• A new French labor code for 2018?
  • A new bargaining panorama for many occupational fields
  • The creation of “the personal activity account”
  • The negotiation of the Unemployment Insurance Convention has started

A new French labor code for 2018?

According to most political powers and to the public opinion, the Labor code (which runs to over 3.8 thousand pages) has to be simplified. Now the prime minister has announced a new labor code for 2018.

The reform foreseen as of today aims at giving priority to social dialogue and collective bargaining agreements to set rules on the following subjects:

  • Working hours
  • Wages
  • Working conditions

The main idea is to limit the content of the Labor Code to fundamental rights and default rules which will only apply in the absence of a collective bargaining agreement.

The first tier of the new code will guarantee fundamental principles, the second tier deal with the areas open to negotiation, and the third one would cover the provisions applicable where there is no collective agreement. Rules of principles, such as the 35-hours working week, the minimum wage and the indefinite term contract will remain.

A specially created commission has already presented a report suggesting sixty-one essential principles which shall govern the new labor code, including the following: gender equality, indefinite term contract, the prohibition of discriminations, fair dismissal, the maternity leave before and after giving birth, equal pay for equal work, etc.

A draft law will be submitted to the National Assembly during the first quarter of 2016, with the goal of completing the Labor Code reform before the end of 2018.

A new bargaining panorama for many occupational fields

In France, there are various levels of bargaining:

  • The Company-level
  • The occupational-field-level called “Branches
  • The National-one

The government has announced its will to reduce the number of “branches” from approximately seven hundred to two hundred within two years. The final objective is to keep only one hundred “branches”.

What is the purpose of such reform? Like the Labor Code reform, the recasting of “branches” aims at promoting collective bargaining. Indeed, it is at the branch level that rules which will apply to all employers and employees of the sector will be negotiated.

The main idea is to regroup “branches” covering less than five thousand employees and to abolish those which have not bargained for a long time. It should increase their impact in the employment law landscape.

The creation of “the personal activity account”

Presented as an ambitious new device, the personal activity account (“compte personnel d’activité”), has been created to regroup all employee benefits on a single online portal. This measure is made to secure professional career paths and avoid that changes in the employee’s employment situation result in the loss of the social rights accrued in the past.

The whole idea is to combine at least the personal training account (“compte personnel de formation”), rechargeable rights to unemployment insurance, and the account recognizing the painfulness of certain professions1 (“compte pénibilité”) in the personal activity account. With this tool, workers will be able to convert all their social rights into points, in order to finance training, leave periods, etc.

After three months of negotiation, social partners achieved a common position last February 8th, 2016 (which however is not binding as of today) and announced that the personal activity account should, as a first step, include the training account and the “pénibilité” account.

Although this is the first step toward the creation of a true single personal activity account, this is going to be a path full of pitfalls. Indeed, many legal and technical obstacles will have to be overcome.

The negotiation of the Unemployment Insurance Convention has started

By this summer, a new unemployment insurance agreement must be negotiated by the social partners. Against the background of high and rising unemployment, benefits could become regressive.

As a reminder, job seekers currently receive the same amount throughout their compensation. This can last up to two years or even three years if they are more than 50 years’ old. The idea of the government is to have the amount of said unemployment benefits decrease (in stages) until the end of the compensation.