France to regulate employee rights and working conditions unilaterally by means of company policies. This is not to say that company policies do not have their place in the French workplace. However, their scope is limited by the requirement, under French law, that all companies with over 20 employees issue internal regulations (règlement intérieur). Failure to do so constitutes a criminal offence punishable by a €750 fine on the legal representative of the company. Internal regulations govern specific aspects of the employment relationship and are considered an additional source of law. For this reason, the French Labour Code requires internal regulations to be drafted in French.

The works council (in companies with at least 50 employees) or the staff delegates (in companies with under 50 employees) must be informed and consulted on the drafting of the internal regulations. However, the employer is not bound by their opinion.

In addition, the provisions of the internal regulations dealing with health and safety matters must be submitted to the health, safety and working conditions committee (CHSCT). In the same manner as the works council, the CHSCT shares its opinion with the employer on the provisions, but again its opinion is not binding on the employer. The CHSCT is not consulted where the company in question has fewer than 50 employees. In this case, the employer’s consultation obligation is limited to the company’s staff delegates.

Subsequently, the internal regulations must be notified to the local labour authorities (inspection du travail). They may require that the internal regulations be withdrawn or amended, if they do not comply with French employment law.

Finally, the employer must fulfil certain publication formalities. These include displaying the company policies in the workplace, and filing them with the local clerk’s office of the employment tribunal.

The scope of internal regulations is regulated by the French Labour Code. Article L 122-34 enumerates the matters which must be covered by internal regulations, namely:

  • health and safety;
  • disciplinary procedures and employee rights;
  • sexual harassment; and
  • bullying at work.

By virtue of Article L 122-34, all matters falling within these areas must be dealt with in the company’s internal regulations. If they are covered in a separate corporate document, the French courts consider that it represents an exhibit to the company’s internal regulations. Its validity and enforceability, therefore, depend on whether it was implemented in accordance with the procedural formalities which apply to internal regulations.

Contracts and agreements

Under French law, certain terms of employment must be set forth only in the employment contract or in a collective bargaining agreement (entered into at company or at industry level). They cannot be included in the company’s internal regulations. These terms include:

  • the duration of the probationary period;
  • the duration of the notice period;
  • compensation; and
  • working time, working hours and paid holiday.

Many multinational employers will find this problematic, because their policies are typically drafted in general terms and tend to cover wide-ranging matters.

A common example of this problem is multinational employers’ tendency to include non-compete policies in their company handbook. In France, it is imperative that this matter is covered in either the employment contract or collective bargaining agreement. A non-compete clause illegally inserted into a company policy will, therefore, be deemed null and void – even if the policy was communicated to the employee. This is unless the policy was signed by the employee and can qualify as an amendment to their employment contract.

Finally, when transposing their company policies in France, foreign employers should bear in mind that employee rights may only be restricted in a fair and proportionate manner.

Employee Monitoring Practices

One area which raises particular concern for many multinational employers with businesses in France relates to the applicability of company policies dealing with e-mail networks and employee monitoring practices. Recent French employment law trends relating to e-mail networks have had a significant impact on the implementation of foreign company policies.

A French Supreme Court decision of 2 October 2001 essentially establishes a pro-privacy bias in favour of employees. The case re-affirms the guidelines published on 28 March 2001 by the French National Data Processing and Liberties Commission (CNIL). The Commission was created in 1978 to regulate the use of personal data and data processing systems.

Pursuant to CNIL guidelines and French case law, it is a recognised principle that an employer may monitor the volume of employee e-mail exchanges. This is provided that it informs its employees of the monitoring and the manner in which this is being carried out. The Supreme Court specifies, in addition, that although the volume of exchanges may be monitored, employers are prohibited from reading the actual content of employees’ e-mail messages. It is essential that multinational employers reevaluate their current company policies on monitoring practices to ensure that they comply with this decision.

Procedural formalities

Once the employer has reviewed and re-drafted its company policies in accordance with the legal principles, the validity of these policies will depend on its compliance with various mandatory procedural formalities provided for by the French Labour Code. These regulate the manner in which the employer must enforce its company policies.

Firstly, pursuant to Article L 121-1 of the Labour Code, any provisions of an employment contract (or any contractual document) drafted in a foreign language are ineffective if they cause the employee prejudice. Pursuant to Article L 122-39-1 of the Labour Code, every document that imposes obligations on the employee, or requires him to have knowledge of it in order to perform his employment contract, must be drafted in French.

Company policies must, therefore, be translated into French. Non-compliance with this requirement will probably result in the policies being unenforceable. Any disciplinary action taken by the employer against an employee for breaching a company policy drafted in a foreign language would most likely be deemed unfair by French courts.

Secondly, pursuant to French law, the employer must consult the works council on all matters relating to working conditions or employee relations within the company. By their nature, company policies frequently address issues that fall within the works council’s prerogatives.

Therefore, before they transpose their company policies, employers will often need to inform and consult the local works council. The works council’s opinion is not binding on the employer, but failure to consult is a criminal offence known as a délit d’entrave. This is punished by up to one year’s imprisonment and/or a maximum fine of €3,750. For repeated offences, the penalties are a maximum of two years’ imprisonment and/or a maximum fine of €7,500.

In addition, a staff representative body may take civil action to claim for damages for any loss incurred as a result of non-compliance with French law.

A duty to adapt

It is a recognised principle that multinational employers have a duty to adapt their company policies and procedures to fit the jurisdiction they find themselves in. Depending on the legal environment in question, this duty can become quite complex.

Multinational employers must contend with a highly regulated system in France when it comes to employment law matters, and comply with both substantive rules and procedural formalities. Consequently, they must evaluate and review their company policies in accordance with these domestic employment law requirements prior to transposing them.

Philippe Desprès is a Partner (with effect from 1 January 2004) and Erica Cadieux an associate at Gide Loyrette Nouel, Paris.

Article initially published in Legal Business (June 2003).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.