The bill incorporating the ANI of January 11, 2013 on protection and flexibility of employment was finally adopted by the French Senate on May 14, 2013. The matter has been brought to the French Constitutional Council, but only with respect to the provision relating to the spread of complementary health insurance.

There are still some steps that have to occur before the bill becomes law, like formal publication. But unless there’s a successful challenge on constitutional grounds, the labor reforms will become final in the near future.

Flexibility for Employers

Internal Mobility

The employer can engage a negotiation on the conditions of the professional or geographic mobility within the company within the framework of collective measures of day-to-day organization without a proposed cut in staff. The negotiation also covers (i) the forward-looking developments in terms of employment and skills and (ii) the measures likely to accompany such developments.1

The provisions of the agreements entered into shall apply to the employment contract. The provisions of the employment contracts that are contrary to the agreement are suspended. However, the purpose of the collective agreement entered into is to cause a decrease in the remuneration level or the personal classification of the employee and should guarantee that his/her professional classification be maintained.

In the event that the employer wishes to implement an individual mobility measure through the agreement entered into, it must first initiate a discussion with the employees likely to be concerned in order to take account of the personal and family constraints, and then it must obtain their consent.

In the event that an employee refused the mobility measure, the ground for his/her dismissal will be for economic reasons.

Agreement Related to Job Protection

In the event of serious economic difficulties in the company, a company level agreement may, in consideration of the employer’s commitment to maintain the jobs throughout the validity of the agreement, change the terms and conditions of organization and sharing out of employment as well as the remuneration for the employees carrying out these job positions at the time.

The duration of the agreement shall not exceed two years. During this period, the employer shall not organize a termination of the employment contract for economic reasons for the employees covered by the agreement.

The employment agreement must be entered into on a majority basis. In companies where there is no trade union, an agreement may be concluded with the employee representatives or with a duly authorized employee in accordance with the provisions relating to derogatory negotiation. The agreement cannot lead to a decrease in remuneration of employees below the French minimum wage (SMIC), increased by 20 percent.

The provisions of the agreement concluded are applicable to the employment contract. The provisions of the employment contract that are contrary to the agreement are suspended. If an employee refuses the application of the agreement, his/her dismissal shall be for economic reasons.

New Procedure

The collective dismissals for economic reasons (redundancy) and the content of the Employment Safeguard Plan (ESP) are set either by majority collective agreement ratified by the administrative authority2 or by a document from the employer approved by the administrative authority.

In the case of a majority collective agreement, the administration has 15 days to ratify the agreement. In the case of a document prepared by the employer, the latter presents it to the works council, and the administration has 21 days to ratify it. It should verify (i) whether or not the plan is lawful and (ii) whether its content complies with the means available for the company or the group.

In the event that the administration remains silent during the above time periods, the plan is deemed ratified or approved. The collective agreement, the document prepared by the employer, the content of the ESP, the decisions made by the administration and the lawfulness of the redundancy cannot be the object of a dispute that is different from that of the ratification or the approval. These disputes fall within the scope of the administrative court.

New Rights for Employees

Spread of the Complementary Cover for Health Costs

Negotiations should be engaged before June 1, 2013, at the level of professional branches that are not covered by such complementary health insurance in order to enable all employees to benefit from a collective cover with mandatory affiliation in terms of complementary reimbursement of health costs.

Individual Training Account

Each employee has a personal training account, which is expressed in hours and used by the person when he/she has access to training. It can be fully transferred in the event of change or loss of employment and cannot be debited without the holder’s express consent.

Protected Voluntary Mobility

In companies or a group of companies with at least 300 employees, any employee with seniority of 24 months may, with his/her employer’s express consent, benefit from a protected voluntary mobility period in order to carry out an activity in another company, during which the performance of his/her contract is suspended.

Employees Taking Part to the Board of Directors and to the Supervisory Board

In companies with at least 5,000 employees and whose registered office is based in France and in companies with at least 10,000 employees and whose registered office is based abroad, the Board of Directors (BD) or the Supervisory Board (SB) shall include employee representatives. The number of employee representatives is one if the number of members of the BD or SB appointed is equal to or less than 12, and at least two if the number of members of the BD or SB appointed for the Board of Directors or the Supervisory Board is more than 12.

Fight Against Precariousness in Terms of Employment and Access to Employment

Increase of the Unemployment Insurance in Certain Contracts

The agreements set forth in Article L. 5422-20 of the French Employment Code (agreements relating to unemployment insurance) may increase or decrease the contribution rate depending on the nature and duration of the employment contract, the reason for having recourse to the contract, the age of the employee, or the size of the company.

Managing Part-Time Work

From the moment one-third of the headcount of the professional branch has part-time work negotiations must be engaged within three months following the promulgation of the law. Such negotiations shall cover the terms and conditions of the part-time work. This negotiation shall cover the weekly or monthly minimum working time, the number and duration of the suspension of activity periods, the notice required prior to changing the hours, and remuneration of the complementary hours.