Currently, the two main hot topics discussed before the Parliament are, on very different matters, the possibility for persons belonging to the same gender to get married, and the wide reform of the employment system. These two draft laws are very controversial and are creating many debates before the Parliament (around 4,500 proposed amendments have been filed in early April by one single political party regarding the employment system proposed reform).

For the purposes of this blog, we have focused here on the employment system proposed reform which results from an important agreement entered into between the French national employers’ and employees’ unions on 11 January 2013.

The main measures of the current draft law are as follows:

Additional rights for employees

  • Negotiations are to be carried out to propose to all employees private health insurance with minimum coverage and financed at least 50% by employers. If the negotiations are not successful, it will be the responsibility of the employers to implement such coverage unilaterally as from 1st January 2016;
  • Fixed term employment contracts (except for certain categories) will be subject to a new social security contribution at a rate which varies depending on the length of the contract, in order to encourage employers to recruit employees under indefinite term employment contracts;
  • Employment contracts for employees working on a part-time basis will need to provide for a minimum of 24 hours worked per week, and supplementary hours worked beyond the normal contractual hours will be subject to an increased hourly rate of remuneration, depending on the number of hours actually worked;
  • In the event of the closing down of a company or one of its establishments, the employer will be required to seek purchasers to take over the closed establishment or company.

More flexibility for employers

  • In the event of serious economic difficulties, employers will be allowed to enter into an agreement negotiated with unions (or employee representatives if there is no union) providing for a reduction in remuneration and/or different terms of working time in exchange for an undertaking from the employer to maintain employment. In the event of refusal by an employee of the agreed terms, it will be possible to terminate such employee’s employment contract for economic reasons on the basis of the individual procedure (i.e. not as a mass redundancy);
  • In addition, employers will be allowed to enter into an agreement setting out the terms of internal mobility (under certain conditions). In case of refusal by an employee to comply with the agreed conditions of mobility, it will be possible to terminate such employee’s employment contract for economic reasons on the basis of the individual procedure;
  • The procedure for mass redundancy dismissals (at least 10 employees in companies having at least 50 employees) would be entirely recast, with the employer being able to negotiate with employee unions the conditions of the terminations and the manner in which the works council is consulted, or if not possible, to set up such conditions in a document created unilaterally, subject to homologation bythe labour administration. New specific preset timeframes would also be applicable;
  • Employment claims would also be subject to reduced limitation periods, and employees entering into a settlement agreement with the employer at the conciliation hearing (first stage of the judicial process in France) would be entitled to a settlement indemnity calculated on the basis of a specific scale, depending on their length of service.

Obviously, these various measures may change depending on the debates before the Parliament, and on the amendments which may be approved. However, we can anticipate that the Government will make its best endeavours to preserve the fragile balance between employers’ duties and employees’ rights which has been hard to find.

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