France: Social Reforms Announced By Emmanuel Macron's Government

 A bill aimed at enabling the government to legislate on many areas of labour and employment law (and tax matters) through government ordinances—as opposed to the longer process before French Parliament—has been adopted by the Parliament in early August, approved by the French Constitutional Court in early September, and will be shortly enacted mid-September. The bill provides several key areas for the adoption of ordinances by the government.

The government has issued these ordinances, and they are likely to be adopted around the end of September. These ordinances will bring various changes to labour and employment regulations in France, mostly intended to provide flexibility and to simplify and rationalize those regulations. Among the key areas concerned will be the following:

Articulation Between Company-Wide and Sector-Wide Collective Bargaining Agreements. This subject is key since it is aimed at giving some flexibility to employers and enabling them to negotiate at the company level in areas which are usually established at the sector level. The government proposes to: (i) define the areas in which company-wide collective bargaining agreements may not override the provisions of sector-wide collective bargaining agreements; (ii) define the areas and conditions under which sector-wide collective bargaining agreements could expressly prohibit amendment by company-wide collective bargaining agreement; and (iii) recognize in other areas the primacy of company-wide collective bargaining agreements.

Simplification of Employee Representative Bodies. The merger of the employee representative bodies at the level of each company (i.e. Staff Delegates, Works Councils and Health and Safety Committees) into a single body (the "Economic and Social Council") is also a key subject. In this context, the draft ordinances define, notably: (i) the conditions for setting up, the headcount thresholds to take into account, the composition, the powers and the functioning of this body, including the information and consultation timeframes, the training, means and processes, the maximum number of successive elective mandates of its members, and the conditions to have recourse to an expert; and (ii) the conditions under which a specific Health and Safety Commission could be added to this body.

Termination of Employment. The scope of assessment for the economic justification of dismissals for economic reasons would be restricted to the national territory even when the company belongs to an international group, except in case of fraud. Currently it extends to all entities worldwide belonging to the business sector of the group in question. The draft ordinances provide for an indemnification scale where dismissals are held to be abusive by a court. This scale will be based on the employee's seniority and the size of the company (e.g. the minimum indemnification for employees with at least two years of seniority would be equal to: (i) three months of gross salary in companies with at least 11 employees; and (ii) between 0.5 and 2.5 months of gross salary in companies with less than 11 employees up to 10 years of seniority and equal to three months of gross salary after 11 years of seniority—compared with the six months' gross salary currently applicable for any company, whatever its workforce. Further, the maximum indemnification would be of 20 months' gross of salary for employees with at least 29 years of service).

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.

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Authors
Mariëlle Daudt
 
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