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Forums For Adjudicating Employment Disputes

All lawsuits arising from a dispute relating to an employment agreement must be brought before a French Labour Court, i.e. “Conseil de Prud’hommes”. The judges are non-professional, being specified that half of them are elected by the employers and the other half by the employees.

The judgments of the French Labour Court may be appealed before the Court of Appeal.

If the employer has been ordered to pay a provisional payment of salaries by the French Labour Court, he/she will have to make the payment even if a party has appealed this judgement.


The Main Sources Of Employment Law

All employment matters are governed by European Law, the French Labour Code, Collective Bargaining Agreements, company rules (ie Company level agreement, policy rules…), individual employment contracts, custom of a profession (“usages”) and local practice and lastly case law.


National Law And Employees Working For Foreign Companies

French law will be applied if the employment agreement provides for its application. Even if the agreement does not so provide, the French Public Policy Rules will still apply, pursuant to the Rome I Regulation (593/2008/UE).

French law will also apply if there is no applicable law mentioned in the contract, as long as the work is performed in France.

The contractual law set forth under the terms and conditions of the employment agreement, must not contradict the French public order.


National Law And Employees Of National Companies Working In Another Jurisdiction

The parties are free to maintain the application of French law to French employees working in a foreign country.

If nothing has been provided for in the employment contract, the usual place of performance of the work will determine the law governing the contract.


Data privacy

In accordance with the law "Informatique et Libertés" of 6 January 1978 as amended and the European Regulation n ° 2016/679 / EU of 27 April 2016, the employee must be informed that, within the framework and during the duration of his/her employment contract, his/her personal data may be collected, stored, used, transferred and more widely processed for legal, administrative or managerial reasons.

The employee has a right to access to all personal data concerning them and, according to the French law of January 6, 1978 related to protection of personal data, the employee has a right of rectification of their data.

In addition, for the compliance of a system involving the processing of personal data, the company has a number of tools provided for by the RGPD, some of which are mandatory, these are:

    —the appointment of a data protection officer (DPO), which is mandatory in certain cases;
    —the keeping of a register of processing activities, by the controller and its subcontractors for companies with more than 250 employees and sometimes for companies with less than 250 employees: this register must be made available to the CNIL at its request;
    —the implementation of an impact analysis, when a processing of personal data is likely to generate a high risk for the rights and freedoms of the persons concerned;
    —the possibility for the company to adhere to codes of conduct or to obtain certification from the CNIL or authorised bodies.

The CNIL (French authority of control) carries out a control of the compliance of the processing carried out by the company with the law and European law. It has the power to investigate and impose sanctions in the event of infringement.

Legal Requirements As To The Form Of Agreement

The employment contract is generally in writing, in order to avoid any misunderstanding as to its terms. Furthermore, it is mandatory, according to the French Labour Code that some provisions have to be made in writing.


Mandatory Requirements
  • Trial Period
  • If the Company or the employee wants to provide a trial period, it must be provided for in the employment contract. It is limited in terms of duration, between two and four months (for executives only), depending on the function of the employee (blue-collar, supervisory staff or executives). The trial period is renewable under specific conditions and needs the employee’s approval in writing.

  • Hours Of Work
  • Full time

    The legal weekly working time is 35 hours. This weekly working time can be exceeded subject to the execution of an individual agreement between the employer and the employee in the respect of law.

    This working time can also be exceeded through a company’s agreement signed by the employer and the company’s trade union(s) representative(s). However, even if a company agreement exists, individual agreements between the employers and the employees may be required.

    The hours of work may be distributed either from Monday to Friday, or Monday to Saturday, depending on the activity.

  • Special Rules For Part-time Work
  • Under French law, the employment contract can be concluded as a part time contract provided it is specified that the duration of work cannot be less than 24 hours per week (unless the collective bargaining agreement provides an exception, or unless the employee asks for an override).

    In the event of a failure to respect this level, the employee could claim an adjustment of his/her salary, based on full time.

    Autonomous managers

    Provided that a collective agreement on day-per-year scheme (“forfait annuel en jours”) exists within the Company, the working time of autonomous managers or autonomous employees who are independent in the organisation of their work schedule may be counted in days and not in hours within the limit of 218 days per year unless the parties agree to exceed this threshold.

  • Earnings
  • A minimum salary (“S.M.I.C.”) is fixed each year, below which an employee cannot be hired.

    Collective Bargaining Agreements may also provide for minimum salaries that may be higher.

  • Holidays/Rest Periods
  • Employees are entitled to a minimum of 2.5 working days holiday per month. They may benefit from paid vacation days from the first month of their employment.

    During the above mentioned legal weekly working time, employees must have a minimum of:

      1. 20 minutes of rest for 6 hours of work.
      2. 11 hours of rest between 2 days of work.
      3. 35 hours of rest per week.

  • Minimum/Maximum Age
  • The minimum working age is 16 years old and the maximum age to retire is now 70 years old. However, employees are free to retire as soon as they may be entitled to a retirement allowance. From the age of 65, the employer may suggest that the employee considers retirement but may not automatically place him to do so.

  • Illness/Disability
  • The French Labour Code provides requirements relating to “professional” illness and disability.

    These requirements are more constraining than those provided for in cases of “regular” illness or disability and impose binding procedures on the employer.

    It is forbidden to dismiss an employee because of his/her illness, which constitutes discrimination.

  • Location Of Work/Mobility
  • The employer must specify in writing the employee’s normal place of work. Mobility clauses can be included in the employment contract but cannot be used by the Company in bad faith.

    Constraining mobility clauses are valid only if they are justified by the needs of the business, if they clearly define their geographical limit at the date of hiring, and if they do not interfere with the employee’s right to a family life.

  • Pension Plans
  • The employer must contribute to a general pension plan for the employee.

    Complementary retirement insurance must also be provided for if the employee is an executive.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
  • The French Labour Code provides for parental rights, notably maternity/paternity/adoption, parental leave and pay and notably for a specific protection against dismissal if the termination of the employment contract is liable with this leave.

    These types of leave suspend the employment agreement. When the employee returns to the Company, he/she must be assigned to the same position as before he/she left, or to a similar position.

    Paternity leave is protected in the same way as maternity leave, specifying that the father cannot be dismissed within one month from the birth of his child, except for a grave misconduct or the impossibility to maintain his functions.

    Failing to demonstrate the necessity to dismiss the employee, the Company is exposed to the invalidity of the dismissal.

  • Compulsory Terms
  • The title of the employee, the duration of the notice period and the relevant Collective Bargaining Agreement must also be provided for in the employment agreement.

    For employees working abroad, the contract must specify the applicable social security regime, the provisions of the Collective Bargaining Agreement applicable during the posting abroad, compulsory provisions of the law of the country where the employee is working, and the conditions of the return to France.

  • Non-Compulsory Terms
  • Other terms can be provided for in the employment contract, as long as these provisions are at least as favourable to the employee than the law or the relevant Collective Bargaining Agreement would be favourable to the employee than the law or relevant Collective Bargaining Agreement would be.The terms can be provided for in the employment contract, as long as these provisions are at least as favourable to the employee than the law or the relevant Collective Bargaining Agreement would be.


Types Of Agreement

French labour legislation favours indefinite term employment contracts (target bonus, non-compete, confidentiality, loyalty etc.). But, other types of contracts exist, such as fixed term employment contracts, part time employment contracts, and contracts for agency work and for apprenticeships.

Specific contracts must be made in writing, on the day employment starts at the latest. They must bear specific compulsory provisions to be applicable. Failing to do so, those employment contracts may lead to economical sanctions for the employer and may be upgraded to an indefinite term employment contract.


Secrecy/Confidentiality

There is a general obligation of confidentiality during and after the employment contract even if there is no written clause in it. This obligation concerns the employer’s commercial and business information as well as know-how.


Ownership of Inventions/Other Intellectual Property (IP) Rights

There are legal provisions in the French IP Code as well as in most Collective Bargaining Agreements relating to IP Rights.

Generally, inventions made by an employee will belong to the employer if they fall within the employee’s job description.


Pre-Employment Considerations

The recruitment process assumes that the employer first defines the characteristics of the position to be filled according to his/her needs (notably the nature of the job to be filled, the level of skills and qualifications required of the future employee, any special arrangements for organising working hours; the possible existence of incentives or aid for hiring).

Before starting the recruitment procedure, the employer should check that there are no employees who need to be rehired, reinstated or even reclassified (employees with employment priority, disabled employees, pregnant employees etc.).

In addition, the employer must ensure that he/she does not contravene certain protective measures concerning certain employees (women, young people, trainees etc).


Hiring Non-Nationals

French citizens do not need a work permit to be hired in France. No work permit is required to hire EU nationals.

Non-EU citizens must apply for a work permit.

The employer must check that the foreigner has a valid permit to work in France.


Hiring Specified Categories Of Individuals

Companies with over 20 employees must ensure that disabled people constitute at least 6% of the total staff (after one year).

People under 18 years of age cannot work at night.

Pregnant women cannot occupy dangerous jobs.


Outsourcing And/Or Sub-Contracting/Temporary Agency Work

There are legal provisions relating to subcontracting which mean that the employer has to apply the same rules regarding salary, work at night, safety rules and maternity rights to all detached/outsourced employees.

Changes To The Contract

Employers are allowed to make amendments to the employment contract, provided that these changes can be justified, either on personal or economic grounds.

There are two categories of changes that can be made to the employment contract:

    1. Changes regarding the working conditions may be imposed to the employee and therefore do not require the employee’s prior consent. If an employee objects to the changes, the employer may consider instant dismissal.
    2. Major modifications have to be accepted by the employees (qualification, compensation, functions etc.) before being implemented. If an employee objects to the changes, the employer can either continue the contract under the initial terms or terminate the contract on notice (see definition below).

In both cases, a modification addendum to the employment contract must be executed by the parties.


Change In Ownership Of The Business

The French Labour Code provides for an automatic transfer of the individual contracts to the new employer. All the obligations and benefits related to the individual contracts are transferred.

The Social and Economic Committee (staff representatives) of the concerned companies need to be consulted prior to the transfer. Failing to comply with this, companies expose themselves to an offense of obstruction which is sanctioned by a civil fine of €7,500.

Each affected employee must be individually informed in writing.

If there is a major modification to the employment contract (change of functions, salary, place of work etc) at the time of the transfer, the employees are allowed to refuse them.

In case of termination of the employment contract, the employer may be found liable notably due to fraud to the automatic transfer and pay the relevant indemnities.


Social Security Contributions

Social Security Contributions are paid both by the employer and the employee and are aimed at financing the allowances paid to the employees, such as sick pay, maternity pay and unemployment allowances.

The employees pay approximately 22% of their monthly gross salary as part of the contribution and approximately 50% of the employees monthly gross salary will be paid by the employers as their part of the contributions

In the case of illness and maternity, employers are required to contribute towards allowances payable to employees, depending on the provisions of the relevant Collective Bargaining Agreement.


Accidents At Work

Employers have a duty to ensure the safety of their employees and are liable for any failure in such respect. Employers are also responsible for torts caused by the acts of their employees when the employees were acting in the course of their employment.

The French Labour Code provides for a prohibition against terminating the employment agreement in cases of an accident at work.


Discipline And Grievance

Discipline and grievance issues are provided for in the French Labour Code.

Companies with at least 50 employees must implement internal rules outlining the disciplinary procedures.


Harassment/Discrimination/Equal pay

The French Labour Code deals with:

    1. Sexual and moral harassment. Moral harassment can be defined as actions which tend to deteriorate the working conditions and thus the health of the employee. Recent case law has ruled that as long as the employee has brought a claim for harassment, the burden is on the employer to provide evidence that there was no harassment.
    2. Protection against discrimination based on any element of the employee’s personal life (sex, age, race, religious opinions). The French Government created the HALDE, replaced in 2011 by the “Défenseur des Droits”, to deal with discrimination claims of individuals.
    3. Equal pay principle. Since 2009, French law provides for negotiations in companies with regards to equal pay between men and women.

Compulsory Training Obligations

Employers have a general obligation to train their employees so that they can perform their function adequately.

Moreover, the French Labour Code provides that each individual benefit, from the moment they enter the work market and regardless of their status, from a training personal account (CPF).

The personal account of an employee is credited with €500 per year of work within the limit of €5000.


Offsetting Earnings

Employers may offset earnings against employees’ debts. The French Labour Code limits such offsetting to 10% of the salary.


Payments For Maternity And Disability Leave

The French Labour Code provides for payments for maternity and disability leave in order for the salary to be maintained.

The duration and amount of these payments depends on the Collective Bargaining Agreement.


Compulsory Insurance

By paying social fees, employers are insured in case of receivership procedures or judicial winding-up. In such case, salaries will be paid by the French Administration.


Absence For Military Or Public Service Duties

Public service duty no longer exists in France.


Staff representatives or Trade Unions

Under the French Labour Code, companies with over 11 employees must establish a Social and Economic Committee (“CSE”). The number of representatives depends on the number of employees in the Company.

Social and Economic Committee is informed and consulted on general business issues affecting employees and they can also be consulted through exceptional meetings if need be (the attributions are not the same depending on the workforce of the company. They are much more important in companies with at least 50 employees).

Only companies with over 50 employees are concerned by trade union delegations. A union’s delegation can exist if at least 2 employees joined a trade union.

Trade unionists may be appointed if they obtained at least 10% of the votes at the first-row round of the professional election.

There is a specific protection for employees involved with such representation in order to prevent discrimination in the performance of their duties: in particular, their employment agreement cannot be modified without their consent, and their employment cannot be terminated unless the Labour Administration has authorised such termination.

Moreover, all such employees are entitled to delegation hours (that is to say, hours paid by the employer to perform such functions, even during working time).


Transfer of business

From now on, each Company that is considering selling its business, needs to inform its employees of the sale if there are no representatives within 2 months before the sale and at the latest before the information of the Social and Economic Committee if there are representatives.

Failing this, a maximum civil fine of 2% of the value of the sale may be imposed.


Employees’ Right To Strike

The right to strike exists, subject to limits concerning public services. For private companies, this right is granted subject to an abuse of power duly acknowledged in Court.


Employees On Strike

Except in cases of a gross offence such as violence or destruction of company equipment, the employer cannot fire employees who are on strike as it is a fundamental right. Employees on strike cannot be replaced by employees with a fixed term contract either.

With regards to security issues, the employer is liable for damages caused by an employee to another.


Employers’ Responsibility For Actions Of Their Employees

Employers are responsible for the actions of their employees under the French Civil Code. However, the employer will not be liable when the employee acts beyond the scope of his duties.

Procedures For Terminating the Agreement

Both the employer and the employee can terminate the employment contract.

The employer must follow specific procedures to terminate the employment contract but these procedures differ depending on the ground for termination (i.e. whether it is a personal or economic ground). The grounds for termination must be duly justified in the termination letter.

In most cases, there are certain minimum steps which must be followed before termination to avoid a lawsuit for unfair dismissal, such as: inviting the employee to a preliminary meeting and providing notice of the termination by registered mail letter within certain time limits.


Instant Dismissal

Instant dismissal may be carried in cases of gross or serious misconduct, but even in such a case, the employer has to follow the correct procedure (see above).

Such procedure implies the compliance to strict time limits.

The employee is deprived of any dismissal indemnity, and any notice period.


Employee's Resignation

Employees may resign but have to respect a notice period. The resignation does not entitle the employee to unemployment allowances.

French case law also provides that the employee is entitled to an “instant resignation” in cases of gross misconduct by the employer.


Termination On Notice

Termination on notice is possible if the procedure is respected. The notice depends on the type of professional qualification held by the employee, and varies between one and three months.

The notice period can be executed or not, depending on the employer’s will. Even if the employer does not want the employee to work during the notice period, the salary during this period must be paid (payment of an indemnity in lieu of notice).

The notice period may be extended by consent of both parties.


Termination By Reason Of The Employee's Age

An employee can be obliged to retire once he/she reaches the age of 70.


Automatic Termination In Cases Of Force Majeure

In very exceptional cases, “force majeure” can terminate the contract, provided three cumulative conditions are met: (i) the event is not foreseeable, (ii) it could not have been avoided and (iii) it is outside the control of the employer.

In practice, courts rarely apply force majeure.


Collective Dismissals

See the part on specific rules for companies in financial difficulties (in France only economic difficulties can justify collective dismissals).

However, it should be noted that employers can use other schemes to reduce the workforce without resorting to or limiting the use of dismissal (voluntary redundancy plan, collective amicable termination). These measures are strictly regulated and can be implemented by collective agreement or unilateral decision of the employer validated by the labour administration.


Dismissal without real and serious cause

Often, when an employee is dismissed, he/she seeks to obtain before the labour court the reclassification of their dismissal as a dismissal without real and serious cause.

When this request is made, it is important to know that in France, there is a scale (“Barème Macron”) that allows the employer to determine in advance the amount that they will be required to pay the employee in the event of dismissal without real and serious cause. This amount is determined according to the employee's seniority and the company’s total headcount (it may vary between 1 month and up to 20 months’ salary).

In addition, when the employee requests the nullity of his/her dismissal (due to moral/ sexual harassment, discrimination surrounding the termination of his/her employment contract), this specific scale does not apply.


Termination By Parties’ Agreement

Employer and employee can decide to terminate their employment contract through the scheme of termination by mutual consent (“rupture conventionnelle”). This process, which allows the parties to terminate the employment contract without any dismissal procedure and without alleging any ground, entitles the employee to unemployment benefits.

This method of termination can also be collective and apply to several employees at the same time.

In any case, this scheme is also regulated by strict time-limits.


Directors Or Other Senior Officers

If the company’s bylaws allow it, when an executive officer of the company (e.g., directors, chief executive officer, member of the board of directors, General manager, president of the board etc.) is being dismissed, unlike an employee, he/she can be dismissed instantly and without any obligation on the company to either justify any grounds for dismissal or pay any indemnity.

French law does not consider executive officers to be employees. Therefore, disputes are brought before the Commercial Courts.

In some instances, executive officers may cumulate their corporate office with an employment contract. In that case, corporate office and employment contract comply with their own rules. Therefore, the termination of the corporate office should have no consequences on the employment contract and vice-versa.


Special Rules For Categories Of Employee

Approval from the French Labour Administration is necessary to dismiss an employee representative. Termination by consent must also be approved by the French Labour Administration.

Employee representatives, works council and trade union members: termination must be authorised by the French Labour Administration;

Pregnant women and women on maternity leave: termination is not possible except in cases of gross misconduct or absolute necessity to terminate;

Sick employees: termination is not possible on the grounds of illness except in cases where the absence of an employee is harmful to the company and provided the employment guarantee (minimum duration under which the contract must be maintained) provided for by the Collective Bargaining Agreement is respected.

Employees with a fixed term contract: termination is not possible except in cases of an agreement between the parties, gross misconduct, force majeure, if the employee is offered a contract for an indefinite term or in case of physical incapacity.

Professionalization contracts, which are linked to the employee’s studies, cannot be terminated except in cases of gross misconduct.


Whistleblower Laws

The principle of non-discrimination in the recruitment procedure is extended to whistleblowers who take the risk of denouncing certain serious facts of which they have become aware in the performance of their duties to their employer or to administrative or judicial authorities or to third parties.

The whistleblower may not be excluded from a recruitment procedure or from access to an internship or a period of professional training. Nor may he or she be subject to any sanction, dismissal or discriminatory measure because of his or her report.


Specific Rules For Companies in Financial Difficulties

There are specific rules which apply in case of financial difficulties.

First of all, there are different levels of financial difficulties, which may lead to two solutions:

    1. the continuation of the activity: in such case, redundancies are made by the legal representative of the company;
    2. in case of a winding up of the company, the legal representative is no longer in charge and a liquidator is appointed by the judge. In such case, redundancies are made by this liquidator.

In both case, redundancy rules have to be applied.

These rules are quite complex.

Redundancies must be made under a real economic and financial ground. This economic and financial ground is difficult to assess in general because court decisions regularly add criteria.

The procedure to be enforced depends on the number of employees in the company, the number of employees to be made redundant, the presence of employees’ representatives.

Pursuant to those criteria, different obligations have to be fulfilled, and delays to enforce the redundancies may change.


Special Rules For Garden Leave

Under French law, except for gross negligence or misconduct, the employee is entitled to notice in the event of termination of the employment contract. Such notice period may or may not be executed at the request of the employer or the employee.

    —When the employee carries out his/her duties during the notice period, he/she is paid normally,
    —When the employer requests an exemption, the employee is entitled to a compensation in lieu of notice,
    —When the employee requests an exemption, the employer is under no obligation to pay him/her.

In any case, the employer has the possibility of "neutralising" the employee from the very beginning of the employment contract by specifically stipulating in the employment contract a non-compete, non-solicitation or non-poaching clause.


Restricting Future Activities

It is possible to include in the contract a non-compete clause upon termination, to protect the interests of the Company.

Such clauses must be limited in terms of territory, duration of time (maximum of 2 years) and scope, and must also provide for a financial compensation to be paid to the employee after the termination of the employment agreement (generally between ¼ and ½ of the monthly salary, depending upon the Collective Bargaining Agreement, or the contract) for the duration of the restricted period.


Severance Payments

Severance payments are calculated according to the Collective Bargaining Agreement or the law, depending on the seniority of the employee, the age of the employee and if more favourable, the terms of the contract.


Special Tax Provisions And Severance Payments

No social charges are charged on severance payments which are less than 82,272 euros (for 2021) or 2 years of salary. Such payments will bear a 9,7% tax (CSG / CRDS) beyond the amount of the legal severance payments due to the dismissed employee. If the amount of severance indemnities exceed the overall amount of 411,360 euros (for 2021), social charges are charged on the total amount.

Due to covid-19, the social security ceiling is maintained at its 2020 level.

In case of termination of the employment agreement by mutual consent, no social charges are charged in the above limits except a specific one of 20 % called “forfait social” to be paid by the employer.


Allowances Payable To Employees After Termination

Employers are not required to contribute to any allowances payable to employees after termination.


Time Limits For Claims Following Termination

For claims relating to the performance of the employment contract there is a time limit of 2 years.

For claims relating to the termination of the employment contract there is a time limit of 1 year.

Claims relating to the payment of salaries must be brought within 3 years.

Specific Matters Which Are Important Or Unique To This Jurisdiction

In France, due to the length of the procedures before the Labour Courts, it is common for employers and employees to negotiate terms of settlement rather than pursue claims through litigation.

To such extent, the law of June 2008 is significant as it enforces the new scheme of the termination by consent (“rupture conventionnelle”).



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Françoise Mertz
Lerins & BCW
France


Johann Sultan
Lerins & BCW
France


Cyrille Catoire
Lerins & BCW
France


Emah Kangah
Lerins & BCW
France


Disclaimer:

© 2021, Lerins & BCW. All rights reserved by Lerins & BCW as author and the owner of the copyright in this chapter. Lerins & BCW has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021