French President Emmanuel Macron has signed five ordinances making important changes to several aspects of the French employment code. The ordinances, which were immediately published in the French Official Journal on September 23rd, 2017, are aimed in particular at providing employers more flexibility and predictability in labour-management relations.

Several provisions of this ambitious reform – numbering 159 pages and providing for 36 measures – are already in force.

The amendments to existing legislation effected by the Ordinances are built around the following principles defined by the French Government:

  • giving precedence to micro-businesses (TPE) and to small and medium-sized companies (PME);
  •  demonstrating trust in businesses and employees by giving them the ability to anticipate and adapt simply, swiftly and securely;
  • creating new rights and new forms of protection for employees;
  • providing further protection to trade unions and elected staff representatives engaging in social dialogue.

The dates of entry into force may vary for each of the provisions but in any event, the ordinances will be effective no later than January 1st, 2018. A ratification law (loi de ratification) will then be voted by Parliament to ratify the ordinances promulgated by the Government.

Some of the principal changes effected by the ordinances can be summarized as follows:

Collective negotiation: reinforcement and simplification at company-level

  • Simpler and easier access to collective negotiation for micro-businesses and SMEs by allowing direct negotiation with an elected staff representative or with an employee duly appointed for such purpose by a union for SMEs or with employees directly through ratification for micro-businesses (employing 20 employees or less) that do not have elected staff representatives;
  • Wider opportunities to negotiate company-level collective bargaining agreements, which may differ from branch-wide collective bargaining agreements in certain areas;
  • All company-wide collective bargaining agreements concluded with unions will be signed by the majority of representative unions as from May 1, 2018.

Creation of a single employee representative body

  • Merger of the current three main employee representative bodies (Works Council, Health and Safety Committee and Staff representatives) into a single body – the social and economic committee (CSE);
  • Regulation of the costs of expert examinations (expertises) requested by the CSE, by requiring a financial participation of 20% of the cost of the expertise by the CSE for most kinds of expertises (rather than requiring, as is the case currently, for 100% of such costs to be paid by the employer);
  • Setting more precise rules regarding the calculation of the portion of the budget of the CSE allocated to social and cultural activities.

Employment contracts: additional flexibility

  • Arrangements for working from home: creating a right for employees to work from home and simplifying recourse to such arrangements;
  • Increase of legal dismissal indemnity to a quarter of month’s salary per year of seniority (currently a fifth) (this provision is already applicable);
  • Ability to supplement the dismissal letter setting out the grounds for dismissal after such document has been sent to the employee, either spontaneously by the employer or upon request of the employee;
  • Reduction of the statute of limitations for the bringing of dismissal claims to a one-year period (this provision is already applicable);
  • Implementation of mandatory lower and upper limits for damages in the event of unfair dismissal except in case of discrimination, harassment and breach of fundamental rights;
  • Implementation of mandatory lower and upper limits for damages in the event of unfair dismissal except in case of discrimination, harassment and breach of fundamental rights: (i) In companies with at least 11 employees, from three months’ salary minimum (for two years of service) up to 20 months’ salary maximum (for at least 30 years of service); (ii) In companies employing less than 11 employees, the minimum amount set out will range from ½ month of salary to 2.5 month’s salary; the maximum amount remains the same as above.


Streamlining of redundancies procedures

  • Economic grounds for dismissal will be assessed at the French level only, within the same business sector taking into account the results of the French companies of the group (where applicable);
  • Reclassification offers: the requirement to propose redeployment offers shall apply to available positions in France only;
  • Collective voluntary departures will now be regulated by the French employment code.