Employment 2023 Comparisons

Employees in France are typically divided into three categories:

• blue-collar workers, who are sometimes subdivided into workers (ouvriers/employés) and technicians/supervisors (techniciens and agents de maîtrise);
• executives/managers (cadres, who can be assimilated to white-collar workers); and
• senior executives (cadres dirigeants).

National collective bargaining agreements, which are negotiated at the industry level and are in principle applicable to all companies in that industry, typically provide for minimum wages for each employee category.

Provided that they perform their work with a certain degree of autonomy and/or responsibility, executives and, subject to specific conditions, technicians/supervisors, can be subject to a specific working time arrangement calculated in days worked per year (instead of hours worked per week) called forfait-jours. This enables the company to pay a lump-sum salary to the employee regardless of their actual working hours (see 1.3 Working Hours).

Senior executives, who are the employees with the highest level of responsibility and remuneration within a company, are not subject to working time regulations.

As a principle, an employment contract is deemed to exist, even in the absence of a written contract, when a person undertakes to work for and under the direction of another in return for remuneration. This definition is articulated around three principles:

• the performance of work, which can involve a wide variety of tasks (manual, intellectual or artistic), in all professional sectors;
• the payment of remuneration in return for the work performed, whether paid in money or in kind, and whether calculated on a time or commission basis; and
• the legal subordination, ie, the authority of the employer who has the power to give orders and instructions, to monitor their execution, and to sanction the employee’s failings.

Indefinite-Term Employment Contracts

Indefinite-term employment contracts are the standard form of employment. Even though they do not have to be written from a strict legal point of view, the majority of companies in France execute written contracts.

Any unwritten employment contract is deemed to be an indefinite-term, full-time contract.

Definite-Term Employment Contracts

Definite-term contracts can be also used. Unlike indefinite-term contracts, they must, in particular:

• be executed in writing within two days of the start of the employee’s employment;
• be entered into to carry out a specific, temporary task, and only in a limited number of cases provided by the law, such as a temporary increase in activity, the replacement of a temporarily absent employee, or seasonal work;
• have a definite date of termination, which can be a precise date or a specific event, such as the temporarily absent employee’s return date;
• not exceed the maximum length authorised by law (eg, 18 months in the case of a temporary increase of activity, renewable once for another period not exceeding 18 months); and
• have neither the purpose nor the effect of permanently filling a job linked to the normal and permanent activity of the company.

Definite-term contracts that do not follow these legal requirements can be requalified into indefinite-term contracts.

Part-Time Employment Contracts

Part-time employment contracts can also be concluded for employees working less than the standard working hours, ie, typically 35 hours a week or 218 days a year (see 1.3 Working Hours). Among other requirements, these part-time contracts should be written and specify the number of hours worked (or days worked per year).

Standard Working Time

The standard working time arrangement in France is 35 hours a week.

Overtime

Any hour worked beyond this threshold is considered overtime, and is usually compensated with a salary increase of 25% (for the first eight overtime hours) or 50% (beyond the eighth hour), unless an applicable collective bargaining agreement provides for lower compensation, with a minimum of 10%.

Unless provided otherwise by applicable collective bargaining agreements, an employee cannot do more than 220 overtime hours within the same year. Beyond this limit, any overtime hours must be compensated (in addition to salary) by additional days of paid leave. Since January 2019, overtime is exempted from income tax up to EUR7,500 per year, and subject to a reduced rate of social contributions (ie, an exemption from pension contributions within the limit of 11.31% of salary).

Day-Year Scheme (Forfait-Jours)

Employees performing their work with a certain degree of autonomy and responsibilities can be subject to a day-year scheme called forfait-jours, under which they must work for a certain number of days per year (no more than 218 days). They receive lump-sum remuneration that covers all their hours of work, without any distinction between ordinary and overtime hours.

This particular scheme is very popular, especially for executives who are thus not subject to the 35-hour week. However, to be valid, this scheme must be provided for in a collective bargaining agreement (whether industry-level or company-level). This agreement should include guarantees ensuring that the employee’s working hours and workload remain reasonable, and provide safeguards in respect of the protection of employee health and safety.

In the absence of such provisions, or if the employer does not comply with them, the day-year scheme could be deemed invalid, and the rules related to overtime would then apply. This gives rise to significant litigation in France, with a three-year limitation period for claims related to compensation. As a consequence, employers are strongly advised to design their day-year schemes carefully.

Part-Time Contracts

For part-time employees, unless otherwise agreed, employees may not work less than 24 hours or more than 35 hours a week (or a prorated number of days for forfait-jours). A part-time employee may divide their working hours over a week, a month or even a year, as provided in their employment contract.

French Language

Employment contracts, as well as any amendments or schedules to the contracts, must be written in French to be enforceable against the employees. Bilingual contracts are also permissible, providing that the French version prevails.

In France, employees are usually remunerated in cash on a monthly basis, according to the number of hours or days worked.

Minimum Wage

A statutory minimum wage, called SMIC, and under which no employee working full-time can in principle be remunerated, is fixed every year by the state. For 2023, this minimum was set at EUR1,747.20 (gross) per month and EUR11.52 (gross) per hour. In addition, industry-wide national collective bargaining agreements can provide a minimum wage that depends on the employees’ status and classification, provided that it is higher than the SMIC.

Additional Compensation

Collective bargaining agreements also commonly provide for supplementary compensation (eg, an individual/company-based performance bonus, a 13th month, seniority or holiday bonus, pension plans, and health and welfare plans). This additional compensation, which is distinct from the minimum wage, may be payable to all employees or specifically reserved to certain employee categories (eg, executives or non-executives).

Some employees, usually managers, may receive additional compensation in the form of grants under long-term incentive plans (eg, bonus based on group’s performance, phantom shares, or restricted/free stocks), subject to their continued employment during the performance period.

Profit-Sharing

In companies that have been employing more than 50 people over the past five years, the implementation of profit-sharing mechanisms to the benefit of employees is mandatory. The amount due to employees is calculated using a legal formula which takes into account the company’s net income, added value, wage bill and common equity. Profit-sharing bonuses benefit from favourable tax and social contribution regimes.

Profit-sharing schemes can also be set up voluntarily by the company. These voluntary schemes benefit from the same favourable tax and social contribution regimes as mandatory profit-sharing, and have been increasingly promoted by the government in the past few years.

A new bill, currently being discussed in the Parliament and Senate, aims at extending mandatory profit-sharing to companies with fewer than 50 employees and setting up new profit-sharing schemes and bonuses (see the Trends and Developments chapter in this guide).

Annual Negotiation on Compensation

In principle, companies with more than 50 employees and with a trade union delegate are required to negotiate every year with the trade union delegates on the employees’ remuneration and its potential increase. Whilst negotiating is mandatory, there is no obligation to reach an agreement.

In 2023, negotiations on salary increases have been focused on inflation. For 2023, salary increases amounted to approximately 4.4% on average, compared to 2.8% in 2022 and 1.4% in 2021.

Paid Holiday Leave

Under French law, employees have at least five weeks of paid holiday leave per year. They can also be entitled to additional days off (RTT), which are granted when employees work beyond the 35-hour working week or are subject to a specific arrangement called forfait-jours (day-year scheme) to work a certain number of days per year.

Public holidays are taken in addition to an employee’s annual leave entitlement.

Employees can also be entitled to special paid leave days for specific events, such as marriage, death of a relative, sickness of a child, etc. Collective bargaining agreements can provide for additional paid leave days.

Leave of Absence

In addition to holiday leave, employees may benefit from other kinds of paid leave such as leave for personal reasons, sick leave, family leave, pregnancy leave, and maternity or paternity leave.

In such cases, the employment contract is suspended and the payment of the employee’s compensation is covered, usually partly, by public social security funds. Collective bargaining agreements can also require companies, under certain circumstances, to supplement this social security indemnity so that the employees receive their full salary.

Obligation of Loyalty and Discretion

Employees are subject to a general obligation of loyalty and discretion towards their employer. As a consequence, they are prohibited from disclosing, whether within or outside the company, confidential information or knowledge obtained in the performance of their duties. They are also prohibited from disclosing manufacturing secrets.

Employee Liability

In principle, employees cannot be held civilly liable for damage caused to their employer in the performance of their work. As a consequence, liability clauses in employment contracts cannot be enforced. By way of exception, an employee may be held civilly liable for gross negligence (faute lourde), where the employee commits serious misconduct with the intention to cause the company harm.

With respect to harm caused to third parties, employees can only be held personally liable for their actions if they acted outside the scope of their professional duties, without authorisation from their employer, and for purposes unrelated to their duties.

The general obligation of loyalty and discretion applicable to employees in the performance of their duties typically covers confidentiality, professional secrecy and non-disclosure of trade secrets, but also a non-compete undertaking during the execution of the employment contract.

To protect their interests after the termination of an employment contract, companies can provide a specific non-compete clause. These clauses, which are typically applied to the most senior managers or to employees with specific competitive skills, usually provide that the employee agrees not to carry out, on their own behalf or on behalf of another employer, an activity similar to that of their employer’s business during a certain period of time following the termination of the employment relationship.

To be valid, a non-compete covenant must follow four rules.

• It must be necessary to protect the legitimate interests of the company.
• It must be limited in time (a certain number of months or years, it being noted that more than 12–18 months is unusual, unless there are specific reasons justifying a longer restriction) and space (eg, a region, a country, a continent).
• It must include financial compensation for the employee during the period of the obligation.
• It must be limited in terms of the prohibited activities (ie, must be justified by the nature of the employee’s duties and must not prevent the employee from finding work corresponding to their qualifications).

Any non-compete clause that does not comply with each of these requirements is null and void, and will not be binding on the employee.

The company can release the employee from their non-compete obligation upon termination of their employment contract (and in any case before the end of the applicable notice period), if it is expressly provided for in the employment contract or in an applicable collective bargaining agreement, or expressly agreed by the employee.

As per case law, an employee who violates their non-compete obligation, even on a temporary basis, may have to refund the non-compete compensation to their former employer and may be held liable for damages.

Non-solicit clauses that apply to employees after the termination of their contract (eg, to prohibit them from reaching out to company’s employees, clients or customers) are typically included within non-compete clauses, to which they are often assimilated. As such, they must follow the same rules to be valid, in particular as it relates to the financial compensation and the limitation in terms of time and space.

In addition, case law limits the scope of clauses prohibiting former employees from soliciting current employees of the company: these non-solicits may only cover “active solicitation” by the former employee. In other words, notwithstanding the non-solicit, employees of the company are still free to apply for a job with the former employee and be hired by them, providing that there was no prior “active solicitation” by the former employee. In addition, these non-solicits should in principle cover only the people employed by the company at the date of termination of the employment contract of the former employee, and be applicable for no more than 24 months.

In France, data privacy is notably regulated by the Data Protection Law of 1978 (loi informatique et libertés) amended in 2018, implementing the EU General Data Protection Regulation (GDPR) locally. In the context of employment relations, protection of employees’ personal data must be ensured by all the company stakeholders processing employees’ personal data (human resources, accounting department, etc).

The obligations to which the employers are subject include, notably, the following.

• Personal data processing must be carried out lawfully, fairly and in a transparent manner.
• In order to process employees’ personal data lawfully, the processing shall rely on a lawful basis. For instance, the processing can be necessary to fulfil a legal obligation or for the purposes of the legitimate interests pursued by the employer. Data processing may also be necessary for the performance of the employment contract.
• The processing of employees’ personal data cannot pursue any other objective incompatible with the purpose for which the personal data were initially collected.
• The employees shall be informed about the processing. Furthermore, employees cannot be placed under permanent surveillance and implementation of monitoring tools shall respect employees’ privacy.
• Therefore, the works council and the data privacy officer (if appointed) must be informed and consulted prior to the implementation of any means of monitoring employee activity and/or tools for collecting their personal information.
• The company cannot consult an employee’s conversations on a personal messaging system, nor consult emails and folders labelled as “personal” on their professional computer unless the employee is present or has been duly invited.

Citizens of European countries, the European Economic Area and Switzerland benefit from provisions relating to the free movement of workers in Europe.

Non-European citizens must have a valid permit authorising them to work in France. Valid permits include the following.

• Residence permits, which are valid for a period of ten years, are automatically renewable and allow their holder to work in mainland France without any professional limitations.
• Temporary residence permits can also be issued for precise, professional purposes. Their validity period varies according to the nature of the foreign employee’s contract.

Before hiring a foreign worker who resides in France, and if the worker is not registered with the national unemployment agency (Pôle Emploi), a company must confirm with the local authorities that the worker’s permit is valid. This must be done no later than two days before the foreign employee’s first day of employment.

If the foreigner does not reside in France, the company must first file a job offer with the national unemployment agency (Pôle Emploi) and look for locally qualified candidates for at least three weeks (except if the job in question is part of the regional “list of short-staffed jobs” (liste des métiers en tension), in which case posting a job offer is not compulsory). If no unemployed person is qualified (or if there is no requirement to post a job offer), the company can file a request with the Labour Inspection (DREETS) to obtain a work permit for the foreign worker. After obtaining the authorisation, the company will have to pay a tax to the immigration authorities. The amount of tax to be paid will depend on the level of remuneration and the length and type of the employment contract executed with the foreign worker.

In addition, the company must record the type and reference number of the permit authorising the foreigner to work in France in the employee register. Copies of the relevant documents must also be retained.

The above does not apply to citizens of European countries, the European Economic Area and Switzerland, who benefit from provisions relating to the free movement of workers in Europe and, as such, do not need a work permit.

Remote work is relatively flexible in France and has become increasingly popular since the COVID-19 pandemic. Remote work refers to any form of working arrangement whereby work that could have been performed on the employer’s premises is carried out by an employee away from these premises on a voluntary basis. In other words, provided that the parties agree to it, work does not have to be performed at the employee’s domicile. For example, it could also be performed at a shared co-working space.

Companies can implement remote work by way of:

• a collective bargaining agreement concluded with trade unions at the company level;
• an internal policy issued after consultation of the works council (if any); or
• in the absence of a collective agreement or internal policy, an agreement with the employee.

Industry-wide collective bargaining agreements can provide for specific provisions and guidelines for companies the agreements apply to.

Regardless of the type of documentation implementing remote work, companies are strongly advised to conclude individual remote-work agreements with the relevant employees to set out each party’s rights and duties.

Remote work cannot, in principle, be imposed by the employer, except on a temporary basis in the context of exceptional circumstances, such as a pandemic. Conversely, an employee cannot impose their wish to work remotely on their employer. However, an employer’s refusal must be justified by objective grounds such as technical impossibility or organisational requirements.

The tools used by the employees for their work are typically provided by the company and must be used in compliance with the company IT policy. Rules relating to employee privacy must also apply to employees who work remotely.

The company has a duty of care with respect to the remote worker’s health and safety. It must notably ensure that the workspace and equipment are appropriate, prevent employee isolation, ensure a balance between private and professional life, and control workload.

There are no binding statutory rules governing the compensation of remote work. However, national collective bargaining agreements may provide for the reimbursement of expenses incurred by remote workers. This payment is exempt from social contributions, capped at an amount calculated by reference to the number of days worked remotely.

Sabbatical leave enables an employee to leave the company for a few months to pursue an activity of their choosing, to carry out a personal project, etc, without terminating their employment contract.

Sabbatical leave involves a suspension of the employment contract. However, the employee remains part of the company’s workforce, and remains subject to loyalty and non-compete obligations.

Conditions for Sabbatical Leave

Except as otherwise provided in applicable collective bargaining agreements, employees must fulfil certain conditions to be eligible for sabbatical leave. In particular:

• they must have at least 36 months of service within the company;
• they must have undertaken a professional activity for at least six years; and
• they must not have taken sabbatical leave in the past six years.

Approval by the Company

Upon receiving a sabbatical request from an employee, the company must, within 30 days, notify to the employee whether it:

• accepts the request;
• accepts the request but postpones its start date, notably if this is necessary to limit the numbers of employees that would be simultaneously on leave; or
• refuses the request.

If the company does not respond within 30 days, it will be deemed to have approved the sabbatical.

Refusals can be justified if the employee does not fulfil the legal requirements, or if the absence of the employee would have a negative effect on the company’s activity. In companies of a significant size (ie, with at least 300 employees), refusals can only be justified if the employee does not fulfil the legal requirements.

Remuneration During Sabbatical Leave

For the duration of the sabbatical leave, the employee is not legally entitled to any remuneration (except as provided by collective bargaining agreement or as agreed between the parties).

Nevertheless, an employee on sabbatical leave may engage in gainful employment throughout the sabbatical period, in particular to compensate them for a reduction or loss of income.

Flex-Office and Desk Sharing

Following the COVID-19 pandemic, companies of all sizes have had to adapt to a global fall in the number of employees working every day in the office and a corresponding rise in remote work. The most popular of these new working arrangements are “flex office” and “desk sharing”, which allow employers to reduce the size of their offices and, most importantly, the related costs.

Flex office is the practice of not allocating a specific workstation to an employee, but allowing them to move from one space to another depending on their tasks and missions: a free desk in their own office, a meeting space, a co-working room, a café, etc. This concept should be distinguished from the other popular concept of desk sharing, which means that employees no longer have allocated desks, but can sit wherever they like on company premises.

The implementation of these working arrangements is normally subject to prior consultation of the company’s works council (if any), as these arrangements have an impact on employee working conditions.

The Status of “Platform Workers”

As of January 2022, approximately 320,000 people worked as independent contractors for digital platforms in France, especially in the ride-hailing and food delivery sectors. In France, as elsewhere, this new form of work has become increasingly popular, but has also raised a number of legal issues.

These workers are not hired under an employment contract, and as such are not entitled to the benefits usually associated with a salaried employee status, such as paid leave or unemployment insurance. This has led many platform workers to seek the reclassification of their relationship with a digital platform as an employment contract, sometimes successfully, including in front of the French Supreme Court.

In response to this ever-growing number of workers and related disputes, the government enacted several laws to try to regulate relationships between these “independent contractors” and companies using digital platforms and apps to connect with their customers. For instance, since 2019, digital platforms have had a “social responsibility” towards their contractors, and are required to contribute to their work insurance and training costs. Platform workers may also form and join trade unions through which they can represent their collective interests.

In May 2022, the government organised elections for representatives of platform workers working in food delivery, in order to encourage social dialogue between them and the digital platforms. Since then, several national collective bargaining agreements have been negotiated, in particular on matters relating to the negotiation of collective agreements in the sector, to the minimum revenue guaranteed to platform workers, and to the termination of commercial relations between platforms and workers.

At the EU level, a draft Directive which introduces a legal presumption of salaried status for platform workers was approved by the European Parliament in February 2023. This draft is now under discussion between member states within the European Council.

Trade unions are involved on a daily basis in many areas of labour law in France: collective bargaining, health and safety, working hours, wages, etc. Within this general framework, a specific role is assigned to so-called “representative unions”.

To be considered as representative within a company, a trade union must have scored at least 10% at the last employee representative elections, as well as prove that it meets several criteria, including: respecting republican values, being independent vis-à-vis the employer, applying financial transparency, having sufficient influence through its activity and experience, and having a certain number of members.

Trade unions can be representative at the national industry level, where their main purpose is the negotiation of national collective bargaining agreements which are applicable to all companies belonging to the same industry.

Trade unions can also be representative at the company level, in which case they negotiate collective agreement applicable to company employees only. In practice, representative trade unions within a company must name union delegates, who have the power to negotiate the company collective bargaining agreements with the employer.

Trade unions and their delegates must not be confused with the works council (or comité économique et social, literally “social and economic committee”), which is a distinct employee representative body.

Two main types of employee representative bodies should be distinguished in France: the works council and the trade union delegates.

Works Councils

The works council (comité économique et social – literally “social and economic committee”) is a council composed of representatives elected by the employees during employee representative elections that occur in principle every four years. Members of the works council are not necessarily members of a trade union, although it is common in bigger companies.

The implementation of a works council is mandatory in companies with at least 11 employees. However, at this threshold, its role is limited. In companies with more than 50 employees, the works council must be informed or/and consulted on many economic, financial and employment matters. Its remit also includes the prevention of professional risks and the improvement of working conditions. An employer must seek and obtain the works council’s opinion before taking any binding decision affecting the general running of the company. The works council does not have a veto right.

In companies with several separate establishments, works councils can be set up for each establishment with one central works council covering the whole company. In addition, in large group companies, group works council can be set up to oversee projects at the group level.

Trade Union Delegates

The trade union delegates are employees chosen by trade unions that are representative within the company (ie, unions that scored at least 10% at the latest employee representative elections, among other requirements). Trade union delegates can negotiate and conclude collective bargaining agreements with the company. They are not members of the works council per se, although they may attend works council meetings, but without taking part in the votes.

Violation of Employee Representative Rights

Failure to respect provisions related to employee representatives and their protection may qualify as a criminal offence (délit d’entrave), which is punishable by a fine of up to EUR7,500 for legal representatives of the company (and EUR37,500 for the company itself) and/or one year of imprisonment, depending on the circumstances.

Collective bargaining agreements are the result of discussions and negotiations between employers’ representative organisations or the employers themselves on one hand, and employees’ trade unions on the other hand. They can cover a wide range of matters relating to the employment, professional training and working conditions of employees.

Collective bargaining agreements can be entered into at different levels: at the industry level, at the company or group level, at the level of each establishment or group of establishments, etc. Industry-wide national collective bargaining agreements are very common and their application is, in most cases, mandatory in all companies belonging to the same industry. Agreements negotiated at the company level are also common.

To terminate an employment contract, the employer must be able to justify its decision by reference to “real and serious” reasons. Such reasons should be documented and based on objective elements (eg, not getting along with a colleague would not be sufficient).

Personal or Economic Reasons

There are two types of reasons for dismissal.

• “Personal reasons” are the reasons that are directly related to the employee’s personal situation, such as misconduct (wilful or not), refusal to follow orders, lack of competence, etc.

• “Economic reasons” are reasons that are not related to employees themselves, but rather to economic circumstances, such as economic difficulties, decrease of revenues or orders, technological evolutions, reorganisation of the company necessary to maintain its competitiveness, closing down of a company/site, etc.

Procedures to dismiss vary depending on the reason for the dismissal. In particular, a dismissal for economic reasons and a dismissal of employee representatives (who are protected) may require the involvement of the works council. Specific obligations also apply to the dismissal of employees who have been declared unfit for work.

Collective Redundancies

If an employer wishes to dismiss more than one employee for economic reasons, specific collective redundancy provisions may be triggered. The procedures are complex and vary depending on whether the company employs more than 50 employees, and on the number of proposed redundancies.

In all procedures, the employer must inform and consult the works council, and send documentation related to the collective redundancy to the Labour Inspection. In addition, within companies employing at least 50 employees, if more than ten redundancies are planned over the same month, the employer will have to follow a specific consultation procedure and negotiate with the employee representatives a “social plan” (plan de sauvegarde de l’emploi) providing for social measures to the benefit of the redundant employees (relating to redeployment leave, training, the prevention of psychosocial risks, additional severance indemnities, etc). The Labour Inspection is also closely involved in these projects and has to approve the social plan before it can be implemented.

Notice periods are set by industry-level collective bargaining agreements and the Labour Code. They generally last between one and three months, depending on the employee’s status. Employees on notice period must receive their salary as usual, even if the company exempts them from working during the notice. The contract may be terminated without notice (or payment of notice) in the event of serious misconduct (faute grave) or gross negligence (faute lourde).

There is no at-will employment in France. If an employer intends to dismiss an employee, it must at least have cause (ie, a “real and serious reason”).

Process to Dismiss

To dismiss an employee, a specific process must be followed.

• Inviting the employee to a pre-dismissal meeting. The meeting must not be held earlier than five working days following the invitation’s delivery (or the first attempt to deliver it).
• During the pre-dismissal meeting, the employer will explain the reasons for the proposed dismissal and give the employee an opportunity to respond.
• If the employer still wishes to dismiss the employee after the pre-dismissal meeting, it can notify the employee of their termination, no earlier than two working days after the pre-dismissal meeting.
• This termination letter must explicitly mention the grounds for dismissal.

The final decision to dismiss must not be notified before the two working days have elapsed. Any dismissal decided in advance of this is deemed not to have a real and serious reason, which entitles the former employee to damages, usually calculated by reference to their salary and length of service.

Collective bargaining agreements can provide for a more favourable procedure.

Dismissed employees are entitled to a severance indemnity which is determined by the law or the industry-wide collective bargaining agreement, on the basis of their average remuneration and seniority.

Misconduct

If the cause for dismissal is misconduct, the employer must in principle act within two months of learning of such misconduct, and the final decision to dismiss must be notified within one month after the pre-dismissal meeting. In the case of a dismissal for serious misconduct (faute grave) or gross negligence (faute lourde), the employee is dismissed without any notice or any severance indemnity.

Before initiating dismissal proceedings, or to mitigate operational risks between the employee’s invitation to the pre-dismissal meeting and the meeting being held, companies can temporarily suspend the employee by way of “preventative suspension” (mise à pied conservatoire). This measure allows companies to carry out investigations on alleged misconduct, while temporarily relieving the employee from their duties. Preventative suspension can lead to dismissal, if the company finds that the employee’s actions are sufficiently “real and serious”, or to the employee’s reintegration within the company, potentially including reclassification of all or part of the preventative suspension as a “punitive suspension” (mise à pied disciplinaire), if a minor misconduct was committed. In this case, remuneration during the punitive suspension period will not be due to the employee.

Economic Reasons

In respect of a dismissal for economic reasons (except for collective redundancies), additional steps must be observed, such as establishing the selection criteria that will be used to determine which employees will be made redundant and attempting to redeploy employees within the company or other group companies in France.

Mutual Termination Agreements

Indefinite-term employment contracts may be terminated by means of a “mutual termination agreement” (rupture conventionnelle) between the company and the employee. Under this agreement, both parties agree to terminate the employee’s contract on a date of their choice, with the employee being entitled to a severance payment at least equal to the severance indemnity provided by the law or the industry-wide collective bargaining agreement.

Several steps must be followed to conclude a valid mutual termination agreement, notably the organisation of one or several meetings to discuss the agreement, the execution of a legal form which can be supplemented by a written agreement, and a validation by the Labour Inspection. The whole process usually takes approximately 40 days.

An individual mutual termination agreement is not a settlement agreement, under which the employee waives their right to bring future claims. An employee who has only signed a termination agreement can still file claims in connection with the performance of their employment contract (such as requests for back pay).

Settlement Agreements

When disputes arise in relation to the termination of an employment contract, the parties can settle the dispute by way of a so-called “transaction” or “settlement agreement”, whereby the employee waives their right to file an action in relation to their employment contract against payment by the employer of a settlement indemnity.

To be valid, a settlement agreement cannot be concluded before the actual termination of the employment contract. In other words, employers have to be very careful when opening discussions in view of a settlement when the contract has not been duly terminated yet (eg, when such termination is only contemplated or the process is in progress).

In France, some employees benefit from a specific protection against dismissal, amongst which are found employee representatives (eg, trade union delegates and works council members), as well as pregnant employees, employees on sick leave caused by a work accident or professional illness, employees declared unfit for work (inapte) by the occupational doctor, etc. If the provisions relating to the protection of such employees are not followed, then their dismissal will be deemed null and void.

Employee Representatives

Employee representatives benefit from a specific legal protection in connection with the performance and termination of their employment contract, including for six months (or 12 months for union delegates) after the end of their tenure. Such protection also applies to employees who were candidates in the last employee representative elections but were not elected, and to employees who requested the organisation of such elections.

Aside from dismissals, this protection prevents the company from imposing on these protected employees any substantial change to their employment contracts or any change in their working conditions. In addition, to dismiss a protected employee, regardless of the reason, the company must consult the works council and request authorisation from the Labour Inspection, failing which any dismissal will be deemed null and void.

A dismissal can be deemed wrongful for many reasons. Most reasons relate to:

• the unjustified nature of the dismissal, whether based on personal or economic grounds, in which case the dismissal will be deemed unfair or without “real and serious reason”; or
• the discriminatory nature of the dismissal, or the violation of regulations relating to protected employees, or the cancellation of a social plan, in which case the dismissal will be deemed “null and void”.

These different grounds for wrongful dismissal have different consequences.

Unfair Dismissal Indemnity

In the event of a dismissal without “real and serious reason”, employees are entitled to an indemnity for unfair dismissal, which is fixed by the court within a minimum and maximum amount set by a scale (also called the Barème Macron) provided by the Labour Code, which depends on the employee’s average salary and their length of service within the company.

Indemnity for Null-and-Void Dismissal

If the court finds that a dismissal was null and void, then the employee is entitled to an indemnity of at least six months of salary, without any upper limit for the judge to consider.

Cases where a dismissal can be deemed null and void are notably the following:

• violation of a fundamental right;
• dismissal in connection with psychological harassment or sexual harassment;
• dismissal pursuant to a discriminatory measure (based on gender, race, medical history, etc) or following legal proceedings brought by the employee on the basis of anti-discrimination provisions;
• following the denunciation of a crime or offence (especially if the employee is considered a whistle-blower);
• violation of requirements concerning protected employees;
• violation of the provisions concerning the protection of pregnant employees, the protection of employees during leave related to birth or adoption of a child and the protection of employees who are victims of an accident at work or occupational disease; and
• annulment of the social plan and of the related redundancy procedures.

In addition, the employee has the right to be reinstated within the company (without the employer being allowed to object), and the indemnity (of at least six months of salary) will be awarded in addition to the salary payable to the employee for the period between the dismissal and the ruling on its nullity.

Definition

The French Labour Code prohibits direct as well as indirect discrimination, ie, measures that are apparently neutral but result in a particular disadvantage for specific persons compared with others, due to discriminatory criteria. The definition of discrimination includes age, race, nationality, origins, gender, sexual orientation, marital status, handicap and disability, religion, pregnancy, home location, and trade union affiliation.

Duty of Care

Employers have a duty of care with respect to their employees’ health and safety and must provide a working environment that is free of discrimination. In particular, they may be held liable for the discriminatory actions of each of their employees, if those acts are carried out in the context of their employment, even if it was without the approval or knowledge of the employer.

Burden of Proof

An employee who alleges discrimination on the basis of one or several of the criteria mentioned above has a lighter burden of proof.

• The employee must invoke only facts likely to demonstrate discrimination.
• Conversely, the company has to demonstrate that the difference of treatment observed in the facts brought by the employee is justified by objective non-discriminatory elements.

Claims

If a company is found to have discriminated unlawfully against an employee, the Labour Court can:

• declare the discriminatory act null and void (in particular, a dismissal or a sanction); and
• order the employer to pay damages to the employee.

In addition, an employee who is repeatedly discriminated against by their employer is entitled to claim that they have been constructively dismissed, provided that they can prove that the facts are serious enough, and to claim related compensation on the grounds of unfair dismissal (ie, severance indemnity, indemnity in lieu of notice period, unfair dismissal indemnity of at least six months of salary, etc).

As per the French Criminal Code, refusing to hire an employee, or disciplining or dismissing an employee on discriminatory grounds, are also criminal offences punishable by up to three years of imprisonment and a fine of up to EUR45,000 (for the company legal representative) or EUR225,000 (for the company itself).

While procedures and discussions with the administration have become increasingly dematerialised, such as the submission of collective bargaining agreements, collective redundancy documentation or mutual termination agreements through online governmental platforms, dispute resolution in France is still a “physical” matter. Conducting court proceedings via video remains very rare and circumstantial (such as during the COVID-19 pandemic).

Relevant Courts

Individual employment disputes between employers and employees are referred to the relevant Labour Court (conseil de prud’hommes), which is a tribunal composed of judges selected by the employee trade unions and the representative employers’ organisations at a national level. A judgment panel includes an equal number of employee and employer representatives.

In addition, the Civil Court (tribunal judiciaire) has jurisdiction to hear all collective employment disputes, in particular in respect of collective negotiations and strikes, and matters concerning electoral law and elections in the workplace.

Class Actions

Since 2016, certain associations have been allowed to launch class action claims before the Civil Court in a limited number of cases, namely for the breach of provisions relating to:

• discrimination;
• health;
• environment; and
• data protection.

Such class action may seek to obtain compliance with the law and, if appropriate, the award of damages.

Representation

Representation in front of the Labour Court is not mandatory, and employees sometimes represent themselves or are represented by certified trade union representatives instead of attorneys. However, attorney representation is mandatory in front of the Court of Appeal and the Civil Court.

Alternative dispute resolution is not common practice in France. In the event of a dispute, the matter is usually referred to the courts. That being said, in practice, collective labour disputes such as strikes may be resolved by various means other than judicial proceedings, such as arbitration, mediation and conciliation, which constitute alternative dispute resolution.

• Conciliation is an optional alternative dispute resolution method for collective labour disputes whereby the parties try to reach a mutually acceptable settlement of their dispute via a third party. Conciliation takes place before a commission consisting of three members representing employees, employers and the state. This type of conciliation process must not be confused with the conciliation hearing which takes place before the Labour Court and is a part of the common judicial procedure.
• Mediation is another alternative dispute resolution method, which may be implemented following a failure of the conciliation process or upon request. Unlike the conciliator, the mediator has certain powers (to make enquiries, seek expert opinions, etc). It can be used in collective or individual labour disputes.
• Arbitration is a third alternative dispute resolution method whereby the parties entrust an arbitrator to take a decision either at law or in equity with regard to the dispute. However, case law has specified that arbitration clauses provided in employment contracts are not enforceable against individual employees, ie, employees can still choose to refer their case to the Labour Court instead, even if a clause provides for mandatory arbitration.

With respect to costs, courts in France typically order the losing party to pay for the costs of proceedings (entiers dépens).

In addition, parties usually make a specific claim for the payment of a lump-sum indemnity pursuant to Article 700 of the Civil Procedure Code, which covers their attorney’s fees and other legal fees in whole or part. In most cases, the losing party is sentenced to pay this indemnity, although its amount may be lowered if the court deems it to be too high, which it is more likely to do when the losing party is the employee.