Introduction
If you plan to hire an employee in France, the first essential step it to determine the applicable industry-level collective bargaining agreement (CBA).
In this article, we explain how to do this and the procedure to follow if it turns out that you’re not applying the right collective bargaining agreement
Why is it important to determine the right applicable industry-level CBA?
Determining the right applicable industry-level CBA is important for the main following reasons:
- In France, the employment contract is not only governed by the Labor Code, but also by collective bargaining agreements, and above all by the industry-level CBA.
- The industry-level CBA is particularly important, as it regulates a number of key topics, including trial period, minimum wages, job classification, working time, leave of absence, severance pay, notice periods and non-compete covenants.
- Many mentions of the employment contract must comply with the provisions of the industry-level CBA, such as:
– maximum duration and conditions for renewal of trial periods,
– position of the employee in the job classification and the scale of remuneration defined by the industry-level CBA,
– remuneration constituents (basic salary and all other benefits, e.g. bonuses, allowances, benefits in kind),
– available working time arrangements such as calculation of working time in days over the year (for executives) or possibility to adjust working time over the year to avoid payment of overtime.
How to determine the right applicable industry-level CBA?
The professional scope of application of industry-level CBA is generally defined by reference either to the code APE (“Activité principale exercée”), which is the code for the principal activity carried out by the business which is issued by the French National Institute for Statistics and Economic Research (INSEE) or to the corporate purpose defined in the company’s articles of association.
However, these indicators are for guidance only and according to the French Supreme Court, the applicable industry-level CBA depends solely on the activity actually carried out by the company.
What should you do if your company apply the wrong CBA?
Two situations must be distinguished:
First situation: the commitment to apply the wrong CBA is stipulated in the employment contract
If the commitment to apply the wrong CBA is stipulated in the employment contract, then you have no choice but to modify the employment contract. However, under French employment law, modification of the employment contract requires the prior consent of the employee. This prior consent must be formalized by the signature of an amendment to the employment contract.
Second situation: the employment contract does not contain any commitment to apply the wrong CBA
If the application of the wrong industry-level CBA is only mentioned on the pay slips or in the employment contract for information purpose only, this application is considered as a work custom (“usage”) or unilateral commitment (“engagement unilateral”).
In order to terminate this work custom or unilateral commitment, the following process must be implemented:
- information and consultation of staff representatives;
- information of each employee individually and in writing; and
- comply with a sufficient notice period (a 3-month notice period is advisable).
