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The employment relationship

Country specific laws What laws and regulations govern the employment relationship?

The employment relationship is governed by different levels of legislation, starting from the bottom up:

  • employment agreements;
  • company-level agreements;
  • national collective bargaining agreements which apply to all employers operating in the relevant industry;
  • legislation, including the Labour Code, which compiles the statutes; and
  • the Constitution and higher rules (eg, EU treaties or law).

French employment law operates under two main principles. The first is that the set of rules of the highest hierarchical level will prevail over the lower ones. The second is that employees should benefit from the most advantageous rule.

These principles have been shaken by the recent Loi Travail. This law has introduced a new architecture in the Labour Code to raise company-level agreements over national-level bargaining agreements regarding working time rules. A committee has been created to study the extent of this new architecture to the remaining provisions of the Labour Code. 

Who do these cover, including categories of worker?

These laws and regulations apply to all employees working under employment agreements which are subject to French law, even employees at the executive level. In principle, independent contractors and company officers and directors are not subject to these laws and regulations; however, these categories of workers frequently claim that they are deemed employees and enjoy the same protection. 

Misclassification Are there specific rules regarding employee/contractor classification?

There are different types of contractor under French law. Due to the EU directive on agency workers, employees and agency workers enjoy similar levels of protection with regard to pay and benefits. Classification issues raised by agency workers relate to whether their contract is temporary or whether it complies with the strict regulations. By contrast, contractors (eg, independent consultants or self-employed individuals) can claim that they are employees if they can prove that their duties, the instructions that they receive and the way in which their work is performed amounts to an employment agreement. As in many other jurisdictions, this classification depends on many factors which are frequently adjusted by case law. 

Contracts Must an employment contract be in writing?

Indefinite employment agreements need not be in writing, subject to any applicable collective bargaining agreement. However, it is in the interest of employers and standard practice to enter into employment agreements.

Fixed-term or part-time employment agreement must be in writing.

Are any terms implied into employment contracts?

Some terms are implied, such as the duty of loyalty and confidentiality.

In addition, the Labour Code supplements employment agreements, introducing, for example, mandatory paid leave entitlements and rest periods.

Are mandatory arbitration/dispute resolution agreements enforceable?

Under French law, mandatory arbitration/dispute resolution agreements are unenforceable. However, there is a mandatory conciliation phase before an employment litigation matter goes to a judgment hearing. 

How can employers make changes to existing employment agreements?

As a rule, any change to an employment agreement requires the employee’s consent, unless it is considered to be an unessential term of the agreement or part of the employer’s right to variations. Changes relating to pay and benefits are usually deemed to be contractual and require consent.

When a change is made for economic reasons, employers must follow the specific process set out under French law. Employers must provide formal notice and wording by registered letter at least 30 days before the proposed contractual change. If the employee refuses the change, a termination procedure for economic reasons may be carried out. If the employee remains silent, he or she will be deemed to have accepted the change.

Subject to concluding a collective agreement with the representative union delegates, when a company faces situations such as a change of business environment, the law now gives the opportunity to employers to reduce salary or increase working time (with no extra pay) during a period of up to five years. In practice, such agreements may remain the exception as it will be necessary to get the unions on board.

Certain contractual changes that affect multiple employees may be subject to prior consultation with the relevant employee representatives.

Foreign workers Is a distinction drawn between local and foreign workers?

A distinction should be made between employees working under French employment agreements and those working under foreign employment agreements, rather than a distinction based on nationality. Employees on international assignments are subject to the core mandatory rules (eg, health and safety), rather than the entire Labour Code. When a foreign co-contractor seconds an employee to France, the instructing party or project owner must verify that the labour authority has been duly notified. Failure to do this may trigger a €2,000 fine per seconded worker (capped at €500,000 per company). Filing obligations are broad and include workers such as subcontractors and agency workers.

All employees working in France must have the right to work, which may entail obtaining a visa and a work permit, even if the employer is based outside France. Employees from the European Economic Area (including French nationals) are generally exempt from such formalities.

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