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Employment law in Europe, the need-to-know guide This month – France

Employment law in Europe, the need-to-know guide This month – France

By Dónall Breen - 28 March 2018

This is part four in a series of articles exploring the employment law regime in jurisdictions where businesses may be considering moving some of their staff post-Brexit. It is intended to provide a high-level overview, drawing out the main legal requirements to consider. This month’s focus: France.

This article has been written in conjunction with our Littler Global partners in France, Fromont Briens. If you require any further information on French employment law, please contact gdesmoulin@littler.com.

Verdict

Although France represents one of the more challenging jurisdictions for a UK employer, it’s codified laws and collective bargaining agreements (CBAs) mean employees and employers have clear sets of rules to follow. Although these can be difficult to navigate without the proper experience, recent reforms by President Macron have sought to create a clearer, more employer friendly system. In order to mitigate the risks posed by these challenges, employers should take legal advice from an early stage should they be considering employing staff in France. However, below is a high-level overview of the employment regime to provide a flavour of what employers may expect.

Quick Facts

  • Language – French
  • Legal System – Civil Law
  • Currency – Euro
  • Population – 66.9 million (Paris – 2.2m)

Overview – Employment Relationship

Probationary periods

Probationary periods must be provided in the employment contract and can be for up to eight months for executives, subject to the applicable CBA. During this period, the contract can be terminated without having to justify the decision or respect the schedules and formalities normally applicable to dismissals or resignations. However, notice is still required.

Contracts of employment

Although all employment contracts are not required to be written, it is strongly recommended to provide the employee with a written statement of the essential terms governing the employment relationship.

Any documents setting rights and obligations for employees must be prepared in French. This can impact international groups in which bonus policies are often in English. To avoid the risk of litigation, it is recommended French versions of bonus rules are produced.

Minimum wage requirements

The minimum gross monthly wage is currently €1,480.30 for a 35-hour working week. CBAs frequently provide for different minimum wages (depending on job categories).

Holiday and holiday pay

Employees are entitled to a minimum of five weeks' paid holiday a year, in addition to public holidays. Some CBAs grant additional paid leave for employees.

Working time

Usually, employees work 35 hours per week. In addition, employees must not work more than 48 hours per week (or an average of 44 hours a week during any 12 consecutive weeks).

However, employers can agree a longer working week with their employees. In that case, employers must pay any time worked over 35 hours a week in the same way as overtime (although there is no entitlement to additional days off). It is possible to negotiate a more flexible working schedule for all employees at company level.

Special rules apply to autonomous executives (that is, executives of a certain level who freely organise their working time) and to employees who can autonomously organise their working schedules (such as agreeing to a set number of days to be worked a year which cannot exceed 218 days).

Generally, all employees (including executives) must be granted both a daily rest period of 11 consecutive hours and a weekly rest period of 35 consecutive hours.

 

Registration with authorities

Recruited employees must be declared to authorities, which must be submitted not more than a week before the employee is due to start work. This is known as the déclaration préalable à l’embauche, which must be acknowledged by the authorities before employment can start.

Taxes and employment related charges

French employment income is taxed according to a progressive tax rate, varying from 14% for income between €9,700 and €26,800 to 45% for income over €152,200.

The employer's share of social security contributions amounts to about 43% of the gross salary, while the employee's share amounts to about 22%. The employer must withhold the employee's share from the gross monthly salary.

Employee representatives

Depending on the size of a company, it may be required to have an economic and social council. In companies with 50 employees or more, the opinion of this representative body must be sought prior to any significant change in the company.

Overview – Termination

Notice periods

The parties must observe the required notice periods before an indefinite-term contract is terminated (except for gross misconduct). The notice period depends on the employee's length of service. You can make payment in lieu of notice, however there is no concept of ‘garden leave’ in France.

Severance payments

Severance pay must be awarded if the employer terminates an indefinite-term contract and the employee has the minimum length of service (which has recently been reduced to eight months). Severance pay depends on the employee's length of service and the relevant CBA's provisions. Statutory severance is usually calculated as one fourth of monthly final salary for each year of service for the first ten years of service and one third for each year above ten years of service.

Procedural requirements for dismissal

In the case of an indefinite-term employment contract, there must be real and serious grounds for dismissal (see below). Once an employer believes that there is a valid ground for dismissal, they must give the employee five working days' notice of a meeting. During the meeting, the employer must state why it intends to dismiss the employee and take note of the employee's explanations. The employer must then notify the employee of its decision and specify the grounds for dismissal in a letter.

Protection against dismissal

Aside from during a probationary period, there are two types of valid grounds of dismissal:

  • Personal grounds e.g. poor performance or unsatisfactory professional skills, inability to perform the assigned tasks, misconduct within the company.
  • Economic grounds which are economic difficulties facing the relevant business sector at group level within France; technological changes; safeguard of competitiveness; or business closure (see below).

A fixed-term contract can only be terminated as a result of serious/gross misconduct, force majeure or mutual agreement.

Employees who are unfairly dismissed can challenge their dismissals before an employment tribunal. If the judges find the dismissals are unfair, they can grant compensation which is capped at 20 months of pay. This is welcomed reform from the uncapped limits which previously applied.

Redundancy

If the contemplated dismissals are based on economic grounds, the employer must first select which employees to make redundant by considering some selection criteria, including the employees' dependants, length of service, difficulties the employee would face in finding new employment and the employees' professional skills.

The employer must also make every effort to find another position in the same company or group of companies established in France. It must also help employees to adapt to the evolution of their job position by way of training programmes. Non-compliance with these rules makes the redundancy unfair, meaning that employees could claim damages.

Protected employees

Similar to the UK, certain employees have varying levels of protection against dismissal, including pregnant women, disabled workers etc. Further, employee representatives can only be dismissed if a Labour Inspector authorises it.