A new labour law was enacted in France on August 9th, 2016 (“El Khomri Act”, named after the current French Labour minister).

The main goal of the Act is to simplify the complex obligations companies in France face in this arena, a change welcomed by retailers and other businesses operating in France. The Act covers various topics with respect to labour regulations including collective agreements, dismissal for economic reasons, occupational health and personnel representation for franchise networks.

Companies may see the most important aspect as the Act’s provisions which allow companies to adapt their methods of organizing working time, paid vacation and other aspects of labour relations to the realities of their operations—in other words, a more practical framework will be allowed going forward rather than the past labyrinth in which companies have had to operate.

Another significant change concerns franchise networks. For these the Act provides that a “social dialogue committee” must be established for all franchisenetworks that have more than 300 employees in France and whose franchise agreements contain clauses relating to the working conditions of franchisees.