French employment law is unique. Here’s how.
Permanent contracts are the standard employment contract.
Fixed-term employment contracts are strictly regulated. A fixed-term contract can only be concluded for the performance of a precise and temporary task and cannot be used to fill jobs that are related to the company’s regular business.
It is crucial to determine the industry-level collective bargaining agreement applicable to your business.
Although employment law is codified, it is important to determine which industry-wide collective bargaining agreement applies to your company because it covers key issues, including minimum wages, job classification, working time, and health and life insurance. For this reason, negotiating and entering into a company-level agreement to derogate from the potentially unsuitable and constraining industry-wide agreement may be worthwhile.
The employee representation system is twofold.
In France, staff representatives include elected representatives and appointed representatives.
- The Works Council, known as the Social and Economic Committee (“CSE”), is elected by employees and must be set up in companies with at least 11 employees. The CSE has extended powers in companies employing at least 50 employees and must be consulted a range of issues, including decisions affecting company organization and management, working conditions and large-scale economic dismissals. However, in most cases the CSE’s opinion is purely advisory. It has very few co-determination rights.
- Trade unions delegates are appointed by representative unions in companies with at least 50 employees. In companies with fewer than 50 employees, a member of the CSE may be appointed as a union representative. The most important prerogative of trade unions is negotiating and entering into collective agreements with the employer. There is no longer a monopoly, because, in companies where there are no union delegates, the employer can negotiate and enter into a collective bargaining agreement with one or more CSE members.
Companies with a union delegate must conduct mandatory negotiations including the annual negotiation of wages, working time and profit sharing.
French employees can work more than 35 hours per week.
Although 35 hours is standard, it is not the weekly maximum. It simply means that, beyond this threshold, the hours worked by employees are considered overtime. If the industry- or company-level CBA provides, companies can adapt working time to peaks and lows in activity by adjusting working hours over a year or more. It is also possible to calculate working days over the year.
Termination is not as complicated as you might think.
Dismissing an employee is not impossible under French employment law. The Labor Code only requires the employer to comply with a pretty straightforward process, including holding a preliminary meeting and notifying the dismissal in writing, and for the dismissal to be justified by a real and serious cause. Since the introduction of the “Macron scale”, the amount of damages an employee may be awarded by an employment tribunal is case of dismissal without cause capped by law.
Dismissal is not the only way to terminate an employee. There is a more friendly and consensual approach with termination by mutual consent.
There are two main types of profit-sharing schemes.
There are two main types of profit-sharing schemes in France.
- Mandatory profit-sharing scheme (“participation”) for companies with at least 50 employees. This scheme allows a company to redistribute part of its profits to its employees.
- Optional profit-sharing scheme (“intéressement”) for all employers.
Those schemes are eligible for social and tax exemptions. The money paid to the employee within the framework of these profit-sharing schemes are not subject to social security contributions and income tax.
Employer must offer a health insurance scheme and a life insurance scheme to its employees
All private-sector employers are obliged to provide their employees with a health insurance scheme (“régime frais de santé” – “mutuelle”), and to contribute at least 50% of the cost of premiums.
Employers also have to provide a life insurance scheme (“prévoyance”) which covers risks such as death, disability or long-term sickness to executives (“cadres”) and other employees when such an obligation is provided for by the applicable industry-level collective bargaining agreement.
