In France, employment law provides employees with a good level of protection. Nevertheless, this legal environment is constantly changing as a result of government reforms and case law evolution. There have been recent developments, in particular, in relation to union representation and collective bargaining agreements; working time; mutual termination agreements; and collective redundancies. In France, choosing the wrong option may result in costly individual or collective litigation.

Issues arising on hiring individuals

Immigration

EU citizens do not need a work or residence permit if they hold a passport or other identification proving that they are EU citizens. All non-EU citizens must obtain a work permit to work in France. The relevant prefecture (i.e. local government representative) will consider the employment situation within the local region (dpartement) when deciding whether to grant a work permit. If the foreign national is living abroad, the employer must apply to the local French unemployment authority. The application is then forwarded to the employment authorities. If they decide that the foreign national can work in France, they issue a temporary one year work permit.

Employment structuring and documentation

Employment contracts are generally not required to be in writing, but certain forms of employment contracts must be in writing: fixed-term contracts; part-time contracts; and temporary employment contracts. Verbal fixed-term contracts are unequivocally deemed to be indefinite term contracts and verbal part-time contracts are deemed to be full-time contracts. Employers should provide employees with a written statement of the essential terms governing the employment relationship.

Indefinite term contracts should contain the following information: (1) identification of the parties; (2) the employee's job title or a description of their duties; (3) working time; (4) the employee's compensation including bonuses; (5) the place of work; (6) the start date; (7) the length of the probationary period; (8) holiday entitlement; (9) the applicable collective bargaining agreement (CBA); and (10) the length of the notice period.

In contrast with indefinite term contracts, a fixed term contract must comply with certain requirements as to content and form in order to be valid. However, employees working under fixed term contracts have the same statutory individual rights as those working under indefinite term contracts. The employer and the employee may agree on a probationary period, which can be renewed (only once) in certain circumstances, and during which either party may terminate the employment contract without any formality. If both parties are satisfied at the end of the probationary period, the employment contract becomes definitive.

Issues arising during the employment relationship

Wages, annual leave and working time

Employers and employees are free to negotiate the terms and conditions of their employment relationship. However, employees have various minimum rights under the law, regardless of any provision to the contrary in their employment contract. These minimum working conditions are set out in particular in the French Labour Code and the applicable branch CBA.

The minimum gross monthly wage in 2016 was EUR 1,480.27 (approx USD 1,580) for a 35 hour work week. All employees who are employed under an ordinary employment contract (either indefinite or fixed term) are entitled to the minimum wage.

Usually, employees work 35 hours a week. In addition, employees must not work more than: (1) an average of 44 hours a week during any 12 consecutive weeks; (2) 48 hours during any given week; (3) ten hours a day; and (4) 220 hours of overtime a year (subject to the applicable CBA).

Overtime is defined as the hours worked in excess of the statutory weekly working hours. Only hours worked at the request of the employee's superior are regarded as overtime. However, the employer has the duty to ensure employees do not exceed the daily and weekly limits.

Employees are entitled to a minimum of five weeks' paid holiday per year. In addition, there are about ten public holidays every year. The law and CBAs grant additional paid leave for employees who have reached a specific length of service and for family related events.

Over the last few years, new regulations have been introduced to facilitate Sunday work and evening work, in particular for tourist and commercial zones. Sunday and evening work must first be validated through a company agreement and employees must remain free to choose whether to work these hours, for which they must be paid double.

Trade unions

Under French employment law, the function of the trade unions is to defend the rights and moral and material interests of their members. However, French employment law offers wide powers to the so-called "representative" trade unions, i.e. those which are recognised as representing a group of employees, regardless of whether these employees are members of the trade union. The trade union may be represented at several levels (in the company, at regional level, national level, etc.).

Representative trade unions have wide powers. Most notably, they have the exclusive right to introduce candidates at the first round of voting for the staff representative bodies. In addition, they appoint a representative to be a member of the works council.

Elected staff representative bodies (works council, health and safety committee, group) also have important powers in companies with more than 50 employees: they must be informed and consulted prior to any significant project, and in relation to collective redundancies.

Social insurance

Social security contributions in France are divided into employee contributions, which are deducted from salary, and employer contributions, which are not an element of remuneration and are payable by the employer in addition to remuneration.

Social security contributions are calculated by reference to the basic salary paid for work performed. Most allowances and other cash payments are subject to social security contributions as well as tips and certain benefits-in-kind for private use.

Issues arising on termination of the employment relationship

Business transfers

There is no legal requirement in France to inform every employee before a business transfer, but there is a legal requirement to inform and consult the works council (if one exists) before deciding on the transfer. However, in practice, employees commonly receive a brief letter advising them of the change of employer, in an attempt to achieve a seamless transition and build a relationship with the new entity.

An employee cannot object to a transfer, as the transfer takes effect automatically. A refusal could constitute grounds for dismissal for disciplinary reasons. This automatic transfer applies to all types of employment contracts (fixed term contracts, trial contracts, contracts suspended for illness, etc.).

Employees who enjoy a protected status (e.g. employee representatives) will also see their contract automatically transferred, and depending on the circumstances their representative role may carry over. However, when the transfer concerns only part of a business, their transfer must be authorised by the Labour Inspector.

Terminating employment

In the case of an indefinite term employment contract, there must be real and serious grounds for dismissal. There are two types of valid grounds: personal grounds and economic grounds. Once the employer believes that there are valid grounds for dismissal, he must send a letter inviting the employee to a meeting, giving them at least five working days' notice. This letter must set out the time and place of the meeting and the employee's right to be accompanied by a fellow employee or an outside party.

In the case of dismissal on economic grounds, the employer must also make every effort to find employees facing redundancy another position in the same company or group, worldwide, before termination. It must also ensure that employees can adapt to their new role by way of training programmes.

Non-compliance with these rules may render the redundancy unfair. Since the Law no. 2013-504 of 14 June 2013, collective redundancy plans must also be authorised by the local Labour Administration, failing which subsequent terminations are deemed null and void.

Employees who are made redundant must be given priority for the subsequent one year period if their previous position, or a similar position, becomes vacant with their former employer.

Severance pay is only awarded if the employee has the minimum length of service required by the French Labour Code or the applicable CBA (typically one year). The amount of severance pay depends on the employee's length of service and the relevant CBA provisions.

Employees who are unfairly dismissed can challenge their dismissal before the Labour Tribunal. If the judges find the dismissal is unfair, they may grant compensation.

Employees are entitled to a minimum of six months' pay in compensation if the dismissal is deemed unfair provided they have worked for the employer for at least two years and the employer has more than 11 employees. Compensation is usually financial, but in the case of dismissals that are void, employees have a right of reinstatement. New guidelines for awarding unfair dismissal damages in France have recently been introduced.

Published in collaboration with L&E Global an alliance of employers’ counsel worldwide

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