1 Legal framework
1.1 Are there statutory sources of labour and employment law?
French employment law is derived from many sources, but one of the major sources is the French Labour Code.
Other sources include decisions of the Labour Chamber of the Court of Cassation (the French Supreme Court), agreements concluded with works councils, customary practices and unilateral undertakings.
1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?
Employees are usually governed by an industry-wide collective bargaining agreement (CBA) applicable to the branch of activity to which their employer belongs. The CBA outlines many terms and conditions of employment, including the duration of probationary periods, working time limitations, classification, minimum wage requirements, termination indemnities and notice, as well as potential mandatory provisions such as annual bonus, welfare scheme (in case of death/disability/incapacity) and non-compete agreements.
1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?
Employment contracts are generally used at all levels. As a general rule, employment contracts are written. They must be drafted in the French language. Employment contracts must comply with mandatory statutory law and the applicable CBA. To a certain extent, and with some exceptions, the provisions of an employment contract may deviate from statutory law and the applicable CBA, provided that this is more favourable for the employee.
French employment contracts typically include the following provisions:
- status of employee;
- job title;
- job description;
- applicable CBA;
- place of work;
- probationary period;
- working time;
- paid vacation; and
- main benefits.
They may also include specific clauses, such as a mobility clause, exclusivity clause, post-termination non-compete covenant, termination indemnity clause, confidentiality clause, data privacy clause and invention/IT clause.
The use of fixed-term employment contracts is strictly limited by law. The employer must be able to justify the following:
- Fixed-term contracts are used only for the performance of a specific and temporary task;
- The use of fixed-term contracts does not have as its purpose or effect the permanent filling of a position relating to the usual and permanent activity of the company; and
- Fixed-term contracts are used only in specific cases set forth by law (eg, temporary increase in activity, replacement of absent employee).
Both fixed-term and part-time employment contracts must necessarily be in writing and contain strictly regulated clauses. In case of non-compliance, a fixed-term employment contract may be qualified as an indefinite-term contract and a part-time contract may be qualified as a full-time employment contract.
2 Employment rights and representations
2.1 What, if any, are the rights to parental leave, at either a national or local level?
Female employees are entitled to maternity leave and male employees are also entitled to paid leave after the birth of a child. All employees are entitled to adoption leave in case of adoption of a child.
Employees may additionally be entitled to parental leave.
Leave is governed by both the French Labour Code and applicable collective bargaining agreements (CBAs).
2.2 How long does it last and what benefits are given during this time?
As per the French Labour Code, an employee is entitled to 16 weeks of leave for the birth of her first or second child, with at least six of those weeks taken after the birth. The duration of maternity leave increases for a third child or in the case of multiple births.
Male employees are entitled to a total of 14 days' paid leave after the birth of a child. In the case of multiple births, additional days are granted. An employee who adopts a child is entitled to 10 weeks' leave. If the entitlement is shared between the parents, additional days are granted. The adoption leave may be increased depending on the number of dependent children within the family and the number of adopted children.
CBAs may set forth longer periods of leave.
While on leave, the employee receives a monthly allowance granted by the social security administration, to compensate for the loss of salary. Depending on the applicable CBA, however, the employer may be obliged to continue paying the usual salary of some categories of employees for the full duration of the leave.
An employee with at least one year's service is entitled to parental leave for each child under three years of age. Parental leave is for a maximum initial one-year period, which may be renewed twice. An employee on parental leave may continue to work part time. Leave may be extended for an additional year if the child is seriously ill or disabled. Government benefits may be provided for employees who meet certain eligibility requirements.
2.3 Are trade unions recognised and what rights do they have?
To be considered as representative within a company, a trade union must meet the following criteria:
- respect of republican values;
- financial transparency;
- minimum seniority of two years in the relevant professional or geographical area;
- minimum percentage of 10% of the votes cast at the last professional elections of the members of the social and economic committee (SEC). Further to recent legislative changes, the SEC has subsumed and superseded all previously existing employee representative bodies (ie, staff delegates, works council and hygiene, safety and working conditions committee). The SEC must be implemented by 1 January 2020 at the latest. If the SEC has not yet been established, the results taken into account will be those of the first round of the last professional elections of the permanent members of the works council or, if there is no works council, of the staff delegates;
- influence, which is mainly characterised by activities and experience; and
- the importance of membership and contributions received (Article L2121-1 of the French Labour Code).
Representative trade unions may appoint a trade union delegate to negotiate within the company. Also, representative trade unions which are called upon to negotiate the pre-election protocol may present candidates in the first round of professional elections and may also form a trade union section.
Outside the company, representative trade unions have the power to negotiate collective agreements, take legal action, assist employees in legal proceedings, take alternative actions for the benefit of employees and act in the collective interest of the profession.
2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?
The processing of employees' personal data is governed by the EU General Data Protection Regulation and the French Data Protection Act. These rules impose obligations on the employer in its capacity as controller of employee data.
The processing of employees' personal data must be legally justified. In particular, it is lawful if:
- it is necessary for the performance of a contract (payroll management);
- it is necessary for compliance with a legal obligation to which the employer is subject (mandatory social returns/filings); or
- the employee has expressly consented to such processing (this consent may be withdrawn at any time).
The employer must inform employees of the processing of their data, and in particular of:
- the methods and purposes of such processing;
- the period for which their data will be retained; and
- the existence of rights such as the rights to access, rectify and delete their data.
The employer must ensure the security of this information through appropriate technical and organisational measures, and ensure that only authorised persons are aware of such data.
Employees have legal remedies if the employer fails to comply with its obligations. The employer may be subject to severe penalties (administrative fines ranging from 2% to 4% of its worldwide annual turnover).
2.5 Are contingent worker arrangements specifically regulated?
The conditions for temporary work are strictly regulated by law. Temporary work involves the temporary loan of an employee by a temporary employment agency (TEA) to a user company for the performance of an assignment.
The law recognises a limited number of cases in which temporary work is permitted. In any event, the assignment contract may not have the effect of permanently filling a position that concerns the normal and permanent activity of the user company. Temporary work consists of a triangular relationship which gives rise to the conclusion of two contracts: a loan contract between the TEA and the user company, and a separate assignment contract concluded between the TEA and the temporary employee. No contract is concluded between the user company and the temporary employee.
The assignment contract may not exceed a maximum duration, which in principle is 18 months. Under certain conditions, the contract may be renewed without exceeding the maximum duration provided for by applicable legal provisions.
In this triangular relationship, some obligations are borne by the TEA (eg, the payment of remuneration), while others are borne by the user company (eg, occupational health and safety issues).
3 Employment benefits
3.1 Is there a national minimum wage that must be adhered to?
French law provides for a statutory minimum wage applicable to all employees over 18 years old, called the ‘salaire minimum interprofessionnel de croissance' (SMIC). This is a minimum hourly salary which is revised according to several readjustment mechanisms set out in the French Labour Code. As of January 2019, the SMIC is €10.03 gross.
In addition, industry-wide collective bargaining agreements (CBAs) generally set forth their own minimum wages per category of employee, which must be followed.
3.2 Is there an entitlement to payment for overtime?
Overtime pay is calculated based on the hourly rate applicable to the employee, with a surcharge. The applicable surcharges under French labour law are as follows:
- for the first eight hours of overtime (ie, between 35 and 43 hours per week) – an increased rate of 25%; and
- for all hours of overtime thereafter (ie, in excess of 43 hours per week) – an increased rate of 50%.
There is an annual overtime threshold which constitutes a trigger threshold for a mandatory compensatory rest period: beyond this limit, the employee must be granted a compensatory rest period in addition to the initial overtime payment. This annual overtime threshold is 220 hours, as set out by the French Labour Code.
CBAs may contain specific provisions in this regard.
3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?
Pursuant to the French Labour Code, employees are entitled to a total of five weeks' vacation (ie, 25 work days based on a five-day working week or 30 work days based on a six-day working week). The employee accrues 2.5 days every month (based on a six-day working week). In principle, vacation days are accrued from 1 June Y to 31 May Y+1, and are taken during the period from 1 June Y+1 to 31 May Y+2. However, with the employer's express agreement, it is common practice to take vacation ‘by anticipation' – that is, to take vacation days during the first year even if the vacation rights for the reference period have not been fully accrued.
In addition, employees are entitled to bank holidays and may have additional holiday depending on the applicable CBA.
3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?
In France, employees are not entitled to ‘sick leave' as such.
All employees who work for an employer in France must be affiliated with the French social security system and are thus covered (as well as their spouse, children and other dependants living under the same roof) by health insurance. The principal benefits are:
- reimbursement of a fixed percentage of medical, dental, para-medical, pharmaceutical and laboratory analysis expenses; and
- daily benefits designed to compensate them for any period during which they cannot work due to an illness or accident.
The daily benefits paid by the social security system in case of sick leave do not cover the full amount of the usual remuneration habitually earned by the employee. However, complementary benefits may be paid to the employee by the mandatory death and disability insurance body to which the employer is affiliated and contributes (‘régime de prévoyance').
CBAs generally set forth specific provisions stating that in the case of employees with a minimum length of service, the employer must continue paying 100% of their remuneration for a certain period of time while they are on sick leave. The employer will then receive directly the daily benefits from the social security system, as well as the complementary benefits paid by the mandatory death and disability insurance body.
3.5 Is there a statutory retirement age? If so, what is it?
The statutory age of retirement is 62. In some specific cases, it is possible to retire before that age – for example, in case of a long career or a disability. An employee may be forced to retire once he or she reaches the age of 70.
4 Discrimination and harassment
4.1 What actions are classified as unlawfully discriminatory?
Pursuant to the French Labour Code, no one may be excluded from a recruitment procedure or from access to a traineeship or a period of on-the-job training, or punished, dismissed or subjected to any direct or indirect discriminatory measure – in particular as regards remuneration, incentives or distribution of shares, training, redeployment, assignment, qualification, classification, professional promotion, transfer or contract renewal – on the basis of criteria defined by law.
Therefore, employees, trainees and prospective employees are all protected against any kind of discrimination and sexual and moral harassment, including indecent working conditions, whether at the time of recruitment, during their employment or upon termination.
However, the principle of non-discrimination does not preclude differences in treatment where such differences meet an essential and determinant professional requirement, the objective is legitimate and the requirement is proportionate.
Several grounds of discrimination are specifically referred to in the law as giving rise to legitimate differences of treatment. These include age, economic vulnerability and place of residence and unfitness for work, as established by an occupational physician or the measures taken in favour of disabled persons.
4.2 Are there specified groups or classifications entitled to protection?
The law lists the following prohibited discriminations: origin, sex, morals, sexual orientation, gender identity, age, family status, pregnancy, genetic characteristics, particular vulnerability resulting from the economic situation of the person concerned, apparent or known to the author of the discrimination, actual or assumed affiliation with a specific ethnic group, nation or alleged race, political opinions, trade union or mutualist activities, religious convictions, physical appearance, family name, place of residence, bank domiciliation, health condition, loss of autonomy, disability and ability to express oneself in a language other than French.
There are also specific unlawful discrimination regimes, applicable to grounds such as:
- trade union discrimination;
- discrimination in strike action;
- discrimination resulting from acts of sexual harassment;
- discrimination between men and women in terms of remuneration; and
- discrimination based on pregnancy status.
4.3 What protections are employed against discrimination in the workforce?
There are no legal rules laying down specific protection measures against discrimination in the workplace.
However, a general principle of non-discrimination applies to all employers and employees, as well as job candidates, trainees and apprentices. As such, employers must ensure equal treatment for all employees and ensure that they are neither discriminated against nor harassed.
In addition, employers are obliged to take all necessary measures to ensure health and safety in the workplace (Article L4121-1 of the French Labour Code), including a duty of prevention, and to this end may undertake preventive actions such as training to combat potential risks in the working environment (eg, discriminatory behaviour, harassment, violence at work). Therefore, in compliance with these obligations, employers must ensure the physical and psychological health of employees and sanction any discriminatory behaviour within the company.
4.4 How is a discrimination claim processed?
Employees who consider themselves to be victims of discrimination may refer to:
- the Defender of Rights, an independent administrative authority which is tasked with defending people whose rights are not respected and ensuring equality of access to rights for all; and
- employee representatives, as part of the alert procedure.
Specific provisions simplify civil legal action for employees who are victims of discrimination.
An action for compensation for damage resulting from discrimination must be brought before the employment tribunal within five years of the date of disclosure of the discrimination.
The burden of proof is on the employer if the employee can make a plausible case for discrimination.
A group action may also be brought in respect of discrimination by a representative employee trade union organisation, but is subject to a separate procedure.
The French Labour Code also protects employees who bring a legal action for discrimination. Thus, the dismissal of an employee following a legal action for discrimination – whether brought directly by the employee or on his or her behalf – is declared null and void if it is established that the dismissal has no valid cause, but in fact constitutes a measure taken by the employer as a result of the legal action that the employee has brought.
4.5 What remedies are available?
In case of breach of equal treatment, the employee may make various requests, such as a change in classification, back pay and damages.
Any act which would directly or indirectly imply discrimination is null and void (in case of dismissal, the employee has a right to reinstatement), but also gives rise to damages (minimum six months in case of dismissal, if the employee is not reinstated), and may constitute a criminal offence (punishable by up to one year's imprisonment and a fine of up to €15,000). Damages can be awarded to compensate for harm to the employee's career and can include a payment in respect of lost wages which the employee would have earned going back three years.
4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?
In general, the employer is obliged to take all necessary measures to ensure health and safety in the workplace (Article L4121-1 of the French Labour Code). Therefore, it is its responsibility to take all necessary measures to prevent acts of sexual or moral harassment and to punish the perpetrators of such acts.
The French Labour Code also imposes a number of obligations on the employer as part of this duty of prevention, such as a requirement to disseminate information within the company on texts relating to harassment, and to highlight the provisions of the French Labour Code on moral and sexual harassment in its internal rules and regulations.
In addition, employees who have suffered or refused to suffer sexual harassment, or who have reported acts of sexual harassment, may seek the annulment of any retaliatory measures taken against them.
Any act which would directly or indirectly imply harassment is null and void (in case of dismissal, the employee has a right to reinstatement), and also gives rise to damages (minimum six months in case of dismissal and if the employee is not reinstated), and may also constitute a criminal offence (punishable by up to one year's imprisonment and a fine of up to €15,000). Damages can be awarded to compensate for harm to the employee's career and can include a payment in respect of lost wages which the employee would have earned going back three years.
5 Dismissals and terminations
5.1 Must a valid reason be given to lawfully terminate an employment contract?
Employees may be terminated for, disciplinary personal cause (eg, simple, serious or gross misconduct), non-disciplinary personal cause (eg, poor performance) or economic reasons.
In any case, there must be proper and serious cause (‘cause réelle et sérieuse') for the dismissal and the correct procedure must be followed.
The law does not define ‘proper and serious cause'. Judges will consider in each case whether there was proper and serious cause for the termination.
5.2 Is a minimum notice period required?
The notice period begins to run after notification of termination – that is, when the dismissal letter is presented at the employee's address (or in case of resignation, when the resignation letter is presented at the employer's address).
The length of the notice period (after the probationary period) is set forth in the applicable collective bargaining agreement (CBA) and generally depends on the employee's classification:
- For regular employees, technicians and supervisory employees (‘ETAM'), the notice period is generally one or two months, depending on the coefficient and/or the number of years of service.
- For managerial employees/executives (cadres), the notice period is generally three months (maximum six months for certain categories of executives).
The employer may release the employee from his or her duties during the notice period, but his or her remuneration must still be paid.
In case of dismissal for serious or gross misconduct, no notice period applies.
There is also no notice period in case of termination by mutual consent (‘rupture conventionnelle').
In case of economic dismissal, if the employee agrees to benefit from a specific public external relocation programme called the CSP, there is no notice period (but an amount equivalent to the employee's salary, including social security charges, must be paid to the public unemployment agency).
5.3 What rights do employees have when arguing unfair dismissal?
If an employee is dismissed without real and serious cause, the judge may propose that the employee be reinstated. If the employee and/or employer refuses reinstatement, an indemnity payable by the employer will be granted to the employee.
In September 2017 the so-called Macron Ordinances introduced a scale relating to severance pay due in case of dismissal without real and serious cause. This scale sets minimum and maximum compensation thresholds based on the employee's seniority (Article L1235-3 of the French Labour Code). Compensation is calculated in months of gross salary and capped at 20 months' salary for employees with at least 29 years' seniority. However, the caps do not apply in companies that usually employ fewer than 11 employees.
This scale does not apply if the judge finds that the dismissal is vitiated by one of the grounds of invalidity set out in the French Labour Code, such as the violation of a fundamental freedom, moral or sexual harassment, discrimination or dismissal of a protected employee (Article L1235-3-1 of the French Labour Code). If the employee is not reinstated, he or she is entitled to a minimum benefit of six months' salary.
As of the time of writing, many employment tribunals are questioning this scale, arguing that it is contrary to international conventions, and are refusing to apply the compensation caps specified therein. A decision of the Court of Cassation (French Supreme Court) is expected in 2020 to settle this issue. For the time being, the future of the scale remains uncertain.
5.4 What rights, if any, are there to statutory severance pay?
The French Labour Code provides for a statutory severance payment for employees with at least eight months' service and sets forth the following calculation method: one-quarter of the average gross monthly salary per year of seniority for the first 10 years of seniority and one-third thereafter.
CBAs also provide for severance payments in amounts which are generally more favourable for the employee than that set forth by the French Labour Code. If the amount is more favourable, it must apply in place of the statutory severance pay; however, CBA severance pay generally applies only for employees with at least two years of service. The method for calculating CBA severance pay is generally as follows:
percentage of gross monthly average salary x number of years of seniority
However, CBAs may provide for a different method for calculating severance pay, which will generally differ depending on the employee's classification and/or status (ie, executive/non-executive employee).
In case of dismissal for serious or gross misconduct, no severance pay is due at the time of termination. There is no mandatory notice period.
In case of termination by mutual consent, the termination indemnity may be freely negotiated between the parties, provided that the employee receives a payment that is at least equal to the amount of severance pay that would be payable, as outlined above. There is also no mandatory notice period.
6 Employment tribunals
6.1 How are employment-related complaints dealt with?
The employment tribunals (Conseils de Prud'hommes) have jurisdiction to hear any dispute that arises between the employer and employee during the employment relationship or relating to termination of the employment contract. Conversely, the employment tribunals do not have jurisdiction to adjudicate disputes relating to collective labour relationships, which fall under the competence of the first instance court.
For an action to be admissible, it must be brought before the employment tribunal within a specific timeframe, which varies according to the nature of the dispute. If the applicable timeframe is not observed, the action is time barred.
Once the action is brought before the employment tribunal, the parties will first appear before a conciliation and referral board (CRB) and then, if conciliation fails, before a judgment board.
6.2 What are the procedures and timeframes for employment-related tribunals actions?
Proceedings before the employment tribunal may be initiated either by voluntary presentation of the parties before the CRB or by a motion addressed to the clerk of the employment tribunal (containing, in particular, information deemed mandatory on pain of invalidity, a summary statement of the grounds on which the motion is based and the various heads of claim), together with the documents that the plaintiff wishes to invoke in support of those claims and a statement listing such documents.
The procedure involves two phases: a conciliation phase and a judgment phase. Except in certain limited cases, the conciliation phase is a mandatory prerequisite. In the absence of a conciliation phase, the proceedings may be automatically invalid. In principle, the hearing before the CRB is not public. If conciliation fails, the CRB may refer the case to the judgment board.
Generally, the timeframe of first-instance proceedings is between six and 12 months.
After a first-instance decision has been issued, the case may go to the appellate court and then to the Court of Cassation (French Supreme Court). If a case proceeds through all instances of appeal, it may take nearly 10 years to resolve.
7 Trends and predictions
7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
The Macron Ordinances of 22 September 2017 on the reform of French labour law heralded a paradigm shift in France. Before then, labour law was exclusively protective of employees. Following the introduction of the ordinances, labour law provisions have sought to rebalance the employment relationship by introducing various measures to protect employers' interests as well.
However, some employment tribunals have been reluctant to apply the new rules. For example, several employment tribunals have refused to apply the legislative scale relating to severance pay due in case of dismissal without real and serious cause, considering that this is inconsistent with international conventions. Faced with resistance from the employment tribunals, the government has asked them to report the decisions that have been appealed concerning the application of the scale, in order to join the proceedings as an added party and make known the opinion of the public prosecutor on the application of the law. A decision of the Court of Cassation (French Supreme Court) is expected in principle in 2020 to settle this issue. For the time being, therefore, the future of this scale remains uncertain.
Forthcoming labour law reforms mainly concern unemployment insurance and pensions. Essentially, they provide for the establishment of a common public pension scheme and make resigning employees and self-employed persons eligible for unemployment benefits. Negotiations on the content of these reforms are still ongoing.
8 Tips and traps
8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?
The first thing that entrepreneurs who are planning to hire their first employees must do is determine which collective bargaining agreement (CBA) applies, according to the relevant business sector. The CBA will outline many of the terms and conditions of employment; the mere application of the French Labour Code is therefore insufficient.
Working hours are a crucial issue in the employment relationship in France, and must be carefully considered in view of the significant risks incurred (financial and criminal) in the event of non-compliance with the applicable rules.
Moreover, the French Labour Code provides that in the context of a dispute before the employment tribunal, if the judge has any doubt, this will benefit the employee. In general, and with some exceptions, the burden of proof lies mainly with the employer.
Another sticking point to be highlighted is the fact that all French companies with at least 11 employees must establish a social and economic committee (SEC). Following recent legislative amendments, the SEC has subsumed and superseded all employee representative bodies (ie, staff delegates, works councils and hygiene, safety and working conditions committees) and must now be established in place of the previous representative bodies, and in any case before 1 January 2020.
Given the specific nature of French labour law - which is characterised by a patchwork of sources and continual evolution - it is strongly recommended that foreign entrepreneurs who hire employees in France be assisted by a lawyer specialising in labour and employment law.
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.