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French Pres. Emmanuel Macron Modifies Labor Code

france-article

Recently elected French President Emmanuel Macron has signed five ordinances amending his country’s employment and labor law (le Code du Travail), effective September 23, 2017. The reforms are meant to give employers greater flexibility and promote new business.

Collective bargaining

The ordinances include changes allowing small businesses to negotiate employment contracts directly with employees, including provisions related to wages, bonuses, and hours. Businesses with 11 or fewer employees can submit collective agreements directly to employees via a referendum requiring a 2/3 majority vote for acceptance. Businesses with fewer than 50 employees can negotiate with either staff representatives or employees empowered by unions to be decisionmakers.

Consolidation of employee representative groups

Currently, businesses with 50 or more employees are required to have staff delegates, a works council, and a health and safety committee. By the end of 2019, the three groups will merge into one new representative body: the Social and Economic Council.

Layoff approval easier to attain

In France, a business must get approval from a chamber of commerce before being allowed to layoff employees for economic reasons. International businesses are now allowed to refer solely to the business’s economic situation in France when requesting permission for a layoff. Also, now dismissals will not be rejected for procedural irregularities such as an error in the paperwork.

Terminations

Businesses may now negotiate collective mutual termination plans if approved by the French Employment administration. There is a 12-month statute of limitations for wrongful dismissal lawsuits, a new cap on mandatory compensatory damages for unfair dismissal, and an increase in the minimum amount of mandatory compensatory damages.

Employer withholding delayed until 2019

Separately, a reform originally announced in 2015 that will require employers to withhold employee income tax at the source, initially meant to go into effect January 1, 2018, will now be delayed until January 1, 2019.