The Macron labor law reform created a new way to implement downsizing on a voluntary basis. The so called “rupture conventionnelle collective” (collective mutually agreed terminations) allows employers and employees to circumvent the heavy administrative process that accompanies traditional economic layoffs.
This new system clearly comes with advantages but must be carefully carried out in order to not jeopardize the entire operation.
Here are some do’s and don’ts to keep in mind before jumping in.
Do set out with the negotiation partners (trade unions) the maximum number of departures, as well as what category of employees is concerned.
Don’t mistake the RCC system for an easy way to downsize without limits.
Do make sure that you’ve evaluated the other options first: you won’t be able to change your mind and dismiss the employees instead
Don’t make the mistake of simply offering financial indemnification: the system requires additional offers in the form of outplacement, external job offers, support for starting a business, etc.
Do remember that this is a voluntary process and put in place a proper call for applications. Yes, people are going to apply to be terminated in this manner.
Do take into account many different criteria in selecting the beneficiaries. The factors cannot only be age and seniority.
Don’t mistake this for a standard economic layoff. This process is mutual and one of negotiation. The employer is not in a position to strong-arm anyone.
Don’t forget to include the works council (CSE) in the process.
Flichy Grangé Avocats will be able to assist you with every step necessary to ensure your company’s proper handling of this new process.
Source : leglobal.org L&E Global’s member firms in Europe had another strong showing this year in the recently published 2018 edition of The Legal 500 Europe, Middle East, & Africa. The Legal 500 series is one of the world’s most respected authorities on the markets’ leading lawyers and law firms... Read more
Salary is not the only remuneration that employees can receive.
Profit sharing is a significant example.
According to Article L. 3322-2 of the French Labor Code, companies employing at least 50 employees must share the results with their employees with by means of a redistribution of part of the profits.
The Labor Code provides for special methods of calculation of profit sharing amounts.
There are two types of formula for the calculation and distribution of the profit sharing: the first is set out by law and the other, secondary formula, can be provided in a collective agreement that applies to the company.
In both formulas, the net profit figure is essential. The determination of net profit is not an easy task as there are a number of subtleties.
In order to guarantee the amount of the net profit, it is established by a certificate of the tax inspector or the auditor. For many years, the Court of Cassation has considered that this certificate cannot be challenged before the court. This impossibility is nevertheless limited to disputes between the employee and the employer.
In a recent case before the Court of Cassation, there was restructuring operation aimed at consolidating all the subsidiaries into a single legal entity. As a result, all the companies were dissolved and transferred their assets to a single parent company which financed all the shares of the subsidiaries. The financing of this operation forced the parent company to take out a heavy loan over several years, creating a de facto decrease in the net profit, thus eliminating the payment of the profit sharing to the employees.
Considering that this operation was fraudulent, the works council and several company unions of the company initiated legal action to make the restructuring operation unenforceable against employees and have the parent company ordered to reintroduce the misappropriated funds.
The Court of Appeal of Versailles accepted the requests on the grounds that the certificates established by the auditor cannot prevent the judicial judge from questioning, in case of company fraud, the certification of the accounts on the basis of the elements provided by the company. The court declared the restructuring unenforceable against employees and sentenced the company after the appointment of a chartered accountant to reconstitute the special profit-sharing reserve for the years in question.
It is no surprise that the Court of Cassation struck down the appellate court’s decision by recalling its constant position that the amount of net profit certified by an auditor cannot be challenged in a dispute over profit sharing, even in the event of fraud or abuse invoked against the company.
Up to now there was much confusion for foreign employers regarding the organization of staff representation in France and their respective obligations and duties. There was, prior to the Macron Reforms: the works council, staff delegates, and the work health and safety committee (CHSCT). Now, these will all be merged into one institution called the COMITE SOCIAL ET ECONOMIQUE (CSE). It must be established in companies with 11 or more employees. Its responsibilities vary according to the size of the company, and will mirror the former responsibilities of the staff delegates for companies with 11 to 50 employees, or the former responsibilities of all the former staff representative bodies for companies with more than 50 employees. The CSE has an operating budget and also deals with social and cultural activities when there are more than 50 employees in the company.
When to put it in place?
In practice, the CSE must be implemented at the end of the mandate of the current staff delegates, works council, and CHSCT, when renewing one of these institutions and no later than by December 31, 2019.
Should all or part of the mandates end in 2018, the Macron reform specifies that to ensure the proper introduction of the CSE, the duration of the current mandates can, for an establishment or for the whole of the company, be prolonged or reduced by collective agreement or by decision of the employer after consultation with the relevant staff representatives so that all mandates currently in force stop at the same time so as to coincide with the date of implementation of the CSE.
2018 might be the year that your company implements the CSE, so don’t hesitate to ask us for support in conquering this new labour law challenge.
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Companies with more than 20 employees in France must have internal regulations (règlement intérieur). This document sets out and specifies number of obligations, in particular regarding hygiene, safety or disciplinary sanctions, which the employee and the employer must respect within the company. The draft project must be submitted to the staff representative bodies. The internal regulations are then subject to the control of the labour authority.
New provisions must now be included in the internal regulations. These include:
- the ban on vaping in the offices which enters into effect on October 1, 2017.
- the right for employees to disconnect from company communication tools (computers, mobile phones, company email) during rest periods and periods when they are off duty. This is not mandatory but should be included in an annex to the internal regulations.
- the internal rules of the company must not only recall the legal provisions on moral and sexual harassment, but also those which prohibit sexist behavior in the workplace.
In addition to those new mandatory provisions, the law combined with the Court of Justice of the European Union’s recent decisions dated March 14, 2017 dealing with a Belgium and French cases, now gives the possibility for the company to impose a neutrality duty and accordingly to include provisions preventing employees from expressing their religious or philosophical convictions and identities, subject to some conditions (mainly, such restriction should in practice apply to employees who interact directly with clients.)
Although this law and the European rulings are generally welcomed by French employers, particular vigilance as to the drafting of those clauses should be paid, as this remains a possible area of dispute. Indeed, some associations consider such provisions as inherently discriminatory and particularly islamophobic as it could in practice prevent female employees from wearing the Islamic headscarf; the Constitutional court might well be asked to issue its opinion on the validity of this law. The French Supreme Court is expected to hand down its own decision in September of this year and provide clear guidelines on what companies may and may not do.
The law on Equality and Citizenship, published in the Journal Officiel on January 28, 2017 aims to facilitate the social integration of youths (development of civic services by diversifying welcoming structures, international mobility of apprentices outside of the European Union), combat discrimination (training of hiring personnel, at least once every five years, on non-discriminatory hiring practices), and encourage citizen’s engagement (creation of a right to unpaid leave to exercise responsibilities in an association, up to six days a year). These measures entered into effect on January 29, with the exception of those that require a decree that is still pending.
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Equality between women and men in professional life in France has been a source of real concern for a number of years. Since 1972, it has been the subject of successive reforms. In total, more than 10 laws have implemented between then. Nabila Fauché – El Aougri contributed to “Discrimination law & Equality” guide, published by Expert Guide. Read more (page 80)
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