Council Decides Constitutionality of Corporate Duty of Care Law

New Legislation Enacted

Under the law for corporate duty of care of parent companies and contractors (Law N°2017-399), companies employing more than 5,000 employees in France or 10,000 employees worldwide (subsidiaries included) are required to draft, publish and implement a vigilance plan, including measures, to identify risks and prevent infringements to human rights and civil liberties that may result from the parent company’s activities, or from those of its subsidiaries, suppliers and subcontractors, whether situated in France or abroad. On March 23, 2017, the French Constitutional Council judged that this new law was constitutional. However, the Council rejected as vague and unconstitutional the provisions stating that companies could be fined if they did not comply with their obligations.

Mandatory Procedures for Handling Whistleblowers’ Reports

New Order or Decree

Decree n°2017-564, dated April 19, 2017, sets forth the mandatory procedures to collect whistleblowers’ reports, which must be implemented within companies employing at least 50 people. Each company can select the regulatory instrument that best fits their duty, as long as it is implemented in accordance with the relevant laws and regulations. Companies must appoint a specific correspondent and empower him or her to perform this mission. Additionally, the procedures must be adequately disseminated so that all personnel, including external and temporary collaborators, have sufficient knowledge of them. These provisions will become effective on January 1, 2018. This decree follows the enactment of Law n°2016-1691 of December 9, 2016, which applies to all whistleblowers, regardless the subject of their report.

Regulation Against Unlawful International Provision of Services

New Order or Decree

On July 1, 2017, Decree n°2017-825 becomes effective and reinforces the obligations of clients and contractors to declare the posting of workers and industrial accidents. Specifically, the decree provides the legal list of information to be displayed on construction sites (such as work duration, minimal wage, housing, falls from height prevention, mandatory equipment and right to withdraw from the workplace) and the conditions under which the provision of services or the company’s activity can be suspended in case of non-compliance with these duties.

Offense of Obstruction of Labor Inspection Deemed a Misdemeanor

Precedential Decision by Judiciary or Regulatory Agency

In a decision issued on April 25, 2017, the French Supreme Court specified the situations that fall within the scope of the offense of obstruction to labor inspection. This misdemeanor can result from the failure of the employer to communicate the documents needed for inspection purposes, but also in case of incomplete documentation or failure to provide inspectors with the required information. Therefore, in the event of an inspection over compliance with work duration provisions, the employer is required to disclose all information tracking the employees’ actual work hours. A distinction is made between an obstruction offense for the employer’s failure to respond to multiple requests from labor inspectors (deemed a misdemeanor) and an employer’s failure to provide documentation tracking employees’ working hours, which is deemed a minor offense.

Government Agenda Seeks to Reform Social Model Within Next 18 Months

Proposed Bill or Initiative

The French government communicated to its social partners its “agenda to renew our social model.” The agenda, which introduces the six major reforms to be implemented within the next 18 months, will follow three steps. Before September, there will be a dialogue with social partners on the adoption of an employment law reform and regulations. The dialogue will cover matters subject to collective bargaining and the hierarchy between company-level agreements and industry-wide agreements, reform of staff representation, employment tribunals’ procedures, redundancy law, and teleworking, among others. As of September, the second step will focus on continuity of career paths to prevent and fight unemployment, as well as the examination by Congress of a new bill in Spring 2018. The third step will concentrate on modernizing the pensions system.