Employment 2019 Second Edition

Last Updated August 06, 2019

France

Law and Practice

Authors



Capstan Avocats has developed in-depth skills in all areas of employment law and social protection, as one of the top firms specialising in employment law in France, throughout France and internationally. Capstan Avocats advises companies on all issues relating to the individual management of their human resources, taking into account the legal and contractual environment, developments in case law, the constraints on the activity, the company's strategy, its challenges and its social policy. The firm is also recognised for expertise in collective bargaining and labour relations, social management of M&A, restructuring and massive redundancies, health and safety, and psychosocial risks, pay, employee savings and employee share ownership, and individual and collective disputes and social security.

The labour code is generally applicable to all workers, although there are some specific provisions, especially for “cadres” (management and professional employees), and collective bargaining agreements often distinguish between categories for some benefits. The most frequently found categories, other than “cadres”, are supervisors (“agents de maîtrise”), and manual and administrative workers (“ouvriers” and “employees”).

Recent trends have been towards a harmonisation of the status of employees, whatever their category, objective reasons being required for any differentiation.

Under French law, the employment relationship is a contractual one that exists whenever a natural person personally carries out work in exchange for remuneration, in cash or in kind, in a position of subordination (ie, under the instructions and control of and subject to disciplinary action by an employer).

The standard form of contract is that of an indefinite-term, full-time employment. Other forms of contract include fixed-term contracts, part-time contracts, apprenticeship contracts, etc.

The existence of a written contract is not a condition of validity of an indefinite-term, full-time contract of employment. French law considers that the provision of a monthly payslip and a copy of the obligatory prior declaration of hiring to the social security authorities suffice to meet the requirements of the EU in this respect.

All other forms of contract must, however, be concluded in writing. It will be deemed a standard indefinite-term, full-time contract if it does not contain all the required clauses for the type of contract.

Contracts of employment must be written in French. Any terms of the contract of employment that are not in French are not enforceable against the employee.

Specific Requirements for Fixed-term Contracts

A fixed-term contract may not be used to fill a job in the long term that is linked to the usual and permanent activity of the organisation. With the exception of certain contracts involving training (eg, apprenticeships), fixed-term contracts may only be used in four instances:

  • for the replacement of an employee who is absent from his position (but not for a vacant position);
  • for a temporary increase in the organisation’s activity;
  • for jobs that are temporary by nature;
  • for the temporary replacement of the employer (eg, in the event of illness).

The duration and renewal of fixed-term contracts are also restricted, as is the use of successive contracts.

The written contract must specify its duration. It must state which of the above four instances is applicable and the relevant circumstances.

Limitations on Working Hours

The working time limits are ten hours per day and 48 hours in a given week, or 44 hours per week on average over any 12-week period, with reduced limits for night workers and for workers aged under 18. Workers are also entitled to a minimum daily rest period of not less than 11 consecutive hours in each 24-hour period, and one period of 35 consecutive hours of rest per week. With limited exceptions, the weekly rest must be given on Sundays.

In addition, workers are entitled to a break of not less than 20 minutes, if they work for more than six hours.

Failure to observe working time legislation is an offence for which the employer risks a fine of up to EUR750 for each worker involved.

In addition, the worker may be able to claim for compensation (eg, for breach of the employment contract resulting from health and safety risks).

Some flexible working time arrangements may be available for certain employees.

Arrangements applicable to all or part of the workforce may make it possible, for example, to count working time and therefore overtime over a period longer than one week (frequently a year). Working time can thus be varied at different periods of the year, or a regular schedule of more than 35 hours in each week can be compensated with days off to reduce the working time to an average of 35 hours.

Besides, managers, if they are not required to follow the company’s standard working hours and have sufficient autonomy to organise their own working time, may have their working time computed in days (instead of hours) on an annual basis (instead of a weekly basis).

The number of days worked is limited to 218 days per year (or such lower figure as provided by the applicable CBA). However, additional days, up to a limit of 235 days, may be worked at an increased rate of salary, subject to the prior consent of the employee.

An arrangement in days is only possible if regulated in accordance with the law by an applicable CBA and is subject to the express written consent of the employee and various safeguards (including limitations on the use of electronic connections outside working hours) against excessive working time.

Finally, top managers (members of the management committee or equivalent) are exempt from the rules on maximum working time and overtime.

Specific Requirements for Part-time Contracts

The contract of employment must be in writing and must specify how working time is organised, with no more than two shifts per day and no break longer than two hours. Changes in the working schedule are subject to specific rules. With limited exceptions, the statutory minimum working time is 24 hours a week, although this can be amended by an industry-wide collective bargaining agreement.

Any time worked in excess of the contractual working time must be paid at least 10% more than the employee’s usual rate.

Part-time employees have equal rights with full-time workers.

At their request, they have priority for a full-time position and the same applies to full-time workers who wish to move to part-time positions.

Parents who have completed at least one year’s service in an organisation have the right to work part time (a minimum of 16 hours a week) until their child turns 3. An employer that does not respect this right is liable for a fine of EUR1,500.

Overtime Regulations

Hours worked above the threshold of 35 hours per week (or its equivalent over a longer period, subject to conditions) are overtime hours and subject to additional payments and/or compensatory rest.

The employer may, on an occasional basis, compel employees to work overtime without their consent.

An annual quota of 220 overtime hours per worker applies, which may be modified by a collective agreement. If overtime exceeds this quota, the worker is entitled to additional individual compensatory rest.

Overtime is normally paid at a rate of 125% of normal pay for the first eight hours (ie, from 35 to 43 hours a week) and 150% beyond that (ie, over 43 hours a week). These rates may be modified by a collective agreement, with a minimum of 110%.

Minimum Wage Requirements

The mandatory national minimum wage (SMIC) is determined by the government and re-evaluated each year on January 1st (and sometimes in the course of the year). From 1 January 2019 its value is EUR10.03 per hour, making for a monthly gross wage of EUR1,522.00 on the basis of a standard 35-hour week.

Reduced rates are applicable in certain limited cases (eg, apprentices and workers aged under 18).

In addition, collective bargaining agreements provide both for a grading system for jobs and for minimum wages applicable to each grade or level. The employer must apply the minimum wage corresponding to the employee’s grade if it is higher than the national minimum wage.

A mandatory system of withholding is applicable for income tax and the employee share of social security contributions.

Entitlement to Thirteenth month, Bonuses, etc

The payment of a “thirteenth month”, most frequently with the December salary, is widely practised and is required by some collective bargaining agreements.

Other premiums and bonuses are commonly found (and often required by an applicable CBA), such as end-of-year bonus, vacation bonus, long-service bonus, etc, as well as bonuses or variable remuneration based on the employee’s performance.

These are all included in the basis for calculation of social security contributions and are taxable, as are benefits in kind.

A system of collective profit sharing (participation) is obligatory in companies with at least 50 employees and incentive (intéressement) schemes are also possible. Subject to compliance with applicable regulations (including agreement with employee representatives or a vote of employees), sums paid under such schemes may qualify for social security and tax exemptions.

Determination of the Employee’s Remuneration

The employee cannot validly waive his or her rights under the minimum wage requirements (SMIC and CBA minimum) or the principles of equal pay for equal work (which apply between all employees, whether or not there is a difference of gender) but for the rest, the parties are in principle free to determine the applicable remuneration.

However, there are some restrictions on variable pay in the banking and financial sectors, aimed to ensure variable remuneration is in relation to the risks and financial situation of the company over a sufficient period.

Vacation and Vacation Pay

Each employee is entitled to five weeks' annual leave for a year fully worked, unless a CBA provides for more.

Remuneration during paid leave corresponds to one tenth of the total gross remuneration received by the employee during the period of accrual of the vacation and cannot be less than the employee would have received if he had worked during the same period.

The following days are legal holidays in France:

  • January 1st;
  • Easter Monday;
  • May 1st and 8th;
  • Ascension Day;
  • Whit Monday;
  • July 14th;
  • August 15th;
  • November 1st and 11th; and
  • December 25th.

With the exception of essential services, May 1st (Labour Day) may not be worked. There is no statutory obligation to grant time off work on the other public holidays, although a collective agreement may provide otherwise.

Additionally, employees are entitled upon justification to paid leave for family events, such as weddings (four days for the employee’s wedding, one for the wedding of a child), deaths (five days for the death of a child, three days for the death of a spouse, parent, parent-in-law, or sibling), etc.

The applicable CBA may provide for additional days for employees with a certain length of service.

Subject to certain conditions such as length of service, an employee is also entitled to unpaid time off, such as:

  • sabbatical leave of six to 11 months;
  • leave or part-time working for a period of up to one year for the creation or acquisition of a business; and
  • participation in certain international solidarity missions.

Certain employees are entitled to defined amounts of paid time off work during working hours to perform duties, including as trade union and employee representatives, or unpaid time off for the purpose of an elected political office, such as local councillor, mayor, etc.

Required Leaves (Including Pay) for Maternity, Childcare, Illness

Basic maternity leave is 16 weeks, with increases to a maximum of 46 weeks for a third or subsequent child, or for multiple births.

Adoption leave varies from ten to 22 weeks, depending on the number of children to be adopted and the number of existing children.

During maternity and adoption leave, the employee receives compensation from the Social Security Authority (with a daily maximum of EUR87.71), but the employer may top up the salary so the employee receives the full amount. Collective agreements usually make this mandatory.

The father of a new-born child is entitled to three days’ birth leave, during which he is paid as normal by the employer.

In addition, the father or the person living with the mother may receive paid welcome leave as follows:

  • 11 consecutive days for a single birth; or
  • 18 consecutive days for multiple births.

This leave may be taken following birth leave or be taken separately. Additional leave is available if the child remains hospitalised after the birth.

Employees with more than one year’s service may take one year’s parental leave, renewable up to the child’s 3rd birthday, plus one additional year for a disabled child.

During birth and welcome leave, as well as parental leave, the employee may receive an allowance, subject to conditions, from the Social Security Authority.

Subject to justification by a doctor’s certificate, the social security authorities pay a basic sick pay during leave for illness or injury, and the employee may be entitled to a partial or total top-up payment from the employer, depending on length of service and the provisions of the applicable CBA.

In addition, unpaid leave of three to five days in a year to look after a sick child is available, subject to conditions including a doctor’s certificate justifying the absence, while, for a child who is severely ill or injured, or severely disabled, the leave may be up to 310 working days in a period of three years.

Confidentiality, Non-disparagement Clauses

Information corresponding to trade secrets (eg, secret processes) is protected by law, whether during or after the end of the employment relationship. The violation of trade secrets is sanctioned by a EUR30,000 fine and a term of imprisonment of up to two years.

In addition, the contract of employment implies a duty of loyalty to the employer, which prohibits the employee from disclosing the employer’s confidential information during employment, even if there is no express clause in the employment contract about this.

Directors and some senior employees owe a higher duty of loyalty to their employer (as "fiduciaries") and therefore bear stricter obligations of confidentiality.

If a breach of any confidentiality obligation is suspected, the main remedies for the employer are:

  • an injunction restraining the ex-employee from disclosing any confidential information; and
  • an award of damages based on the harm to the employer as a result of the employee’s breach of contract.

A non-disparagement clause, which restricts the employee’s fundamental right to freedom of speech, will only be lawful if it is necessary to protect the legitimate interests of the employer, and the restrictions it entails are in due proportion to their purpose.

Employee Liability

The employer is in principle liable for any harm done by the employee to third parties during the performance of his functions. If, however, the employee acts outside his functions without authorisation, and for purposes not related to his functions, he may be found liable towards third parties. This is also the case if he has been sentenced for a criminal offence that has caused harm to a third party.

An employee can only be found liable for harm caused to his employer if he is found to have committed an act of gross misconduct; ie, if the harm results from a very serious act or omission committed by the employee with the intention to cause harm to the employer.

Requirements for the Validity of Non-compete Clauses

Non-compete clauses, which restrict the employee’s fundamental freedom to work, are only enforceable if the employer can show that they are necessary to the protection of its legitimate interests and do not make it impossible for the employee to find work corresponding to his qualifications.

A non-compete clause must take account of the specifics of the employee’s position and be reasonable in terms of the activities that are restricted and the duration and geographical scope of the restriction.

Finally, it must provide for compensation to the employee during the application of the clause, usually at least 25% to 30% of gross monthly salary per month of restriction, or as otherwise provided by a CBA.

Enforcement of Non-compete Clauses

In the event the employee violates the terms of a valid non-compete clause, the employer is no longer required to pay the consideration under the clause. In addition, the former employer can sue the employee in the Labour Court to obtain an order for him to cease the competing activity (possibly with a fine for each day’s delay in complying with its terms) and to obtain compensation for the harm caused. The former employer is required to show that there has been actual competition by the employee and that his actions have not, during the term of the non-compete clause, been limited only to preparatory steps. The new employer may also be liable for compensation, if it can be shown that he was aware of the non-compete clause when he hired the employee, or continued to employ the employee after he became aware of the clause.

Solicitation of Employees

Commercial contracts can in principle restrict the freedom of an employer to solicit employees of another employer with a view to hiring them. However, if such a clause deprives an employee of one of the parties of the possibility of being employed by the other, he may be able to obtain compensation from his employer for the harm caused to him.

Solicitation of Customers

Provisions in contracts of employment that restrict an employee’s freedom, after the end of his contract, to solicit customers of his former employer may be re-characterised by the courts as non-competition clauses, and therefore deemed valid only if they meet the standards required for a non-competition clause.

The EU General Data Protection Regulation (GDPR) applies to all organisations that process personal data and are established in the EU, but also to all processing of personal data concerning persons residing in the EU, even if the organisation processing the data is located outside the EU, and to their subcontractors, whether located in the EU or not.

"Personal data" means any information relating not only to an identified individual but also to one who is  identifiable, directly or indirectly, by reference, for example, to an identification number (such as a social security number) or one or more factors specific to his or her identity, including names, date of birth, biometric data, fingerprints or DNA.

The organisation that processes the data and its subcontractors are responsible for respecting the data privacy requirements, including ensuring the security of the data by appropriate methods, and reporting any violation of the data.

It is prohibited to collect or process information that reveals, directly or indirectly, racial or ethnic origins, political, philosophical, religious or trade union affiliation or information related to an individual’s health or sexual orientation.

Furthermore, with limited exceptions, notably payroll processing, the use of the individuals’ National Identification number (Social Security number) remains subject to prior authorisation from the data protection agency.

The persons whose personal data is collected must be provided with full information, including the identity of the organisation responsible for the processing, the purpose of the processing, the legal basis for the processing, how long the data will be kept, whether the provision of the data they are requested to provide is optional or mandatory, how to access and correct the personal data, etc.

The individual’s consent to the data processing is not required if the legal basis for the processing is the conclusion and performance of a contract, the respect of a legal obligation, or the pursuit of the legitimate interests of the company. These bases usually cover the main areas of data processing by employers (eg, HR management, payroll, social security and tax, operational management, etc.)

The data protection agency enforcement powers include imposing penalties for non-compliance, with fines that can reach up to EUR20 million or, if higher, 4% of the organisation’s global turnover.

The employment of foreign workers – except for citizens of EU member states, European Economic Area (EEA) member states and Switzerland – is subject to them having an appropriate work permit.

Numerous types of residence and work permits exist. They are valid for periods between three months and ten years, and allow work for limited or unlimited activities.

Before hiring a foreign national already settled and permitted to work in France, the employer must apply to the regional authorities (the prefecture) for confirmation that the individual has a valid work permit for the job in question. If this is not the case, it is the employer’s responsibility to apply for a work permit. The length of this application process may vary. The employer should monitor the expiry date of the work permit to ensure the legality of the employee’s stay.

Recruitment of employees from abroad is subject to prior administrative approval, taking account of the following criteria:

  • the employment situation in the local area (unless the position to be filled corresponds to a function or a geographical area for which qualified candidates are scarce);
  • the qualifications of the candidate, which must correspond to the functions to be occupied;
  • the terms and conditions of employment, which must be comparable to those offered to local workers; and
  • the employer must show that the employee will have appropriate accommodation.

Certain professions are not open to foreigners (eg, with the exception of EU, EEE or Swiss citizens, positions as aircraft crew members, casino employees, or the civil service).

There are no specific requirements to register foreign employees with any public body.

The type and number of their work permit or equivalent document must be  recorded in the mandatory register kept by the employer of the identity, date of hire, date of termination, etc of all employees

Only around 5% of employees in the private sector are union members. However, the vote for a union by only 10% of employees at four-yearly company-wide elections of staff representatives is sufficient to ensure the union’s representativity, and give it significant rights and influence in the workplace.

For example:

  • representative unions have preferential rights to negotiate collective bargaining agreements (which benefit all employees, whether union members or not);
  • the influential works councils (Social and Economic Committee) are usually comprised principally of members or sympathisers of one or more unions, since only union-backed candidates can come forward for the first round of elections.

Several unions may be representative in a given workplace, and each may designate a union delegate. Any collective bargaining in the workplace must take place with all the representative unions.

It is not mandatory that unions or their representatives should be involved in strike action: striking is a constitutional right that can be exercised by employees with or without the support of a union. No ballot is required.

Under a reform of the employee representative system at company level, a streamlined works council, known as the Social and Economic Committee (CSE in French), is progressively replacing the various types of elected representatives that existed to date. The transition period is scheduled to be completed by 31 December 2019.

The CSE is composed of the employer, who presides over the committee, a delegation of the personnel that is elected directly by the company’s employees, and spokesmen designated by the unions.

The CSE, presided over by the employer, must meet at least every month or every two months, depending on the number of employees in the company.

The CSE’s role is essentially to express the interests of the workforce in order that they can be taken into account at all times in the employer’s organisational, operational and managerial decisions.

In companies with at least 50 employees, it monitors the economic and financial situation of the company, and is, for example, informed regularly of the company’s financial situation as well as its operations, production, order book, etc, and is entitled to receive the annual accounts. It also monitors health and safety in the workplace.

In addition, the employer is required to consult the CSE before making a wide range of decisions, including:

  • financial and legal operations, including such operations as a merger, a sale of the business as well as significant restructuring of the production, etc;
  • the introduction of new technologies into the workplace;
  • operations that have an effect on the volume or structure of the workforce;
  • redundancies (lay-offs);
  • operations affecting the conditions of work; and
  • other decisions that have health and safety implications.

The process of consultation includes provision by the employer of written information on the subject of the consultation, before a first meeting. After review and discussion of the information, including answers from the employer to any questions from the CSE during one or more meetings, the CSE expresses its “opinion” on the proposed decision. Except in a very few areas, the opinion is not binding and the CSE has no power of veto.

The process can last up to one month, extended to two months when the CSE is assisted by an expert (accountant or health and safety expert), or three months in multi-site consultations with experts.

In companies with fewer than 50 employees, the CSE has a more limited role, focused mainly on employee grievances and health and safety, with some limited consultation rights.

Failure to respect the CSE’s rights can constitute the offence of obstructing the CSE (délit d’entrave), which carries a possible fine of up to EUR7,500 (or for a legal person, a fine of up to EUR37,500).

France has an extensive system of collective bargaining agreements, which may be negotiated at company level, but also at industry-wide level.

There are numerous industry-wide agreements, each covering a given business sector. These are usually made mandatory by ministerial decree in all firms with a similar activity, whether or not they are members of the signatory employers’ association.

In addition, agreements may be concluded within a company or group, at the initiative of the unions or the employer, or in the framework of the employer’s obligation to bargain periodically on certain subjects. These include real wages, working time, promoting equality between the sexes, etc, and the management of job and career evolutions. The employer must bargain in good faith, but is not obliged to conclude.

Negotiations must normally take place with the union delegates. However, recent changes in the law have opened up possibilities for negotiation with the CSE, or directly with employees, if there are no union delegates.

When a CBA is applicable within a company, it must be applied to all employees (or, if so specified, to all employees of a given category) irrespective of whether the employee is a member of the signatory union(s) or not.

A CBA will contain provisions on the grading of jobs and corresponding minimum wages of employees, as well as benefits such as vacation, compassionate leave, non-competition clauses, health and death and disability insurance, disciplinary procedures, severance procedures and payments, etc.

In many areas, the law contains mandatory provisions constituting a framework for the provisions of collective bargaining agreements, which cannot be less favourable to employees.

However, changes in recent years have opened up greater possibilities for collective bargaining agreements to take precedent over certain statutory provisions that are specifically identified as being residual provisions.

They have also defined a number of areas in which company-level collective bargaining can result in provisions that are not at least equivalent to those concluded at industry or sector-wide level.

However, the flexibility to adapt the rules within a given company remains limited, and in many areas such as minimum wages, job gradings, certain welfare programmes and various aspects of working time, the provisions of a collective bargaining agreement negotiated at an industry or sector-wide level are imperative, and can only be altered by provisions negotiated within individual companies if the guarantees provided are at least equivalent.

Under French law, there is no concept of employment at will.

Sufficient cause is required for any termination (dismissal or redundancy) by the employer. The grounds may be related to the individual in question (personal grounds), or to the economic and financial situation of the company and its organisation (economic grounds). The employee must be informed of the grounds before a decision to dismiss is taken and in the letter notifying dismissal.

Dismissal for Personal Grounds

Personal grounds for dismissal may include reasons such as professional shortcomings, absences or late arrivals, acts of violence, insults or threats, undisciplined behaviour or disobedience, disloyal behaviour, etc. In the event of litigation, the courts assess on a case-by-case basis whether the grounds are sufficient, taking account of the employee’s functions, level of responsibility, length of service, etc.

Facts relating to the employee’s private life cannot lawfully be used as grounds for dismissal.

Dismissal Procedures

The employer must set up a ‘pre-dismissal meeting’ with the employee. The employee must be advised in writing of the meeting and its purpose at least five business days before the meeting, and may be assisted by another employee or, subject to conditions, an outside counsellor.

The employer must explain the grounds on which he is considering the employee’s dismissal and the employee can make observations. After the meeting, a thinking time of two full business days must elapse before the employer can decide and notify the dismissal. The decision must be notified to the employee in writing, by registered post and with a description of the reason for dismissal.

Dismissals for Economic Reasons (“Redundancies”)

Grounds for redundancy

Redundancies are dismissals for a reason not inherent in the individual(s), which result from a job elimination or a change to the employment contract, which must be linked to:

  • economic difficulties, characterised by the significant evolution of at least one economic factor, such as (a) a decrease in orders or in turnover, (b) operating losses, (c) an important decline in its cash position or gross operating surplus, or (d) any elements that are likely to justify the existence of the “economic difficulties”;
  • technological change;
  • winding-up of the business; and
  • a need to reorganise the company in order to protect its competitiveness – this implies that the employer should show an overall deterioration of the business’s situation and ability to face up to the challenges resulting from evolutions in the business climate, which must be identified.

If the company belongs to a group, the situation of the group must, in general, be taken into account in the reasoning.

The sale of a business (or part of a business) as a going concern will not normally constitute grounds for dismissal. Indeed, the EU Directive on transfers of undertakings requires that, subject to certain conditions, the employees assigned to a business that is transferred must also be transferred to the new owner, who must continue their contracts of employment. This is a public policy provision that cannot be set aside by the parties.

Other Requirements for Redundancies

Selection criteria

Employees to be made redundant must be selected on the basis of objective criteria, namely:

  • family status and dependants;
  • continuous service;
  • specific characteristics of the employee that may impede finding new employment (eg, age or disability); or
  • professional qualities.

Selection criteria must be assessed within a pool of all employees who have common functions and professional training, and whose roles are interchangeable.

Alternative employment within the company or group

The employer has an obligation, before making any employee redundant, to search for and propose to the affected employees any alternative positions that may be available and for which they are qualified. This obligation concerns positions within the same legal entity or any other legal entity within the same group in France.

Only when all alternative positions throughout the group have been proposed and refused by the affected employees can notice of dismissal be given.

Assistance with job-finding

Employees dismissed on economic grounds are entitled to special assistance with finding new jobs, in the form of either a four to twelve-month period of partly paid “redeployment leave” with outplacement assistance, funded by the employer, or, in the case of smaller companies, assistance as well as enhanced unemployment benefits provided by the state unemployment and job-finding office (Pole Emploi).

Procedure

The procedure for laying off a single employee is similar to the one for dismissal on personal grounds, but the thinking period between the individual meeting and the notification of dismissal is extended to seven business days, or 15 business days if the employee is a “cadre” (manager).

Collective Redundancies

The full collective dismissal procedure outlined below applies if at least ten employees are at risk of redundancy in companies with at least 50 employees. If these headcount criteria are not met, certain requirements may be inapplicable or reduced.

Consultation of the Social and Economic Committee

The consultation concerns:

  • the reorganisation itself, the reasons for it and its expected impact on the company’s financial and commercial situation;
  • the changes to the organisation and their impact on jobs, health and safety, and working conditions, including any risk prevention measures to be taken; and
  • the redundancy plan, including the proposed timings of the redundancies, selection criteria (see above) and social plan (see below).

Full information must be provided in writing to the CSE before its first consultation meeting. At least two meetings must take place over a maximum of two to four months, depending on the number of redundancies.

The CSE can designate an accountant, at the employer’s expense, to assist it during the consultation. In the event of negotiations with the unions, they too can benefit from the assistance of an accountant.

The CSE’s opinion is requested at the end of the consultation. The opinion is not binding but may be taken into account by the labour administration (see below).

The employer may choose to negotiate with the unions particularly the social plan. If an agreement is concluded, this process may substitute, in part, for the consultation with the CSE.

In any case, the consultation/negotiation process substitutes for the individual meeting with affected employees, if the number of potential dismissals is equal to at least ten.

If the redundancies would lead to the closure of the site, the employer must take specific steps to look for a purchaser and keep the CSE informed.

Social Plan

The social plan must contain measures (in addition to severance pay in accordance with the law or applicable CBA) to support employees in finding and integrating new positions (within the company or group, or outside it). These include, for example, training, support with geographical mobility, redeployment leave (see above) and outplacement, advice and financial support to employees wishing to start their own business, etc. The extent of the measures to be included in such a plan depends on the size and the financial means of the company or group, but it is fundamental that these measures should be sufficient in order to obtain the labour administration’s approval of the plan (see below).

In addition to the social plan, larger companies (at least 1,000 employees in the company or group throughout the EU) may be required to take measures contributing to the preservation and/or creation of employment within the local area, or to make a financial contribution of up to four times the monthly minimum wage (SMIC) multiplied by the number of employees made redundant.

Approval by the Labour Administration

Once the consultation is complete, as well as any negotiation that may have taken place, final redundancy and social plans that take account of the consultation with the Social and Economic Committee and any majority agreement reached with the unions must be submitted to the local labour authorities for approval. The approval can be refused in the event of any irregularities or if the social plan is assessed as inadequate.

Once the administration’s approval has been obtained, the employer may proceed with the reorganisation and dismissals, in accordance with the provisions of the social plan.

Employers must give their employees prior notice of the termination of their employment contract, whether for personal or economic reasons.

For employees with at least two years’ service, the legal minimum notice period is two months, but the applicable CBA may provide for more, particularly for managers and executives (usually at least three months).

However, no notice is due if the employment contract is terminated for serious misconduct (faute grave) or gross misconduct (faute lourde).

An employer may decide to release the employee from working the duration of the notice period and to pay him in lieu of notice.

Severance payments

Severance pay is due to all employees whose contract is terminated by their employer for economic or personal reasons after at least eight months of service, unless the termination is for serious or gross misconduct.

Unless a higher amount is provided for by the applicable CBA, severance pay is at least equal to one quarter of the average gross monthly remuneration for each of the first ten years of service, and one third of the same average for each year in excess of ten.

Dismissal for serious cause is possible in the event that misconduct by the employee is sufficiently serious (“serious misconduct”, or faute grave) to make it impossible to continue the performance of the contract of employment, even for the limited time of the notice period. In exceptional cases, where it can be shown that in his misconduct the employee intentionally caused harm to the employer, the dismissal may be for “gross misconduct” (faute lourde).

In the event of serious cause, the procedure for dismissal on personal grounds remains applicable. However, it is possible to suspend the employee without pay during the procedure (until the final decision is notified to him).

No notice is applicable, and no severance payment is due to the employee.

In the event of gross misconduct, the employer may be able to obtain indemnification by the employee of the harm wilfully caused to him by the gross misconduct of the employee.

It is necessary to distinguish termination agreements, by which the parties agree to put an end to the employment relationship, and settlement agreements, by which the parties agree on a waiver of claims in connection with such relationship.

Individual Termination Agreements

An agreement between an employer and an employee on providing for the termination of the contract of employment between them is valid, subject to strict rules. The process required includes:

  • one or more meetings between the parties to negotiate the agreement;
  • conclusion of the agreement on an official form;
  • respect of a 15-day “cooling off” period, during which either party can withdraw from the agreement; and
  • obtaining approval of the agreement from the local labour authorities.

A severance payment at least equal to severance payment due on dismissal is mandatory. In practice, the amount negotiated is often significantly higher.

Collective Termination Agreements

Following the recent employment law reforms, the employer and the majority unions within the company can conclude an agreement defining a framework for purely voluntary departures of employees.

The agreement must define the maximum number of voluntary departures, the conditions to be met by the volunteers, the period during which they may come forward, the method of selection if there are too many volunteers, the severance payments to be made and a series of measures (similar to those in a social plan) designed to support employees in their search for alternative employment, creation of their own business, etc.

The employer must commit to making no redundancies throughout the duration of the plan, which can only be implemented once it has been approved by the labour administration.

Enforceable Releases

An enforceable waiver of action can only be obtained in the context of a settlement agreement, concluded after the termination of the contract of employment has been notified.

The agreement must describe the reasons why the termination is contested or potentially contested, and must provide for concessions to be made (eg, payment of compensation) to the party making the claim, over and above the rights he or she would have had in the absence of a dispute, in exchange for a waiver of action.

Protection against Dismissal due to Maternity or Illness

Employees cannot be dismissed during sick leave as a result of an accident at work or an industrial disease, during pregnancy, maternity leave and the ten weeks following their maternity leave (with very limited exceptions).

If an employee is certified as being unfit for work by the company doctor, they may be dismissed only after the employer has made every effort to find them suitable alternative work or to adapt their original position and can show that he has been unable to do so.

Protection against Dismissal for Employee Representatives

Employees with employee representative functions, including members of the CSE and union representatives, are protected against discrimination and retaliation by their employer. For example:

  • their consent is required for a broader scope of changes in their terms of employment than for other employees; and
  • termination of their contract of employment by the employer, whatever the form or the reason, is subject to prior consultation of the CSE and a prior written authorisation for the termination from the local labour authorities.

Litigation by employees against their employers is quite frequent, and litigation may involve claims in respect of termination, but also for payment of unpaid wages, bonuses, overtime, etc, or claims for re-grading in accordance with the applicable CBA, etc.

Claims for Unfair Dismissal

The most frequent type of claim in front of the labour courts is for unfair dismissal; ie, dismissal without real and serious cause. Such claims can be brought whatever the reasons for dismissal: including disciplinary and performance-related dismissals, lay-offs, etc.

The employer must be able to prove the facts and grounds outlined in the written notification of dismissal and to show that they demonstrate the existence of a sufficient cause. Any doubt benefits the employee. If no reason is indicated in the dismissal letter, or if the dismissal is not notified in writing, it will automatically be unfair.

The usual remedy for unfair dismissal is an award of compensatory damages.

Their maximum amount ranges from one to 20 months’ remuneration, depending on length of service.

In addition, the employer can be required to reimburse to the unemployment authorities the cost of up to six months’ worth of unemployment benefits.

Reinstatement normally requires the consent of the parties. However, reinstatement can be ordered by the court at the employee’s request in certain limited cases:

  • where the dismissal is discriminatory;
  • where the dismissal was made in violation of the protective provisions applicable to certain employees due to their particular characteristics or situation (eg, employees who are pregnant or on maternity leave, employees who are absent due to an accident at work or industrial disease); and
  • where the dismissal was subject to a specific administrative authorisation that was not obtained or was subsequently annulled by a court decision (eg, dismissal of union representatives and other employee representatives, collective redundancies).

In addition to reinstatement, the court will in such cases order the payment of the remuneration due between the date of the employee’s eviction and the date of reinstatement.

The employee can, nonetheless, opt for a claim for compensation rather than reinstatement, and if necessary to be made whole in respect of the notice and severance payments he should have received, etc.

Claims for Constructive Discharge

In the case of misconduct or non-compliance by the employer with his obligations – eg, if he fails to pay salary, or to provide work to the employee, or harasses the employee morally or sexually – the employee may claim that this has forced him to resign. The labour court may rule that the contract has been terminated by a de facto dismissal, and  award compensation for unfair dismissal.

Other Claims for the Performance of the Contract

Employees may make claims in respect of the performance of the contract of employment or of the CBA, including claims for a regularisation of their grading under the provisions of the CBA, claims in respect of unpaid wages, bonuses or overtime, equal treatment, etc.

Under the principle of equal treatment, an employee can make a claim for an alignment of his or her remuneration or benefits and for back pay or compensation if he or she can show that a colleague has a higher salary or better benefits, unless the employer can show that there is an objective and pertinent reason for the difference.

In the case of non-compliance by the employer with the rules on fixed-term or part-time contracts (including the mandatory inclusion of certain terms in the written contract of employment) the employee may claim for a re-characterisation of the contract as a full-time or indefinite-term one, as the case may be, as well as back-pay and/or compensation for any harm caused by the wrong characterisation and its consequences.

Grounds for Discrimination

The following characteristics are protected by anti-discrimination law:

  • origin;
  • gender;
  • lifestyle;
  • gender identity and orientation;
  • age;
  • marital status;
  • pregnancy status;
  • genetic characteristics;
  • actual or supposed membership of an ethnic group, nationality or race;
  • political opinions;
  • union activities;
  • religious beliefs;
  • physical appearance;
  • name;
  • home address;
  • health status;
  • disability;
  • the individual’s state of dependency; eg, due to age, illness, etc;
  • vulnerability linked to actual or supposed financial situation;
  • ability to speak languages other than French; and
  • banking domiciliation.

It is possible to treat an individual differently on the basis of a protected characteristic if that characteristic is an occupational requirement because of the nature or context of the work. The employer must show that applying the requirement is a proportionate means of achieving a legitimate aim.

A similar exception is available for religious organisations, but is only relevant to a narrow range of jobs.

Finally, it is possible to treat someone differently on age grounds, provided that the treatment is justified. This means it must be a proportionate means of achieving a legitimate aim.

An employer is liable for the discriminatory acts or harassment by its employees whether or not it knew or approved of them, unless it has taken all reasonable steps to prevent the employees committing such acts.

In addition to the prohibition of discrimination in relation to the characteristics listed above, under French employment law, employees are entitled to benefit from equal treatment if they are in a comparable situation with respect to a particular benefit.

Burden of Proof

In respect of discrimination, the burden of proof is shared.

An employee who considers that he has been the victim of discrimination must present factual elements that suggest the existence of direct or indirect discrimination.

The employer must then demonstrate that the situation or his decision is justified by objective elements, independent of any discrimination.

Relief Damages

If a claim for discrimination, harassment or victimisation is successful, the labour court could rule that each discriminatory decision taken (eg, to dismiss the employee) is void.

The employee can choose freely between a claim for reinstatement or for compensation and is subject to no obligation to mitigate his loss.

In the case of pay discrimination, the employee is entitled to a salary adjustment for the future, and to compensation for the harm caused by the discrimination since it began.

Similarly, if the employee has been denied promotion, time off, or other benefits as a result of the discrimination, the employer will be ordered to grant the promotion or benefit, as well as to pay compensation to the employee.

The employer may, in parallel, be prosecuted for the offence of discrimination. Sentences for a natural person can reach three years’ imprisonment and fines of up to EUR45,000, while fines of up to EUR225,000 are applicable to legal persons, with possible additional measures such as exclusion from public tenders, restrictions on the company’s activity, etc.

Specialised Employment Courts

Disputes between employers and their employees are heard before specialist labour courts comprised of a panel of elected lay judges representing employers and employees. Decisions by the labour court may be appealed and heard before a specialist section of the appeal court comprised of professional judges. Finally, the parties can take the case to the Court of Cassation, but only on a point of law.

Disputes between the employer and employee representatives are heard before the ordinary civil courts.

Disputes relating to the validity of collective redundancy and social plan are heard before the administrative courts. If the administrative court finds that the procedure and resulting social plan are null and void, any resulting individual claims are heard before the labour courts.

Class Action Claims

Class actions were introduced into French law only in 2016, and are limited to claims in respect of discrimination and data privacy. They are subject to stringent conditions, and are rarely used.

Suit by a Union on Behalf of an Individual

For certain claims, notably relating to discrimination, equal pay, bullying and sexual harassment, claims in connection with redundancies and mis-use of a fixed-term contract, unions can bring suit on behalf of an employee. The employee must, in some cases, consent to the action, and in others, can object within 15 days of being informed of the union’s intention.

Representation in Court

In the labour courts, representation of the parties is not obligatory.

If the parties so wish, they can choose to be represented by an attorney, or:

  • by an employee or employer occupied in the same sector of activity;
  • by a union defender;
  • by their spouse, partner, or civil partner; or
  • by a duly empowered member of the company or site.

Before the appeal courts in labour matters, representation by an attorney or by a union defender is required.

Arbitration

Arbitration is not allowed, as the labour courts have exclusive jurisdiction in respect of disputes between employers and employees. Pre-dispute arbitration clauses are not valid and cannot be enforced.

Other Forms of ADR

The standard procedure before the labour court comprises an initial conciliation phase intended to obtain an agreement between the parties before any examination of the case on the merits. This aim is rarely achieved.

In addition, mediation is possible, subject to the consent of both parties. If the parties reach agreement, they can submit their agreement to the court to be officially ratified.

A contractual dispute resolution procedure before any suit is brought by either party is also available. This procedure takes place according to the rules defined in writing by the parties, and mandatorily involves the participation of their lawyers. If the parties reach agreement, they can submit their agreement to the court to be officially ratified. In the absence of agreement at the term of the procedure as defined by the parties, either party may bring suit.

The courts can award attorney’s fees to the prevailing party. In practice, such awards (which do not necessarily cover the full amount of the attorney’s fees) are more frequently made to employees than to employers, and in higher amounts.

Capstan Avocats

83, rue La Boétie
75008 Paris
France

+33 14 495 4800

info@capstan.fr www.capstan.fr
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Law and Practice

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Capstan Avocats has developed in-depth skills in all areas of employment law and social protection, as one of the top firms specialising in employment law in France, throughout France and internationally. Capstan Avocats advises companies on all issues relating to the individual management of their human resources, taking into account the legal and contractual environment, developments in case law, the constraints on the activity, the company's strategy, its challenges and its social policy. The firm is also recognised for expertise in collective bargaining and labour relations, social management of M&A, restructuring and massive redundancies, health and safety, and psychosocial risks, pay, employee savings and employee share ownership, and individual and collective disputes and social security.

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