French employment code reform: Focus on collective negotiation

On September 22, 2017, French President Emmanuel Macron 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 (the “Reform”) – numbering 159 pages and providing for 36 measures – are already in force.

These texts have now been supplemented by a further ordinance (published in the French Official Journal on December 21st, 2017) and by a number of decrees (published over the last few weeks).

Due to the significant amount of amendments to French employment regulation provided by the Reform, we have chosen to focus in our third article on the amendments relating to collective negotiation.

The main aspects of the Reform regarding collective negotiation are as follows.

1. A new hierarchy of rules

As from 1 January 2018, as a matter of principle, collective agreements entered into at the company level will prevail over collective agreements entered into at the sector-wide level, except in limited areas specifically enumerated by law in which collective agreements entered into at sector-wide level imperatively prevails or may prohibit company collective agreements from providing for different stipulations.

The mandatory set of rules will include in particular minimum remuneration, classification, complementary welfare, equality between men and women at work, and certain measures relating to working time, fixed-term and temporary contracts and trial periods. For these areas, collective agreements entered into at sector-wide level will automatically prevail over company collective agreements.

2. Collective negotiation is simplified in companies in which no union delegates have been appointed

As a principle, collective agreements must be entered into with “majority” trade unions, i.e. trade unions which are considered as sufficiently representative in companies (this being determined by the results of the most recent elections of employee representatives at each company level). However, union delegates may generally only be appointed in companies employing at least 50 employees, this preventing collective negotiation in smaller companies.

French law already provided for “alternative” negotiation options available for companies with a lower headcount (e.g. negotiation with employee representatives or with an employee appointed by a trade union). These possibilities have been broadened by the ordinances, which have even created the ability for employers in companies with less than 11 employees to propose for ratification by its staff a draft collective agreement established unilaterally by the employer.