Bonus-Penalty System for Unemployment Insurance

New Order or Decree

A decree, dated July 26, 2019, has set a principle of modulation of employers’ contribution to the mandatory unemployment scheme (between 3 and 5.05%) depending on the number of contract terminations. All terminations count, except resignations and a few State-aided contracts. This derogatory scheme will apply to all companies employing 11 employees and more, in industries having the highest rate of contract terminations. For instance, companies frequently using fixed-term contracts will have a higher contribution rate. The contribution rate will be determined by comparison between the company's termination rate and the average termination rate at an industry level. The terminations held against the companies will be those generating registration as jobseekers. The Government is currently contemplating the expansion of this scheme to other industries. This will be enforced in 2021, based on the company policies of 2020.

Supreme Court Validates Statutory Scale of Compensation for Unfair Dismissal Cases

Precedential Decision by Judiciary or Regulatory Agency

In an opinion dated July 17, 2019, the French Supreme Court held that the provisions of the French labor code setting the compensation scale in case of unfair dismissal, with minimum and maximum amounts, do comply with various international agreements as well as Convention 158 of the International Labor Organization. Prior to this decision, some local labor courts have refused to apply the statutory scale, based on adequate and appropriate indemnification. This opinion is not a ruling, and therefore not binding.

Anxiety Damages Extended to All Employees Exposed to Asbestos or Other Toxic Substance

Precedential Decision by Judiciary or Regulatory Agency

Through several recent decisions, the French Supreme Court awarded anxiety damages, not only for all workers exposed to asbestos, but also for injuries and illnesses related to other toxic substances. The French Supreme Court explained, “In compliance with the general principle of obligation to provide safety for employees, the employee who justifies an exposure to a harmful or toxic substance generating a high risk of developing a serious pathology and an anxiety injury personally suffered as a result of such exposure, may act against his employer for breach of his obligation of security.”

“Zero Alcohol Tolerance” Introduced in Company Bylaws

Precedential Decision by Judiciary or Regulatory Agency

On July 8, 2019, the French Supreme Administrative Court ruled in favor of a “zero alcohol tolerance” introduced in company bylaws, banning any consumption of alcohol in dangerous workplaces (for electricians, mechanics or where employees must operate machinery). Company bylaws may determine a list of employees covered by the ban, according to the post they occupy. The ban must, however, be justified by the nature of the work and must be proportional to the aim sought. This justification does not need to be explicitly addressed in the bylaws and may be based on external elements.

Contractual Termination of Employment: Importance of a Copy Ratified by Both Parties

Precedential Decision by Judiciary or Regulatory Agency

Through two recent decisions, the French Supreme Court specified its jurisprudence on contractual termination of employment. First, the French Supreme Court ruled that the employee must receive a copy of the preliminary termination agreement ratified by both parties, in order to exercise his or her right of withdrawal. This will ensure their second ruling, by which the judges insisted on the necessity to prove that a copy of the preliminary agreement has been given to the employee.