The main changes to employment law introduced by the Macron Law of July 9, 2015, are the following:
The "Hamon Law", new version!
The Social and Solidarity Economy Law (SSE or "Hamon Law") dated July 31, 2014 created, as from November 1st, 2014, a new procedure of prior information of employees in companies which qualify as "small and medium-sized businesses", i.e. with less than 250 employees. This procedure applied in particular in the event of a contemplated "transfer" of a business or of majority of shares.
However, due to numerous criticisms and uncertainties regarding the new obligation of prior information of employees in case of a sale of a business in "small and medium-sized businesses" with less than 250 employees, the law has been revised in particular on the following points:
- This prior employee information obligation is now limited to the sole case of a "sale". As a consequence, the information obligation no longer applies to contributions or mergers, or to transfers concluded for no consideration. Unfortunately, and despite ongoing criticism, this prior information remains mandatory in case of intragroup transactions.
- The sanction for failure to comply with the prior information obligation has been modified: the nullity of the procedure (cancelled by the Constitutional Court) is now replaced by a civil fine capped at 2% of the amount of the sale of the business.
- The methods of informing employees have also been clarified. According to a decree dated October 28, 2014, employees must be informed by the following means: information note posted on the company's notice boards, information meeting, letter sent with an acknowledgment of receipt. The Macron Law specifies that when employees are informed of the sale by registered letter with return receipt requested, the date of reception to be taken into account must be the date of the first presentation of this letter to the employee's home address.
Encourage employee savings
Companies whose headcount exceeds 50 employees and which have already concluded an optional profit-sharing agreement ("intéressement") are exempted for 3 years from having to negotiate a mandatory profit sharing agreement ("participation").
The headcount requirement, determining whether a company is subject to the obligation to conclude such agreement, has also been broadened. As of now, the threshold of 50 employees will be assessed over a period of 12 months, consecutive or not, during the 3 last fiscal years (instead of the current period of 6 months over the last fiscal year).
Moreover, as of January 1st 2016, the rate of the flat rate contribution will be brought down to 8% (instead of 20%). This measure will apply to companies with less than 50 employees that either implement a profit-sharing or participation agreement for the first time or have not concluded any such agreement during the 5 years preceding the effective date of the agreement.
Finally, the Macron Law intends to reduce global taxation on the gain at vesting of RSUs granted to employees. If RSUs holders hold the shares after vesting, they will be eligible to a rebate on their vesting gain.
The penalty for hindering employee representatives' rights has been modified
The Macron Law has removed imprisonment penalties that used to apply in case of hindering employee representatives' duties (consultation). It also doubled the amount of the corresponding fines as well as the fines imposed for hindering the implementation of employee representative bodies. The maximum fines have therefore been increased from € 3,750 to € 7,500 (i.e., from € 18,750 to € 37,500 for corporations). The one-year imprisonment penalty will be maintained in some cases, in particular when the company hinders the implementation of employee representative bodies.
The status of trade union defender is now clarified
The Law sets out the role and status of the "trade union defender", who will now be considered as a protected employee from appointment by employee and employer representative organizations at the national or the branch level. In companies with at least 11 employees, the defender is granted time-off for a maximum of 10 hours a month in order for him to carry out his/her role, i.e., of assistance and representation before the Labor Courts as well as the Courts of Appeal in labor matters.
An indicative scale of damages for Labor Courts
The Macron Law has established an indicative scale of damages which could be awarded by a Labor Court if the dismissal of an employee is found to be unfair. The amount of damages (over and above statutory and contractual indemnities) will depend on the employee's seniority in the company, his/her age as well as whether he/she has found a new position.
The use of this indicative scale is left to the judges' discretion unless both parties request that it is applied. This scale has yet to be specified and will only be applicable after the Higher Labor Council ("Conseil supérieur de la Prud'homie") has delivered its opinion.
Possibility to create a specific perimeter for the application of dismissal selection criteria
In the framework of economic dismissals with the implementation of a social plan, companies now have the possibility to determine the scope of application of the selection criteria by means of an unilateral document. In such a case, the scope may not be set below the scope corresponding to each "employment area" where one or several of the company's establishments impacted in the redundancy are situated.