Non-discrimination is a constitutional principle which, in principle, compels the employer not to take into account factors inherent to the person of the employee (such as gender, nationality, religion ...) to make a decision that concerns the said employee. Furthermore, companies have always been under an obligation to ensure strict equality between men and women.
However, the practice has shown that inequalities between men and women remain at the workplace, especially with regard to the level of remuneration.
Therefore, new measures have been set out in the Law of November 9, 2010, on pension reform. Under these provisions (Article L 2242-5-1 of the Labor Code), a financial penalty is applicable to companies with at least 50 employees, which will not have set up a collective agreement or action plan in favor of equality between men and women as at 1 January 2012.
A draft Decree specifies these measures.
1. Companies targeted by this measure
Under the law, only companies with at least 50 employees will be penalized for non-compliance with the new provisions on equality between men and women.
2. The provisions of the draft Decree on the content of the aforesaid collective agreements and action plans
General contents of the collective agreements and action plans
The draft Decree lays down the contents of the collective agreements or action plans on equality between men and women at the workplace.
These documents shall set out goals for progress, and actions to achieve such goals. Areas where measures should be taken shall be chosen in the following points: hiring, training, promotion, qualification, classification, working conditions, actual remuneration, connection between work and the exercise of family responsibility.
Apparently, companies with fewer than 300 employees will be required to work at least on two of these points. As for those with more than 300 employees, at least three of these points of action should be considered.
Indications in the Annual Reports
In the absence of collective agreement, the companies will not be penalized if they incorporate an action plan in their report on the comparison of the general conditions of employment and training of women and men (companies with 300 employees or more) or in the report on the company’s economic situation (companies with less than 300 employees).
According to the draft Decree, said reports should specify:
- measures taken over the past year to ensure equality at the workplace,
- outcomes of the actions carried out over the past year,
- assessment of the level of achievement on the basis of selected indicators,
- goals of growth for the year to come,
- a qualitative and quantitative definition of the measures designed to achieve the said goals,
- cost assessment.
Finally, the draft Decree also sets out that a synthesis of the action plan defined by the report shall contain indicators on the respective situations of men and women in relation to average salary, the average time between two promotions, and the exercise of managerial and decision-making duties.
3. Amount of the penalty in the absence, on January 1, 2012, of collective agreement or action plan for equality between men and women at work
3.1 Under the law (Article L. 2242-5-1 of the Labor Code), the penalty should amount up to 1% of all remunerations and gains paid to employees over the periods during which it will not have been covered by a collective agreement on professional equality or, in the absence of any such agreement, if no goals were defined and no measures were taken in an action plan.
Such penalty amount will be determined by the labor authorities according to the efforts noticed in the company in relation to equality between women and men, as well as reasons for its failure to respect the obligations imposed by a collective agreement or action plana.
3.2 According to the terms of the draft Decree, the following elements could be possibly taken into account to justify the company’s failure:
- its economic difficulties,
- any pending restructuring or mergers,
- any pending bankruptcy proceedings,
- The date when specific staff thresholds are reached.
It seems to result from the draft Decree that the labor authorities could decrease the penalty or cancel it if the company is able to justify its failure.
This draft Decree is expected to come into force in Summer 2011, being reminded that the implementation of a collective agreement or action plan in favor of equality between men and women at work shall be effective in the companies on December 31, 2011 at the latest.
With regard to the companies covered as at the date of publication of the Law by an agreement or, by an action plan, the newly-created obligations shall become applicable upon expiration of the collective agreement or, in the absence of any such agreement, upon expiration of the action plan.