Under French employment law, employees’ representatives benefit from a right to be consulted on a very wide range of matters concerning the running of the company. In particular, the works council must be informed and consulted on any matter relating to the organisation, the management and the general running of the company, which unsurprisingly includes collective dismissals for economic reasons (there are still uncertainties about the existence of a consultation obligation in case of individual redundancy).
Aside from this general rule, there exist different sets of rules applicable to procedures for collective dismissals that implement a requirement of collective consultation on redundancy. In this context, different procedures apply depending on the number of employees to be dismissed (dismissal of less than 10 employees within 30 days and dismissal of more than 10 employees within 30 days) and the size of the company (between 11 and 49 employees and 50 or more employees). There also exist specific rules applicable to economic dismissals in the context of insolvency proceedings (which will not be discussed in this article as they are very specific).
A common feature to all these procedures is that they all involve the mandatory information and consultation with employee representatives in the case of collective dismissal for economic reasons. Basically, these employees’ representatives will be the staff delegates in companies between 11 and 49 employees and the works council in companies with 50 or more employees. In addition, it should be noted that case law tends also to require the prior information and consultation of the health and safety committee (the existence of which is mandatory for companies with 50 or more employees) in the event of collective dismissals for economic reasons.
Consequently, the application of the correct procedure will greatly depend on the number of staff to be made redundant and the size of the company.
More specifically, it is generally provided that the employer must, prior to the initial information and consultation meeting, provide the employees’ representatives with all useful information with regard to the contemplated dismissals including in particular the economic, financial or technical reasons for the dismissals, the number of contemplated dismissals or the provisional timetable for such dismissals and the measures proposed to assist the employees and help them find another job. In addition, when more than 10 employees are impacted and the company employs 50 or more employees, a job saving scheme must also be prepared.
Regarding the dismissal of less than 10 employees within 30 days, legal provisions do not impose a specific timetable for the consultation procedure. There is therefore no maximum timeframe within which the consultation process must be completed and such process will only be completed once the opinion of the employee representatives has been obtained (whether such opinion is favorable or not). In practice, the process generally lasts a few weeks.
Conversely, the procedure regarding the information and consultation with employees’ representatives in a redundancy procedure of more than 10 employees within 30 days is more complex and regulated, especially in companies employing 50 or more employees. In such case, the works council must hold at least two meetings with an interval of at least 15 days between them and must be consulted on both the economic reasons for the restructuring and on the dismissals themselves. In addition, the works council is entitled to choose at the first meeting to be assisted during the consultation process by a chartered accountant the fees of whom are paid by the employer. In this context, the works council is required to deliver its opinion within a maximum time period, ranging from 2 months to 4 months, depending on the number of employees concerned. In the event that the works council fails to express an opinion by the end of such timeframe, it is deemed to have been consulted.
These consultation requirements should not be disregarded as non-compliance with such procedural rules can trigger various types of sanctions, including possible penal sanctions consisting of a fine of up to 3,750€ (18,750€ for a legal entity) and a jail sentence of up to 1 year as well as claims for damages on the part of the employees and employees’ representatives. In cases where a mass redundancy plan must be implemented, the French labour authorities will also verify whether the consultation process has been properly carried out before deciding whether or not to validate the redundancy plan.