On 31 August 2017, in the framework of its efforts to reform labor law, the Government presented five draft decrees1 intended to strengthen social dialogue. These decrees were adopted and published on 23 September.
The 36 measures contained in these decrees will have a major impact on social dialogue within companies. They will increase the number of areas which are open to negotiation, merge employee representative bodies, and grant small and medium businesses the possibility of entering into agreements directly with employees where there are no trade unions present in the company.
Another key measure in this new reform is the establishment of a scale applicable to damages for unfair dismissal.
An increase in the legal compensation for dismissal will be the subject of a future decree.
It will take time for companies to discover these new collective bargaining and social dialogue tools and assess their impact and advantages.
We have summarized the most significant measures below:
In order to strengthen collective bargaining, three groups of negotiation aspects have been defined.
1) The first group includes aspects for which industry-level agreements take precedence over company-level agreements, except in the event the provisions of the latter are at least favourable for employees. These aspects are:
- minimum salary levels (excluding bonuses) and classifications;
- pooling of funds to finance equal representation and vocational training;
- supplementary collective benefits (social protection) ;
- various measures concerning working hours (equivalencies, night-shift work, part time work...);
- various measures concerning fixed term contracts (CDD), temporary contracts, and project based contracts;
- gender equality;
- length of renewal of trial periods;
- the transfer of employment contracts outside the scope of Article L. 1224-1 of the Labor Code (French "TUPE" legislation).
2) The second group includes aspects for which the industry can decide to have its agreement prevail over company-level agreements made subsequently. If the industry-level agreement provides for this override, company-level agreements apply only where their provisions are at least as favorable for employees. The aspects involved are the prevention of the effects of exposure to occupational risk factors (arduousness), occupational integration and retention in employment of disabled workers, headcount as of which trade union representatives must be appointed, and bonuses for hazardous and unhealthy work.
3) And the third group contains all the other aspects which are subject to negotiation and which are not mentioned previously. In this large group, preference is given to company-level agreements no matter when they were entered into. Industry-level agreements apply only where there is nothing in the company-level agreements. Company-level agreements prevail as from the date of publication of the decree, the date on which any provision which is contrary to the industry agreements, no matter what the date of publication, ceases to have effect.
More flexibility in the rules for dismissal
Standard form letters (Cerfa) for dismissal mentioning the rights and obligations of employers and employees are implemented by decree. The grounds for dismissal can be filled in by the employer, either on its own initiative or at the request of the employee, after notice of the dismissal has been given. Where there is no request by an employee, insufficient justification constitutes an error which no longer systematically deprives the dismissal of its just cause, but gives rise to compensation of no more than one month's salary.
In the same way, a procedural error, in particular concerning the pre-termination meeting, no longer deprives the dismissal of its just cause but gives rise to compensation of no more than one month's gross salary.
These measures aim at limiting the risks for employers with respect to simple procedural errors.
A compensation scale providing visibility with respect to unfair dismissal compensation
The scale applies except in cases of discrimination, harassment or violations of constitutional rights (in these cases, damages are set by the courts in an amount equal to at least 6 months gross salary) and provides for:
- a minimum of between 0.5 and 3 months gross salary (after one year of seniority) depending upon the number of employees in the company;
- a maximum of between 1 and 20 months gross salary depending upon the employee's seniority.
This scale will be used by employment tribunals and will thus allow companies to evaluate the risks in the event of a dispute.
Protecting the termination of employment contracts
The time limit for employees to challenge dismissals has been standardized: 12 months no matter what the reason (economic or personal), which limits late actions by employees, who currently have two years in which to challenge dismissal for personal reasons.
A "collective contractual termination" has been created, consisting of a voluntary departure plan by collective agreement subject to approval by the administration.
The conditions for receiving the legal redundancy compensation have been modified: it is granted to employees having at least eight months seniority.
The legal dismissal compensation will be set by decree at ¼ months' salary per year of seniority up to 10 years, and then 1/3 for each year after that.
Simplification of the procedure for economic dismissal
Economic grounds for dismissal are no longer evaluated at a worldwide level for companies belonging to a group (except in the event of fraud). Financial difficulties are evaluated by the courts at the level of group companies located in France having the same business activity. The decree states that: "The activity sector for assessing the financial reasons for dismissal is established, in particular, by the type of products, goods, or services delivered, the clientele targeted, the distribution networks and methods, relating to the same market."
Deployment obligations are simplified: employers must still transmit deployment offers to the employees concerned but not necessarily in writing. A list of available jobs can be communicated using other means, for example, by intranet.
Merging of employee representative bodies (IRP)
A social and economic committee must be set up (Comité Social et Economique - CSE) in companies with at least 11 employees. Where there are fewer than 50 employees, the CSE carries out the tasks of employee representatives (délégation du personnel - DP).
In companies with more than 50 employees, the CSE will carry out the tasks of the former DP, Works Council (Comité d'Entreprise - CE) and Workplace Health and Safety Committee (Comité d'Hygiène, de Sécurité et des Conditions de Travail - CHSCT) which will not exist anymore. Where there are over 300 employees, a Workplace Health and Safety Commission (Commission de Santé, Sécurité et des Conditions de Travail) is set up.
Elected employee representatives can, by majority agreement, create a single body with trade union representatives and the new CSE, and this single body named Company Council (Conseil d'Entreprise) can engage in collective negotiations.
Strenghtening negotiations within companies
Starting on 1 May 2018, all agreements must be majority agreements in order to be binding.
However, a non-majority agreement can still be approved (with 30% of the votes and in the absence of opposition) by referendum at the employer's initiative. This possibility concerns arrangements to the duration and organization of work, and remuneration and professional or geographic mobility internal to the company. This will allow companies to more easily implement working time arrangements including working time arrangements based on the number of days worked per year (forfait jours).
The provisions of these agreements replace any contrary clauses in employment contracts. If an employee refuses, his or her dismissal is personal and based on just cause.
Simplification of collective bargaining in small companies
In companies with fewer than 20 employees where there are no elected staff representatives, the employer can propose an agreement directly to the employees with respect to all the aspects covered by collective bargaining. The agreement enters into force after approval by a 2/3 majority of employees.
In larger companies without trade union representatives, employers can negotiate with appointed employees or an elected staff representative.
Simplification of the prevention of arduous work account
This account has been renamed the "professional prevention account". Employers' obligations to declare have been eliminated as concerns four factors of arduousness: handling of heavy loads, arduous physical postures, mechanical vibrations, and chemical risks.
An employer who refuses to allow an employee to telework must give the reasons for its decision.
Teleworking on an occasional basis is possible by simple agreement between the employer and the employee and does not require any particular formalities.
- Decree on the strengthening of collective bargaining
- Decree on the reorganization of social and economic dialogue in companies and promoting the exercise and the enhancement of trade union responsibilities
- Decree on the predictability and protection of labor relations
- Decree on various measures concerning collective bargaining
- Decree on the professional prevention account
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.