President Macron has passed the most anticipated French Employment Law reform since his election, with immediate effect. Its objective: to streamline French Employment Law by granting more flexibility to companies, whilst securing equal opportunities for individuals. This is in an attempt to turn over a new leaf following decades of mass unemployment.

In a nutshell

  • Employers will be given more flexibility to negotiate employment terms and conditions with their workers while reducing the costs of firing staff.
  • Economic dismissals will be simplified, as the economic grounds justifying a redundancy procedure are now considered‎ as complied with in case of declining turnover faced on the French territory for any identified company or group of companies.
  • Damages awarded by French Courts in case of unfair dismissal will be capped

A focus on employment in small businesses

The decrees focus on several goals, looking to make employment easier for small businesses and increase flexibility to adapt to and anticipate the employment market.

  1. Small companies that have no union or staff representatives in place are now able to negotiate collective agreements at company level (subject that 2/3 of the workforce vote in favour of such collective agreement).
  2. The amount of damages for unfair dismissal will be capped according to an imperative scale that depends on the employee’s seniority and on the company’s size and which is more favourable for small businesses.
  3. The value of company’s agreements will be reinforced. Company agreements will override Branch agreements in more areas, most notably concerning wages and benefits or working time.
  4. Every company will be able to adopt collective agreements even in the absence of a trade Union signature through referendum votes ;
  5. Staff representative bodies will be merged into one single body : The Staff Delegates (“Délégués du Personnel”), the Work Council (“Comité d’Entreprise”) and the Health and Safety Committee (“Comité d’hygiène, de sécurité et des conditions de travail”) will be united into one staff representative body named the Economic and Social Council, which consultation powers are now far more limited in time (set timelines for their opinion to be given).
  6. The conditions for economic redundancy will loosen : the extent of the companies economic difficulties will only be assessed at local level (and not with regards to the overall situation of the group internationally) ; Companies are allowed to organise collective voluntary departure plans through the signature of a company’s agreement ratified by the labour administration.‎
  7. Procedural errors in the course of the dismissal procedures will no longer result in an unfair dismissal.
  8. Home working will be encouraged. The conditions for home working will be set by a Company’s agreement or through the Employer’s unilateral decision after the Economic and Social Council has been consulted.