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France’s Employment Reforms to Go Into Effect in September

Author: Karine Audouze (Paris)

Published Date: August 31, 2017

As President Emmanuel Macron had promised, major employment reforms are under way in France and the related ordinances have been published on August 31, 2017, after extensive negotiations with national unions, concerning, in particular, the following issues:

Capping Damages Awarded by Employment Tribunals in Unfair Dismissal Cases

Damages will now be capped at three months’ salary for employees with two years of seniority (employees with fewer than two years of seniority will be entitled to an award equal to one month’s salary). Damages will be capped at 20 months’ salary for employees with more than 30 years’ seniority. Before this ordinance went into effect, the amount of damages awarded in unfair dismissal cases was left to the discretion of the employment tribunals and was not capped, leading to extensive uncertainty for employers. These damages caps will not apply in discrimination-related cases.

Mandatory Dismissal Indemnities

The reforms increase mandatory dismissal indemnities to 0.25 of one month’s salary for every year of the employee’s seniority.

Negotiating Collective Agreements

Small companies with less than 20 employees will be able to negotiate collective agreements with an employee who is neither a union member nor an elected worker’s representative. These companies will also be able to negotiate agreements via a referendum with all employees on all subjects. Companies with 20 to 50 employees may collectively negotiate with an elected employee who is not a union member (on subjects such as working time or remuneration).

Merger of Workers’ Electoral Bodies

In companies with more than 50 employees, the works’ council, the health and safety committee, and the workers’ representatives will now be merged into a single body called the economic and social committee.

A National Perimeter for Social Plans

If an international organization experiences economic difficulties and wishes to conduct redundancies in its French subsidiary, the judge will only look at the domestic situation and shall not take into account the economic situation of the organization, as was the case until now.

Company and Branch Agreements

Going forward, company agreements and branch agreements will govern and prevail on an extensive list of matters.

The ordinances are expected to be enacted by the end of September 2017.

Karine Audouze  (Paris)

Karine Audouze
Karine Audouze is the Managing Partner of the Ogletree Deakins Paris office. Karine advises clients on hiring / terminating senior executives, redundancies, international employee transfers and employment issues as part of sale and merger deals. Karine acts mostly for international groups with a presence in France with a particular focus on the TMT sector. She also handles individual and collective employment litigation. Karine is Secretary of the Discrimination and Equality Law Committee of the...

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