All companies located in France and with at least 50 employees are required to enter into an agreement on the employment of seniors before 1 January 2010 under the French Labor Code. The agreement is to be entered into according to the standard rules of collective negotiations. Failing such an agreement the business must include a plan of action which it must submit to its staff representative authorities before filing it at the latest on 31 December 2009.

The agreement or plan of action must include an objective to maintain employees aged 55 and over in employment and/or to hire individuals aged 50 and over. Failure to have such an agreement or plan compliant with the applicable regulations may result in companies being liable to pay a penalty of 1% of their total payroll to the French social security authorities for periods during which they are not covered by such an agreement or plan of action.

At the same time as promoting longer careers and increasing the employment or seniors the French legislation has created a mandatory mechanism which consists of pushing back the retirement age to 70. Since 1 January 2009 employers can no longer impose retirement on their employees who have reached the age of 65 without their prior consent. However employers recover the right to impose retirement as from the employee’s 70th birthday.

The above has been taken from a briefing note first published by Gide Loyrette Nouel, a fellow Lex Mundi law firm member.