Employment and employee benefits in France: overview

A Q&A guide to employment and employee benefits law in France.

The Q&A gives a high level overview of the key practical issues including: employment status; background checks; permissions to work; contractual and implied terms of employment; minimum wages; restrictions on working time; illness and injury; rights of parents and carers; data protection; discrimination and harassment; dismissals; redundancies; taxation; employer and parent company liability; employee representation and consultation; consequence of business transfers; intellectual property; restraint of trade agreements and proposals for reform.

To compare answers across multiple jurisdictions, visit the Employment and Employee Benefits: Country Q&A tool.

The Q&A is part of the global guide to employment and employee benefits law. For a full list of jurisdictional Q&As visit www.practicallaw.com/employment-guide.

Joël Grangé, Flichy Grangé Avocats
Contents

Scope of employment regulation

1. Do the main laws that regulate the employment relationship apply to:
  • Foreign nationals working in your jurisdiction?

  • Nationals of your jurisdiction working abroad?

Laws applicable to foreign nationals

Foreign nationals working in France can choose the law applicable to their employment contract under Article 8(1) of Regulation (EC) 593/2008 on the law applicable to contractual obligations (Rome I). However, where the applicable law would have otherwise been French law, the Labour Code's mandatory laws apply. This usually applies where employees normally carry out their work in France (Article 8(2), Rome I). Mandatory laws have a much broader scope than public policy rules and are contained in almost all of the Labour Code provisions. They apply regardless of the contract's provisions, unless those provisions are more favourable to the employee (Article 8(1), Rome I).

In contrast, where the law would not have been French law, it is the law chosen by the parties that applies. However, certain French rules apply regardless of this choice.

Special rules apply to posted employees (employees that are sent to a host member state under the framework of a transnational provision of services). They are only subject to the public policy rules listed in Article L.1262-4 of the Labour Code, which apply regardless of the governing law and the employee's nationality. Public policy rules are limited, and mainly cover:

Laws applicable to nationals working abroad

Nationals working abroad can choose the applicable law (Article 8(1), Rome I). Public policy rules and mandatory laws do not apply unless French law is applicable to the contract. Generally, where the employer is French, French courts consider that French law is applicable.

 

Employment status

2. Does the law distinguish between different categories of worker? If so, what are the requirements to fall into each category, the material differences in entitlement to statutory employment rights and are there any maximum time periods for which each category of worker can be engaged?

Categories of worker

The main categories of workers are:

  • Employees.

  • Agency workers.

  • Self-employed.

  • Independent contractors.

Entitlement to statutory employment rights

Employees who are employed under a contract of employment (whether a definite or indefinite term contract) are subject and entitled to all statutory provisions set out in the Labour Code and applicable collective agreements (such as the collective bargaining agreement applicable to the company and/or company wide collective agreements).

Agency workers are workers employed by agency work companies in order to work for client companies (using companies) with a temporary need of workforce. Using companies cannot use interim workforce to fill positions linked to their normal and permanent activity. The agency worker is not linked to the using company by a contract of employment (which is signed with the agency work company). Agency workers are entitled to the same rights and benefits as permanent employees (see Question 15).

The self-employed category consists of independent workers with special skills and state-recognised diploma not working under a contract of employment. Self-employment is open to various areas of business which are not considered as commercial activities (for example, lawyers, notaries, bailiffs, accountants, medical doctors, architects and so on). The self-employed have no entitlement to statutory employment rights but are instead subject to specific regulations (and sometimes professional rules) applicable to their activity. The self-employed usually perform their practice for more than one client/patient.

Independent contractors are companies or self-employed workers which are linked to another contractor by way of contract to perform a service or deliver goods, but which are acting independently from their co-contractors. Independent contractors have no entitlement to statutory employment rights. Their activities are considered as commercial. Independent contractors usually work for more than one client/co-contractor (working for only one client can lead to the recognition of an employment relationship).

Time periods

Agency workers' contracts have the same maximum duration as temporary workers contracts (see Question 15). There is no maximum legal duration for contracts with the self-employed and independent contractors, although the self-employed or contractor may be deemed a permanent employee with an indefinite-term employment contract if a court finds that the self-employed or contractor actually works as a subordinate to the company (see Question 15).

 

Recruitment

3. Are any grants or incentives available for employing people? Does any information/paperwork need to be filed with the authorities or given to new employees when employing people?

Grants or incentives

The state provides various grants and incentives (such as financial aid, and exemptions from and reductions in social security contributions). They are mainly aimed at encouraging employers to recruit individuals under a certain age (usually 26 years) or long-term jobseekers. This is so that they can acquire specific skills in return for a lower salary or get back to work after a long period of unemployment.

Filings

A declaration (Déclaration préalable à l'embauche) must be made by the employer to the French administration prior to hiring. The declaration must be in the form of a single document under which the employer completes several registrations with the various competent administrations (such as the unemployment fund, social security, pension agency and so on) at one time.

Information

The employer must inform the employee within the first two months of the employment of the principal terms of the employment contract (in some cases, a written contract is mandatory, for example for fixed-term contracts). The employer must also inform the employee at the start of the contract of the different collective bargaining agreements applicable within the company. It is also customary to give a copy of the internal rules applicable within the company at the start of the contract.

 

Background checks

4. Are there any restrictions or prohibitions on carrying out background checks in relation to applicants?

Under Article L.1221-6 of the Labour Code, information requested by an employer to a prospective employee is strictly limited to matters linked to the position and must aim at assessing his or her professional skills. Medical checks not linked to the considered position prior to the hiring are prohibited. The validity of the contract of employment was subject to medical fitness for the position (assessed by an occupational doctor). The Labour Law of 8 August 2016 (Loi travail) has removed the initial medical check for most employees.

Asking about an applicant's criminal record (Extrait No 3 du Casier Judiciaire) is neither expressly authorised nor prohibited by the Labour Code. However, since all information requested must be linked to the position, it will only be justified in very few positions, such as ones linked with the regular use of money (for example, banking activities).

 

Permission to work

5. What prior approvals do foreign nationals require to work in your country? What information/paperwork needs to be kept or filed with the authorities when they start work?

Visa

Procedure for obtaining approval. Since 1984, work permits and visas have been granted within the same document and follow a unified process. A foreign national wishing to work in France therefore applies for a work permit (see below, Permits), which will, if granted, authorise them to enter and reside temporarily in France, as well as work in France.

Further, foreign nationals already living in France who have a permanent residence card (carte de résident) can also exercise any professional activity. The permanent resident card can be automatically granted (for example, to foreign children, or parents of a French national, or to foreign nationals having served in the French army) or it can be granted to foreign nationals having legally entered and stayed in France for at least three years.

Additionally, foreign nationals holding a temporary residence card granted on familial grounds (to parents and children of a foreign national legally staying in France) (carte de séjour temporaire "vie privée et familiale") can also exercise any professional activity. The procedure for obtaining the card as well as the costs of obtaining it are similar to those applicable to the permanent residence card.

Finally, a "carte de séjour 'competences et talents'" can be granted for three years to foreign nationals who intend to take part in the economic development of France or their home country.

Cost. The application must be made locally at the préfecture (which represents the government at local level) and costs up to EUR260, unless the applicant is otherwise exempted.

Time frame. Obtaining a permanent or temporary residence card is a lengthy process, which can take up to about six months. Visas such as the Visa de long séjour valant titre de séjour (allowing the beneficiary to work) are renewable. Application for renewal of this type of visa must be made at least two months before it expires.

Sanctions. See below, Permits.

Permits

EU citizens do not need a work or residence permit if they hold a passport or other ID proving that they are EU citizens (Article 45, Treaty on the Functioning of the European Union (TFEU)).

All non-EU citizens must obtain a work permit to work in France. The relevant préfecture will consider the employment situation within its territory or department (département) when deciding whether to grant a work permit.

Procedure for obtaining approval. If the foreign national is living abroad, the employer must apply to the local French unemployment authority. The application is then forwarded to the employment authorities. If they decide that the foreign national can work in France, they issue a temporary one-year work permit.

If non-EU citizens are already French residents and hold a residence permit, they apply to their local police department. If their application is accepted, they receive either a ten-year or temporary work permit.

Cost. The employer of a foreign national who holds a temporary or permanent residence permit must pay a fee (redevance) to the French Office of Immigration and Integration (L'Office français de l'immigration et de l'intégration,). The amount depends on the employee's salary:

  • For an indefinite-term employment contract, the employer must pay 55% of the employee's monthly salary, capped at two and a half times the minimum wage (see Question 9) (amounting to EUR3,666.55).

  • For a fixed-term contract (between three and 12 months):

    • if the employee's monthly salary is EUR1,466.62 or less, the employer must pay EUR74;

    • if the employee's monthly salary is between EUR1,466.62 and EUR2,199.93, the employer must pay EUR210;

    • if the employee's monthly salary is more than EUR2,199.93, the employer must pay EUR300.

  • For a seasonal worker's short-term contract, the employer must pay EUR50 per month.

  • For a temporary contract entered into by a young professional hired under a bilateral agreement on exchange of young professionals, the employer must pay EUR72.

  • For a contract of or exceeding one year, the employer must pay 55% of the employee's monthly salary, capped at two and a half times the minimum wage, amounting to EUR3,666.55.

The employee must pay the cost of the stamp duty necessary to create or renew the residence permit (the price varies between EUR19 and EUR260, unless the employee is exempted under certain circumstances).

Time frame. Obtaining permits is a lengthy process, which can take up to about six months.

There is no specific quota relating to the hiring of foreign nationals. However, before granting work permits, the French administration will consider the:

  • Employment situation in France, in the concerned sector and the employment area (except for certain positions).

  • Specific features of the position.

  • Research undertaken by the employer to hire a national jobseeker.

If the level of unemployment is too high for the concerned position in the concerned employment area, the French administration can refuse to grant the work permit (R.5221-20 et seq, Labour Code).

Sanctions. Failure to comply with immigration procedures is a criminal offence for the employer and employee.

The chief executive can be sentenced to up to five years' imprisonment and a EUR15,000 fine (the amount of the fine is multiplied by five when the company is convicted of the offence). The company can also be made responsible for the payment of a special contribution of EUR17,600.

 

Restrictions on managers and directors

6. Are there any restrictions on who can be a manager or company director?

Age restrictions

Age restrictions depend on the type of company:

  • Corporations. The maximum ages of a chairman of the board or a managing director are 65. No more than one-third of the board members can be older than 70 (unless the memorandum and articles of association specify otherwise).

  • Public companies. Since 2014, at least 20% of the board of public companies must be of each gender.

  • Limited liability companies. There are no legal restrictions on age. However, the memorandum and articles of association can impose an age restriction.

Nationality restrictions

There are no nationality restrictions on managers and company directors, although foreign company directors must hold a residence permit in France.

Other restrictions

Directors cannot hold a mandate and a contract of employment in the same company at the same time unless the employment within the company corresponds to an effective position with technical functions different from the director's duties, with a separate remuneration, and performed as a subordinate to the company.

 

Regulation of the employment relationship

7. How is the employment relationship governed and regulated?

Written employment contract

Employment can be on a full or part-time basis and for an indefinite period. Fixed-term contracts are only permitted in special cases (such as to replace a temporarily absent employee or to meet a temporary increase in the employer's activity).

Employment contracts are not generally required to be written, but certain forms of employment contract must be in writing (see below). The employer must provide the employee with a written statement of the essential terms governing the employment relationship.

A written contract is necessary where:

  • An applicable collective bargaining agreement (CBA) requires it.

  • It is a fixed-term contract.

  • It is a part-time contract.

  • It is a temporary contract.

  • It is an apprenticeship employment contract.

  • It is a professionalisation employment contract.

Oral fixed-term contracts are irrevocably deemed to be indefinite-term contracts and oral part-time contracts are deemed full-time contracts.

Implied terms

In addition to the employment contract, various sources govern the employment relationship, including:

  • EU law.

  • The French Constitution.

  • The Labour Code.

  • Case law.

  • CBAs.

  • Company collective agreements.

  • Internal rules and regulations.

  • Company practices.

The employment contract can only alter these implied provisions if this is to the employee's advantage.

Collective agreements

A CBA is a written agreement, entered into between:

  • One or more trade union(s) representing employees.

  • One or more trade union(s) representing employers in a specific sector (and sometimes, a specific location).

The CBA usually governs:

  • Individual and collective labour relations.

  • Working conditions.

  • Social guarantees.

  • Employee benefits.

Whether a CBA applies depends on the employer's main business activity. A CBA is usually mandatory if the main activity falls within its scope.

Company collective agreements

A company collective agreement is a written agreement entered into between the employer and one or more trade union(s) representing employees that have reached a certain level of audience at the last employees' representatives elections (currently 10%). Company collective agreements can address a variety of topics, including working time, remuneration or gender equality at work. In certain companies, the employer must negotiate on determined topics every year or every three years. A company collective agreement can, in some cases, derogate from the provisions of the CBA or even the law.

To be valid, a company collective agreement must currently be signed by one or more trade union(s) representing employees that have a cumulative audience of at least equal to 30% of the votes cast during the last employees' representatives elections. The Labour Law of 8 August 2016 (Loi travail) provides for the progressive increase to 50% of the cumulative audience of the trade unions necessary to validly sign a company collective agreement. Specific rules apply if there is no union representative (Délégué syndical) within the company.

 
8. What are the main points to consider if an employer wants to unilaterally change the terms and conditions of employment?

Whether or not an employer can change the terms and conditions of employment depends on whether the change results in a modification to the employment contract or a change to the conditions of employment.

If the change affects one (or several) of the essential terms of the employment contract (for example, salary or the duration of work), it is subject to the employee's express consent. The employee's refusal to accept this type of change is not a ground for dismissal, and the employer must give the employee a reasonable period during which to reflect on the proposed change, so that he or she can properly consider it.

If the change is grounded on economic reasons, the employer must, in principle, inform and consult staff representatives before proposing the modification. In this case, the employer must propose the modification by registered letter with acknowledgment of receipt to each concerned employee, and leave them a one-month period to consider the change. If the employee refuses to accept the modification, the employer is then entitled to make the employee redundant on the same economic reasons ground that created the need for the proposed change.

If the modification only consists of a minor change to the conditions of employment (for example, a small change to the workplace), the change anticipated by the employer can be directly applied to the employees. The employee's refusal in this instance could constitute misconduct.

 

Minimum wage

9. Is there a national (or regional) minimum wage?

As of 1 January 2016, the minimum gross monthly wage is EUR1,466.62 for a 35-hour working week.

All employees who are employed under an ordinary employment contract (either indefinite or fixed term) are entitled to the minimum wage.

Collective bargaining agreements also frequently provide for minimum wages (depending on job categories).

 

Restrictions on working time

10. Are there restrictions on working hours? Can an employee opt out on either an individual or collective basis?

Working hours

Usually, employees work 35 hours per week. In addition, employees must not work more than:

  • An average of 44 hours a week during any 12 consecutive weeks.

  • 48 hours during any given week.

  • Ten hours a day.

  • 220 hours of overtime a year (subject to applicable collective bargaining agreements (CBAs) or company collective agreements).

However, employers can agree a longer working week with their employees. In that case, they 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 with trade unions at company level. Law No. 2008-789 reforming working time (Loi portant renovation de la démocratie sociale et réforme du temps de travail) (Working Time Law) and the Labour Law of 8 August 2016 (Loi travail) provide for working time to be reorganised at company level. Working time can notably be reorganised on a multiple-week basis: the employee works an average of 35 hours over four (or more) weeks, while their working time is different each week.

However, statutory restrictions on working time must be met (see above) and the employees duly informed of the working schedule.

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. These executives can:

  • Agree to a set number of days to be worked a year (this number cannot exceed 218 days, allowing, on average, nine additional days off a year).

  • Renounce some of their days off, depending on the applicable CBA. If there is no applicable CBA, they must not work more than 235 days a year.

However, recent case law has considerably increased the conditions to validly implement this type of working time arrangement (most notably, the employer must put in place a procedure designed to regularly check the workload of the concerned employee) and its use is becoming more difficult. The Labour Law of 8 August 2016 (Loi travail) aims at securing this type of arrangement by setting out minimum rules for monitoring the workload of the employees concerned in the case no sufficient provisions are provided for by a collective agreement.

Generally, all employees (including executives) must be granted both:

  • A daily rest period of 11 consecutive hours.

  • A weekly rest period of 35 consecutive hours, including Sunday.

Most French law regarding working time does not apply to senior executives (cadres dirigeants).

The Act of 10 July 2015 (Loi Macron) allows up to 12 Sundays (instead of just five) to be worked on authorisation from the Mayor, and allows shops located in an "international tourism area" to open up until midnight without the hours worked between 9pm and midnight qualifying as night work.

Rest breaks

When employees work more than six hours a day, they are entitled to a rest break of 20 minutes, unless more favourable provisions are made by any applicable CBA.

Shift workers

Shift working is only applicable in certain fields of activity, where it can be authorised by decree, convention or branch, venture or establishment agreement. Supplementary medical supervision is compulsory for shift workers and their maximum working time is strictly limited.

The working time of employees who permanently undertake shift work cannot exceed 35 hours per week (worked week) on average over the year (Article L.3132-15, Labour Code).

In addition, many CBAs provide a minimum rest break for each shift.

 

Holiday entitlement

11. Is there a minimum paid holiday entitlement?

Minimum paid holiday entitlement

Employees are entitled to a minimum of five weeks' paid holiday a year, in addition to public holidays.

The law and collective bargaining agreements grant additional paid leave for:

  • Employees who have reached a specific length of service.

  • Family-related events.

Autonomous executives also benefit from additional days off (see Question 10, Working hours).

Public holidays

France has the following public holidays, which are not included in the minimum holiday entitlement:

  • New Year's Day (1 January).

  • Easter Monday (March/April, this fluctuates each year).

  • Labour Day (1 May).

  • Victory in Europe Day: end of World War II (8 May).

  • Ascension Day (May/June, this fluctuates each year).

  • Whit Monday (May/June, this fluctuates each year).

  • Bastille Day: National Day (14 July).

  • Assumption of Mary (15 August).

  • All Saints' Day (1 November).

  • Veterans Day/Remembrance Day: end of World War I (11 November).

  • Christmas Day (25 December).

 

Illness and injury of employees

12. What rights do employees have to time off in the case of illness or injury? Are they entitled to sick pay during this time off? Who pays the sick pay and, if the employer, can it recover any of the cost from the government?

Entitlement to paid time off

Article L.1226-1 of the Labour Code provides that the employee's remuneration must be maintained for a certain length of time (up to 90 days), depending on the employee's seniority and provided that the employee:

  • Has at least one year's service with the employer.

  • Provides a medical certificate within 48 hours of the absence.

  • Is covered by social security.

  • Benefits from medical care either in France or in a member state.

In addition, collective bargaining agreements often specify that the employer must supplement social security payments for a certain period of time, up to the level of all or part of an employee's salary if that employee has attained a specific length of service. This is a personal obligation for the employer and it cannot recover these payments from the social security system. However, most companies are insured to cover these obligations.

Entitlement to unpaid time off

Employees who are absent due to illness or injury must obtain a medical certificate covering the period of sick leave. During the period of illness or injury, the work contract is suspended. Unless it is necessary to replace the sick employee with another employee under an indefinite term contract, the former cannot be dismissed.

Recovery of sick pay from the state

Employees who are absent due to illness or injury receive daily indemnities from the social security system (for a maximum of three years).

 

Statutory rights of parents and carers

13. What are the statutory rights of employees who are:
  • Parents (including maternity, paternity, surrogacy, adoption and parental rights, where applicable)?

  • Carers (including those of disabled children and adult dependants)?

Maternity rights

Employees are entitled to the following maternity leave:

  • For a single birth bringing the mother's number of children to one or two: 16 weeks, consisting of:

    • six weeks before childbirth;

    • ten weeks after childbirth.

  • For a single birth bringing the mother's number of children to three or more: 26 weeks, consisting of:

    • eight weeks before childbirth;

    • 18 weeks after childbirth.

  • For a multiple birth of twins: 34 weeks, consisting of:

    • 12 weeks before childbirth;

    • 22 weeks after childbirth.

  • For a multiple birth of triplets or more: 46 weeks, consisting of:

    • 24 weeks before childbirth;

    • 22 weeks after childbirth.

If the mother suffers an illness during pregnancy, she is entitled to two more weeks before the childbirth and four more weeks after the childbirth.

The relevant collective bargaining agreement (CBA) can grant additional maternity leave. Employees can choose to increase the proportion of maternity leave taken after childbirth, decreasing the proportion taken before childbirth, if a physician authorises this.

Following maternity or adoption leave (see below, Adoption rights), employees have the right to return to their original position (or a similar position with the same remuneration). Additionally, except in cases of serious misconduct or cases where it is impossible to maintain the contract, employees cannot be dismissed during:

  • Pregnancy.

  • Maternity leave after childbirth.

  • The ten weeks after the end of maternity leave.

Employees with at least one year's service on the date of the birth or adoption can either:

  • Take unpaid parental leave up until their child's third birthday (see below, Parental rights).

  • Return to work on a part-time basis.

Employees on maternity, paternity or adoption leave are entitled to a daily allowance from the social security authorities. The employer is not required to pay salary during this time. However, CBAs frequently state that the employee's salary must be paid in full if the employee has a certain length of continuous service (usually one year's service on the date of the child's birth or adoption).

Paternity rights

Male employees are granted three days' leave on the birth or adoption of a child. They are also entitled to 11 consecutive days' paternity leave (18 days if there are multiple births or adoptions), which must be taken within the four months following the birth or adoption. As for the mother, the father cannot be dismissed during the ten weeks following the birth of the child, except for the reasons described above (see above, Maternity rights).

Male employees are entitled to a daily allowance from the social security authorities (see above, Maternity rights), but the employer does not have to maintain the employee's remuneration during the leave (unless specifically provided for by any applicable CBA).

Surrogacy

Surrogacy is prohibited in France, and there are therefore no specific provisions covering this.

Adoption rights

The following rules apply to leave:

  • Before adoption. Employees authorised to adopt by social services (Direction des Affaires Sanitaires et Sociales) can take unpaid leave of up to six weeks if they travel abroad to adopt a child.

  • After adoption. If the adoption leave is taken by only one parent: all employees authorised to adopt by social services have the following rights to leave:

    • for adoption of a single child bringing the parent's number of children to: one or two - ten weeks; three or more - 18 weeks.

    • for multiple adoptions, adoption of twins, triplets or more: 22 weeks.

If the adoption leave is shared between both parents: the adoption leave is increased by 11 days (or by 18 days in the case of adoption of twins, triplets or more).

The total amount of adoption leave taken cumulatively by the mother and the father must not exceed these limits (unless a CBA grants additional rights).

Adoptive parents are entitled to a daily allowance from the social security authorities (see above, Maternity rights).

Parental rights

Employees who have worked for at least one year before the date of their child's birth, or before welcoming a child no older than 16 years to their home with a view to adoption, can take parental leave or work part-time. This right lasts until the child's third birthday, unless the child was aged between three and 16 on arrival, in which case the adoptive parent can take one year's parental leave from the date of arrival.

If employees take parental leave, their employment contract is suspended and the employer does not have to pay compensation. However, the employees can receive certain indemnities from the social security system.

Parents can also benefit from additional leave when their child is sick, which usually amounts to between three and five days depending on the child's age and the parent's number of children. However, if the child suffers from a serious illness or disability, the parents can ask to work part-time or suspend their employment contract for a maximum of six months. They can also take a specific leave of 310 days over three years when the child suffers from a severe illness, disability or accident, which requires continuous parental presence or constraining care.

The Law of 9 May 2014 allows employees to renounce to some of their holiday entitlements (above the first 24 days of holiday) and give them to a colleague who needs resting days to take care of a seriously ill child. However, the employer is not obliged to accept this, and can refuse or partially accept it.

Carers' rights

Employees who have worked at least two years who are carers can take specific unpaid leave of three months, possibly renewable (up to a year).

 

Continuous periods of employment

14. Does a period of continuous employment create any benefits for employees? If an employee is transferred to a new entity, does that employee retain their period of continuous employment? If so, on what type of transfer?

Benefits created

Depending on the applicable collective bargaining agreement and company collective agreements, benefits linked to service mainly include rights to:

  • Certain leaves of absence (for example, parental leave (see Question 13, Parental rights)).

  • Increased protection on dismissal (see Question 20, Protection against dismissal).

  • Maintain salary during illness or maternity leave (see Questions 12 and 13).

  • Participate in the election of employee representatives and be a candidate.

  • Benefit from profit-sharing plans.

  • Seniority measures.

Consequences of a transfer of employee

The employees' period of continuous service is carried over on a transfer of undertakings under the Employee Transfer Rules (Article L.1224-1, Labour Code) (see Question 24).

 

Fixed term, part-time and agency workers

15. To what extent are temporary and agency workers entitled to the same rights and benefits as permanent employees? To what extent are part-time workers entitled to the same rights and benefits as full-time workers?

Temporary workers

Temporary and agency workers are entitled to the same rights and benefits as permanent employees regarding:

  • Working hours.

  • Night work.

  • Weekly time-off and statutory holidays.

  • Health and safety in the workplace.

  • Women, children and young workers' work.

In addition, the remuneration of an agency worker cannot be less than that of a permanent employee with the same duties in the same company.

Temporary and agency workers cannot benefit from the company's mandatory and optional profit-sharing schemes, but are entitled to benefit from the mandatory and optional profit-sharing schemes of the agency with which they are under contract.

Agency workers

Fixed-term employees. For fixed-term employment contracts, temporary contracts generally contain a fixed term not exceeding 18 months (renewal included). Otherwise, the contract may be deemed to be a permanent contract with the temporary employment company (Article L.1251-40, Labour Code) from the beginning of the worker's assignment. A breach of these provisions may be punished by a fine up to EUR3,750.

In general, if the employer fails to comply with the provisions regarding fixed-term contracts, the employee is deemed to be a permanent employee. Notably, this is the case where there are multiple successive fixed-term contracts with the same employee. Additionally, fixed-term contracts cannot, in principle, be terminated before the term fixed in the contract, unless force majeure is qualified.

However, there are some exceptions to the rule, for example, where a temporary contract for an unfixed-term (with a specified minimum duration) is used when the employer ignores the future duration of the contract at the time of its conclusion (Article L.1251-11 et seq, Labour Code). In these cases, the contract ends when the purpose for which it has been concluded ceases (such as when the fixed-term contract replaces an employee on sick leave).

Employees under a fixed-term contract are entitled to a specific indemnity amounting to 10% of the total gross remuneration paid during the contract at the end of the term of their contract and provided that no indefinite-term contract of employment is agreed at the end of it.

Independent contractors. For independent contractors, if a court finds that the contractor actually works as a subordinate to the company he/she is contracted to work with, the contractor may be deemed a permanent employee with an indefinite-term employment contract. The company can be held liable for undeclared work and possibly illegal loan of workforce.

Part-time workers

Temporary and agency workers are entitled to the same rights and benefits as full-time employees, in particular regarding:

  • Probationary period.

  • Continuous employment.

  • Holiday entitlement.

The Act of 14 June 2013 (as modified by the Order dated 29 January 2015) requires that part-time workers' contracts must provide for a minimum of 24 hours per week working time (Article L.3123-14-1, Labour Code) unless a lesser number of hours is authorised by the applicable collective bargaining agreement. The 24-hour minimum period does not apply to fixed-term contracts of a duration of up to seven days.

 

Data protection

16. Are there any requirements protecting employee privacy or personal data? If so, what are an employer's obligations?

Employees' data protection rights

Specific provisions aim to protect employees' data in the context of medical records, computerised employment records and recruitment.

Employers' data protection obligations

Data protection is regulated by the:

  • Data Protection and Civil Liberties Act of 6 January 1978. Individuals can access, modify, correct and delete any personal data concerning them (Articles 38 to 43). Without obtaining the relevant party's prior written approval and the prior written approval of the Data Protection Authority (Commission Nationale de l' Informatique et des Libertés (CNIL)), it is prohibited to record or store personal data relating to (Article 8):

    • racial or ethnic origins;

    • political, religious or philosophical opinions;

    • union membership;

    • medical information;

    • sexual orientation.

    However, this does not apply to databases processed by religious bodies, political parties or unions. Any breach of this rule is punishable by five years' imprisonment and a fine of up to EUR300,000 (Article 226-19, Criminal Code).

  • Labour Code. See above, Employees' data protection rights.

  • Civil Code. Individuals are entitled to respect for their private life (Article 9).

  • Criminal Code. The following are punishable by five years' imprisonment and a fine of up to EUR300,000:

    • processing a database that contains personal data without following the correct procedure (Article 226-16);

    • storing personal data beyond the time limit stated in the declaration without the prior written approval of the CNIL (Article 226-20);

    • processing personal data without taking all relevant steps to keep the information confidential, in particular, to prevent it from being disclosed to unauthorised third parties (Article 226-17);

    • collecting data by fraudulent, unfair or unlawful means, or processing information against a person's will (Article 226-18);

    • diverting personal data from its proper purpose (at the time of its recording, classification, transmission or any other form of processing) as defined by the legislative provision or regulation or decision of the CNIL authorising automated processing, or by the preliminary statement made before the implementation of that processing (Article 226-21).

    In addition, the CNIL regularly issues recommendations, which must be used as guidelines.

 

Discrimination and harassment

17. What protection do employees have from discrimination or harassment, and on what grounds?

Protection from discrimination

Discrimination is prohibited throughout the employment relationship. It is forbidden to punish or dismiss employees, or exclude potential employees from the recruitment process, on the basis of their (Article L.1132-1, Labour Code; Articles 225-1 et seq, Criminal Code):

  • Origin.

  • Gender.

  • Sexual orientation.

  • Morals.

  • Age.

  • Marital status.

  • Pregnancy.

  • Religious beliefs.

  • Nationality.

  • Ethnic or racial origin.

  • Genetic characteristics.

  • Political opinions.

  • Trade union activities.

  • Physical appearance.

  • Family name.

  • Medical condition.

  • Disability.

In addition, employees cannot be dismissed for going on strike in accordance with legal provisions.

Discrimination is a criminal offence punishable by:

  • For the employer's legal representative (namely the chief executive officer, most of the time), a maximum of three years' imprisonment and a fine of EUR45,000 (Article 225-2, Criminal Code).

  • For the employer (as a company), a fine of up to EUR225,000 (Article 225-4, Criminal Code).

The qualifying period for claims concerning discrimination is five years from the date of its revelation (Article L.1134-5, Labour Code).

Protection from harassment

Employees are protected from sexual and moral (that is, psychological) harassment (Articles L.1153-1 and L.1152-1, Labour Code). Harassment is a criminal offence punishable by up to two years' imprisonment and a maximum fine of EUR30,000 (Article 222-33-2 of the Criminal Code).

Any disadvantageous measure taken (such as a dismissal) resulting from discrimination, or an act of sexual or psychological harassment (or the reporting of these acts), is void. The employee must be reinstated or receive compensatory damages. The Labour Law of 8 August 2016 provides for a minimum of six months of damages if the employee does not ask to be reinstated, in addition to the payment of the employee's remuneration for the period covered by the annulment. Additionally, the employer is liable for its employees' mental health and must take measures to ensure that they work in a safe environment.

The law dated 6 August 2012 has toughened sanctions against persons guilty of harassment. This law has introduced into the Labour Code a new offence of discrimination following harassment (Article 225-1-1, Criminal Code). This law also imposes obligations on the employer (such as to display the text of the Criminal Code on harassment at the workplace) and gives a right of alert (droit d'alerte) to the staff representatives on the matter.

The qualifying period for claims concerning harassment is five years before the civil court and three years before the criminal courts.

 

Whistleblowers

18. Do whistleblowers have any protection?

The Data Protection Authority (CNIL) Regulation 2005-305 (modified in 2010 and 2014) on whistleblowing sets out rules regarding employers' whistleblowing procedures (for example, employers must declare the use of whistleblowing procedures to the CNIL). To be authorised, a procedure must state that employees who use it in good faith will not be punished if they disclose information that turns out to be false. Any abuse of the procedure by an employee can result in the employer imposing a disciplinary measure.

Generally, any retaliation against a good-faith whistleblower is prohibited. The dismissal of a good-faith whistleblower for having revealed facts that could amount to an offence or a crime is null and void, allowing the employee to ask for his/her reinstatement.

 

Termination of employment

19. What rights do employees have when their employment contract is terminated?

Notice periods

The parties must observe and cannot waive the required notice periods before an indefinite-term contract is terminated. There are exceptions to this rule (for example, dismissals for gross misconduct).

The notice period depends on the employee's length of service.

Employees who are dismissed or made redundant are entitled to pay in lieu of notice if they are not required to observe their notice period.

Severance payments

Severance pay is only awarded if:

  • The employer terminates an indefinite-term contract.

  • The employee has the minimum length of service required by the Labour Code or an applicable collective bargaining agreement (CBA) (usually one year).

Severance pay depends on the employee's length of service and the relevant CBA's provisions. It is generally calculated on the basis of an employee's average salary (often including bonuses as well as basic salary) during the last year of employment. Employees receive statutory severance pay (that is, one fifth of monthly salary for each year of service for the first ten years of service and one third for each year above ten years of service) if no CBA applies or the CBA rate is lower than the statutory amount.

Employment contracts can also provide for severance payments, provided that their rate is higher than that of the CBA or the statutory amount. However, severance payments in company directors' employment contracts must be approved by the company's corporate governance body.

The consequences of unfair dismissal in terms of severance payments are detailed below (see Question 20, Protection against dismissal).

Procedural requirements for dismissal

In the case of an indefinite-term employment contract, there must be real and serious grounds for dismissal, either on personal or economic grounds (see Question 20, Protection against dismissal).

Once an employer believes that there is a valid ground for dismissal (except for redundancies, which are dealt with at Question 21), it must hand deliver or send by registered mail against acknowledgement of receipt a letter giving the employee five working days' notice of a meeting. This letter must set out the (Articles L.1231-1 et seq, Labour Code):

  • Time and place of the meeting.

  • Employee's right to be accompanied by a fellow employee or by somebody belonging to a list established by the Préfet (French local authority).

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 notify the employee of its decision (at the earliest, on the third working day following the meeting) and, as the case may be, specify the grounds for dismissal in a letter sent by registered mail against acknowledgement of receipt. The employee must acknowledge receipt and can dispute the dismissal's grounds before an employment tribunal.

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 number of the employees' dependants (especially for single parents).

  • The employees' length of service.

  • Potential difficulties that the employees may face in finding new employment (such as age or disability).

  • The employees' professional skills.

The employer must also make every effort, for employees facing redundancy, to find another position in the same company or group, worldwide. 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.

Employees who are made redundant must be given priority during a one-year period if their previous, or a similar, position becomes vacant within their former employer.

If the dismissal procedure is not followed, the employee can claim an indemnity of up to a month's salary.

When terminating an employment contract the employer must also perform some incidental duties. The employer must:

  • Give the employee a:

    • certificate of employment;

    • receipt acknowledging full settlement; and

    • certificate for the State Unemployment Fund (Pôle Emploi) to enable the employee to apply for unemployment insurance benefits.

  • Send the State Unemployment Fund a copy of the certificate that enables the employee to gain the unemployment insurance benefits.

  • Declare to the administration the:

    • number of dismissals concerning employees over the age of 55 years;

    • age of the employee when he/she is leaving the company;

    • amounts paid to the employee because of the dismissal (except some sums that are strictly the counterparts of the employment).

If the dismissal is made on economic grounds, the employer must inform the administration of the dismissal. If more than one dismissal is made on economic grounds, the employer must communicate to the administration the documentation provided to the staff representatives.

 
20. What protection do employees have against dismissal? Are there any specific categories of protected employees?

Protection against dismissal

In the case of an indefinite-term employment contract, there must be real and serious grounds for dismissal.

All employees are entitled to protection against dismissal regardless of their length of service. However, employees can be subject to a probationary period that enables the employer to assess employees' skills. This probationary period is not automatic and must be provided in the employment contract (Article L.1221-23 et seq, Labour Code). Article L.1221-19 of the Labour Code provides that the probationary period can be for two to four months (depending on the employee's position), unless provided for in a more favourable way in the employment contract or in the applicable collective bargaining agreement if concluded after 27 June 2008. During this period, the employer or the employee can terminate the contract without having to justify their decision, and without the obligation to respect the schedules and formalities normally applicable to dismissals or resignations. However, case law tends to reduce this absolute right by punishing abusive terminations, such as terminations based on discrimination, causing harm or not relating to the employee's skills.

In addition, termination of the employment contract during the probationary period is subject to a notice period.

There are two types of valid grounds of dismissal:

  • Personal grounds. These can include:

    • poor performance or unsatisfactory professional skills;

    • inability to perform the assigned tasks;

    • misconduct within the company.

    An employee's repeated absence or absence over a long period of time (which is not related to a work-related accident or illness) can also constitute, in certain circumstances, valid grounds for dismissal.

  • Economic grounds. The Labour Code permits the following main economic grounds for dismissal:

    • economic difficulties facing the relevant business sector at group level;

    • technological changes;

    • safeguard of competitiveness;

    • business closure.

However, a fixed-term contract can only be terminated where any of the following occurs:

  • Serious or gross misconduct.

  • An act of God.

  • Mutual agreement.

In addition, an employee can terminate a fixed-term contract unilaterally if another employer offers them an indefinite-term employment contract.

Employees who are unfairly dismissed can challenge their dismissals before the employment tribunal. If the judges find the dismissals are unfair, they can grant compensation. An employee is entitled to a minimum of six months' pay as compensation if the dismissal is deemed unfair, if both:

  • They have worked for more than two years for their employer.

  • The employer has at least 11 employees.

Compensation is usually financial, but in some cases employees have a right of reinstatement. This is where dismissals are not unfair but void, including:

Protected employees

Certain employees have varying levels of protection against dismissal, including:

  • Pregnant women.

  • Employees on sick leave as a result of a work-related illness or accident.

  • Employee representatives.

Employee representatives can only be dismissed if the Labour Inspector authorises it.

 

Redundancy/layoff

21. How are redundancies/layoffs defined, and what rules apply on redundancies/layoffs? Are there special rules relating to collective redundancies?

Definition of redundancy/layoff

A redundancy is a dismissal for economic grounds, which the Labour Code defines as any of the following:

  • Economic difficulties facing the relevant business sector at group level.

  • Technological changes.

  • Safeguard of competitiveness.

  • Business closure.

The Labour Law of 8 August 2016 (Loi travail) has modified the legal definition of the economic grounds for dismissal to insert the last two grounds, which were already recognised by case law, under Article L.1233-3 of the Labour Code. The new definition will be applicable from 1 December 2016.

If the employees contest the redundancy as unfair dismissal before the courts, the employer must be able to provide evidence of the grounds for redundancy that appear in the dismissal letter.

For collective redundancies, the employer must send a detailed note to the staff representatives for the purpose of the information and consultation process which:

  • Explains the grounds for the redundancy.

  • Provides some evidence of the existence of an economic motivation.

See below, Collective redundancies.

Procedural requirements

The redundancy procedure to be followed depends on a number of factors, including:

  • The number of employees being made redundant.

  • The size of the employer's workforce.

  • Whether the employer has staff representation bodies.

  • The time frame for the redundancies.

  • Whether or not the works council appoints a chartered accountant for assistance.

The following procedure applies to restructurings and redundancies of at least ten employees over a 30-day period where the employer has both:

  • At least 50 employees.

  • A works council.

The law on job security (loi de sécurisation du l’emploi) dated 14 June 2013 has significantly modified the procedure concerning collective redundancies (with a choice between a negotiated procedure with the representatives of the trade unions (leading to the signature of a collective agreement) or a unilateral process, a new timeline of procedure, and an increase in the role of the Labour administration).

The employer must start a two-stage works council information and consultation process, either concurrently or consecutively. The employer must take the works council's opinion into consideration, although it is not binding.

Restructuring. The employer must complete this procedure before reaching a final decision on the planned restructuring (Articles L.2323-15 et seq, Labour Code). Among other things, the employer must:

  • Provide detailed information about the reasons for the restructuring.

  • Allow the works council sufficient time to review these issues.

  • Answer all questions the works council raises.

Since 1 April 2014, companies with over 1,000 employees must, before closing a site, look for a potential buyer for the site concerned (Articles L.1233-57-9 and L.1233-57-10, Labour Code). The sanction for not complying with this obligation is the refusal of the administration approval required for the collective redundancy plan (see below,Collective redundancies). From 1 November 2014, companies with less than 250 employees must inform employees of any operation resulting in the sale of more than 50% of the equity of the company to allow them to present an offer to buy the equity.

Redundancy/layoff pay

In addition to the plan's benefits (see above), employees who are made redundant are entitled to:

Collective redundancies

The employer must complete this procedure before reaching a final decision on the contemplated redundancies (Articles L.1233-21 et seq, Labour Code):

  • Among other things, the employer must set up a collective redundancy plan and inform and consult the works council on this plan.

  • The collective redundancy plan must either be in the form of a collective agreement signed with representatives of trade unions and validated by the administration, or a unilateral document drafted by the employer and approved (homologué) by the administration (Direccte). The control of the Direccte will be more important in the second scenario.

  • The plan provides measures that encourage the redeployment (including in foreign locations, if the employee is willing) or retraining of employees facing redundancy. The works council or representative trade unions often negotiate an increase in severance pay.

  • The works council (as well as trade union representatives, where a negotiation takes place) can be assisted by an expert or a chartered accountant paid for by the employer. In particular, the expert's mandate is to assist the works council with all financial and economic issues and help the works council analyse the economic rationale behind the contemplated collective redundancies. Experts can access the same documents as auditors and can request any document they consider useful within the employer and its group of companies. Depending on the number of redundancies considered, the works council has between two and four months to give its opinion (except as provided otherwise in the potential collective agreement signed with trade union representatives).

  • The employer can inform employees of their redundancy in writing after the notification of the Dirrecte of its approval of the decision (decision d'homologation) in the case of the unilateral procedure or validation decision (decision de validation) in the case of the negotiated procedure with trade union representatives.

  • The employer must offer each employee facing redundancy the option of taking advantage of a redeployment programme (which varies depending on the size of the employer's workforce).

  • If the attempts at redeployment fail, the employer must inform the administration of the notified redundancies.

 

Employee representation and consultation

22. Are employees entitled to management representation (such as on the board of directors) or to be consulted about issues that affect them? What does consultation require? Is employee consultation or consent required for major transactions (such as acquisitions, disposals or joint ventures)?

Management representation

The works council is the main employee representative body for employers with at least 50 employees. It can appoint two of its members to attend board and shareholders' meetings.

It is possible to regroup the different employee representatives bodies, or some of them, into one body. The procedure differs depending on the size of the company.

The law on job security has introduced the obligation for certain types of large companies (with at least 1,000 employees) to have employees' representatives on the board, with voting rights.

Consultation

The works council has wide-ranging powers, and must be informed and consulted on almost all major company decisions, including:

  • Matters relating to the employer's:

    • organisation;

    • management;

    • general running.

  • Decisions that are likely to affect:

    • the volume or structure of the workforce;

    • working hours and conditions;

    • training.

  • Restructuring operations and collective redundancies.

  • A change in the company's economic or legal structure, especially in the case of mergers or transfers of undertakings, or major changes in the production structure of the company, as well as of the takeover or sale of subsidiaries.

In the case of a public bid, the head of the company must inform the works council as soon as a takeover bid (offre publique d'achat) launched against a company or a public offer of exchange (offre publique d'échange) has been brought to their knowledge. In the case of a takeover bid, the target company must consult the works council before the board's decision on the bid. If the works council deems it necessary, it can invite the entity that launched the bid to a meeting to present its project to the works council (Article L.2323-35, Labour Code). However, this opinion is not binding on the employer.

Similarly, when a concentration is notified to the European Commission or the French national authorities for merger control and competition regulation, the head of any undertaking which is deemed a party to the concentration must inform the works council of the expected impact of the concentration on competition within three days of the publication of the submission notice (Article L.2323-34, Labour Code).

The consultation process requires the employer to (Article L.2323-4, Labour Code):

  • Communicate the works council precise written information.

  • Give motivated answers to its comments on the projects subject to consultation.

Major transactions

Employees are consulted through their elected representatives, not directly, on major transactions (see above, Consultation).

 
23. What remedies are available if an employer fails to comply with its consultation duties? Can employees take action to prevent any proposals going ahead?

Remedies

If the chief executive, or a representative, breaches the consultation provisions, an offence is committed, punishable by a maximum fine of EUR7,500 (EUR15,000 for repeated offences).

The company is also liable to pay a fine of EUR37,500.

Employee action

The works council and/or the unions are entitled to obtain an injunction to suspend the implementation of the decision until they are properly informed and consulted.

 

Consequences of a business transfer

24. Is there any statutory protection of employees on a business transfer?

Automatic transfer of employees

Employees are automatically transferred if there has been a transfer of an autonomous economic entity (although the former employer can, with the relevant employees' approval, agree to retain certain employees) (Employee Transfer Rules (Article L.1224-1, Labour Code)). An autonomous economic entity is defined as an organised group of persons, with its own operating resources, clients and line of business.

The Employee Transfer Rules also apply to either:

  • A transfer of part of the business.

  • A change in service providers, depending on the circumstances.

Protection against dismissal

Dismissals implemented by the transferor before the transfer are prohibited and deemed void if they are to prevent the Employee Transfer Rules from applying (except for court-approved restructuring or insolvency proceedings or, under certain circumstances, for large companies with at least 1,000 employees). The relevant employees are entitled to reinstatement with the transferee or damages.

Dismissals implemented by the transferee after the transfer are subject to the usual rules on dismissals (see Question 19).

Harmonisation of employment terms

Employees' collective employment rights are not maintained, except for a limited period of time (usually 15 months), as collective agreements are not transferred to the transferee.

The new employer must try to negotiate a new collective agreement (accord de transition ou d’adaption) that defines the transferred employees' collective rights. Under the Labour Law of 8 August 2016 (Loi travail), if an agreement is not reached, the transferred employees continue to benefit from their last annual remuneration (before the Labour Law, employees would benefit from their individual acquired rights (avantages individuels acquis)).

The transferred employees benefit from the existing collective agreements already applicable to their new employer.

Employment contracts are automatically transferred where the Employee Transfer Rules apply, without any modification. The terms and conditions of the transferred employees should therefore not be modified after the transfer.

The courts sometimes accept that the transferred employment contract can be modified following the transfer, but on the strict conditions that both:

  • The employee expressly agrees to the modification (that is, they accept the modification in writing, while entering into an amendment to their initial employment contract).

  • The new employer does not actually commit fraud to the Employee Transfer Rules. Courts notably rule for fraud where the new employer has proposed a new employment contract to the transferred employees on the day of the transfer (Supreme Court, 9 March 2004, No. 02-42.140), or when the proposed modification actually meant that the employee was downgraded (Supreme Court, 14 January 2004, No. 01-45.126).

 

Employer and parent company liability

25. Are there any circumstances in which:
  • An employer can be liable for the acts of its employees?

  • A parent company can be liable for the acts of a subsidiary company's employees?

Employer liability

An employer can generally be held:

  • Civilly liable for its employees' acts.

  • Criminally liable for breaches of employment law that its representatives commit.

Parent company liability

In principle, a parent company cannot be held liable for the acts of a subsidiary company's employees, unless it has acted as their employer (for example, by directly supervising them). However, in specific cases where a French subsidiary of a foreign group is closed down, the courts can hold the foreign parent company liable for payment of severance indemnities, although this is rare.

 

Employer insolvency

26. What rights do employees have on the insolvency of their employer? Is there a state fund which guarantees repayment of certain employment debts?

Employee rights on insolvency

Employees employed by a company subject to an insolvency procedure (whether reorganisation proceedings (redressement judiciaire) or a compulsory liquidation (liquidation judiciaire)) remain employed by the company until their potential dismissal for economic reason (redundancy). The redundancies are decided by the judge in charge of following up the procedure, except in the case of a judicial winding-up where the employees are made redundant by the liquidator following the judgment providing for the winding-up. Both require the drawing up of a collective redundancy plan if the conditions relating to the number of redundancies and employees within the company are met.

State guarantee fund

Employees have the status of preferred creditors. The preference is divided between privileged debts and over privileged debts (super privilège). Employees benefit from the protection of the Salary Guarantee Insurance scheme, which is funded by a monthly contribution levied on salary. The guarantee applies to salary and various indemnities owed to the employee in the case of redundancy but is limited, depending on seniority, to a maximum of EUR77,232.

 

Health and safety obligations

27. What are an employer's obligations regarding the health and safety of its employees?

The head of the employer's organisation (chief executive) can be held criminally liable for breaches of health and safety rules (Labour Code).

Employers also have an absolute contractual duty to protect their employees' safety. For example, the employer can be considered to have made an inexcusable error (faute inexcusable) in the event of a suicide on the workplace (Court of Appeal of Versailles, 19 May 2011, Renault SA).

Risk prevention

To avoid liability, the chief executive must ensure that legal provisions concerning safety in the workplace are strictly followed at all times. It is also necessary to evaluate the risks to employees' health and safety when selecting:

  • Manufacturing processes.

  • Work equipment.

  • Chemical substances to be used in the work process.

  • The workplace's layout or organisation.

Having made this assessment, the chief executive must adopt a risk prevention approach by, for example:

  • Adapting work to the employee.

  • Taking into account technological developments.

  • Replacing something dangerous with something less (or not) dangerous.

The risk assessment must be recorded in a written document (Document unique d'évaluation des risques), which must be accessible to:

  • The Health, Safety and Working Conditions Committee (Comité d'Hygiène de Sécurité et des Conditions de Travail).

  • Employee representatives or, in their absence, any person subject to a health or safety risk.

  • The occupational doctor.

  • Control agents.

Failure to record in writing or update (at least each year) the risk assessment results is punishable by fines of:

  • EUR1,500 for the chief executive.

  • EUR7,500 for the employer.

The employer must also establish a record for each employee who is exposed to one or multiple professional risks, a dangerous working environment or to intensive working schedules. That record must be transmitted to the occupational doctor.

Employees subject to difficult working conditions (including night shifts, exposure to noise or chemical agents) benefit from a "difficult working conditions account" (Compte personnel de prévention de la pénibilité) where they collect points that can be converted into training or be used to reduce their working time or retire early.

Additionally, non-compliance with Labour Code requirements regarding health and safety is punishable by a fine of EUR3,750.

Work-related accidents

Employees who suffer work-related accidents are compensated by a lump-sum indemnity paid by the social security system and the employer.

If the employer is guilty of gross negligence or wilful misconduct, the employer fully compensates the employee and can also be held liable for:

  • The endangerment of the life of others (Article 223-1, Criminal Code).

  • In cases of death through breach of a duty of care or a safety regulation, involuntary manslaughter (Article 221-6, Criminal Code). This offence is punishable by both:

    • five years' imprisonment;

    • a fine of EUR75,000.

When the employer is found guilty of gross negligence, the employee receives a higher indemnity through the social security system, which is compensated by the employer paying higher social security contributions.

 

Taxation of employment income

28. What is the basis of taxation of employment income for:
  • Foreign nationals working in your jurisdiction?

  • Nationals of your jurisdiction working abroad?

Foreign nationals

Foreign nationals who are French tax resident are taxed as French nationals on their gross salary, net of social security contributions. Tax residents are persons to whom one of the following applies:

  • They live in France or have their main place of residence in France.

  • They undertake their main professional activities in France.

  • The centre of their economic interests is in France.

There is a 10% professional expenses allowance deduction (limited to EUR12,170).

If a foreign national is not French tax resident and carries out a professional activity in France, a withholding tax at a progressive rate of 0%, 12% and 20% is imposed on salary payments (unless a double taxation treaty provides otherwise).

Nationals working abroad

If French nationals are French tax resident, they are taxed on their total income, regardless of its source (unless a double taxation treaty provides otherwise).

If they are not French tax resident, no tax is paid in France on income derived from work carried out abroad.

 
29. What is the rate of taxation on employment income? Are any social security contributions or similar taxes levied on employers and/or employees?

Rate of taxation on employment income

French employment income is taxed according to a progressive tax rate. The rates on income earned in 2013 are:

  • 0% for income under EUR9,700.

  • 14% for income from EUR9,700 to EUR26,791.

  • 30% for income from EUR26,791 to EUR71,826.

  • 41% for income from EUR71,826 to EUR152,108.

  • 45% for income over EUR152,108.

Social security contributions

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%. However, some contributions are capped for wages up to four or eight times the social security ceiling (EUR12,872 or EUR25,744 per month for 2016; the security ceiling was revaluated at EUR3,218 per month for 2016).

The employer is liable to pay social security contributions and must withhold the employee's share from the gross monthly salary. All employers paying more than EUR20,000 of social security contributions per year must declare and pay their social security contributions online.

 

Bonuses

30. Is it common to reward employees through contractual or discretionary bonuses? Are there restrictions or guidelines on what bonuses can be awarded, whether generally or in particular sectors?

It is common practice to reward employees through bonuses. Case law distinguishes between discretionary and contractual bonuses:

  • Discretionary bonuses. Bonuses are discretionary when the employer is completely free to choose whether or not to award them. If so, they are not considered an integral part of the remuneration package.

    However, on 30 April 2009, the French Supreme Court ruled that:

    • discretionary bonuses must be justified on objective and appropriate grounds;

    • the employee must be informed of these grounds before entering into the employment contract.

    It is therefore debatable whether discretionary bonuses can still be granted.

  • Contractual bonuses. Under case law, if a bonus is provided for in the employment contract, it is a contractual element of the remuneration package and can only be modified with the employee's consent. If the bonus is contractual (Supreme Court, 2 July 2002, Saucier v Sté Fiduciaire Juridique et Fiscale de France (Fidal)):

    • its variation must be based on objective criteria, which are independent from the employer's wishes;

    • the employee must not share the employer's risk;

    • the employee's salary must not be less than either: the statutory minimum wage (see Question 9, Minimum wage); or the minimum salary set by a relevant collective bargaining agreement (CBA).

Some CBAs provide for bonuses, which are subject to the same rules as contractual bonuses.

Bonuses can also be paid as a result of company practice. If this practice is regular, fixed and applies to a set group of employees, the bonus forms part of the remuneration package that the employer must pay. An employer can end such a bonus by following a procedure set by case law, which involves:

  • Individually informing the employees.

  • Informing the staff representatives.

  • Observing a reasonable notice period (usually, at least three months).

 

Intellectual property (IP)

31. If employees create IP rights in the course of their employment, who owns the rights?

Patents

Inventions made within the scope of employment relationships are divided into three categories (Article L.611-7, Intellectual Property Code):

  • Employee inventions that automatically belong to the employer. These include inventions made:

    • in the course of employment consisting of an inventive assignment (when the employment contract requires studies and research that may result in an invention);

    • when carrying out research or studies, which have been expressly assigned to the employee.

    The employee is entitled to receive additional compensation for the invention (which can be included as part of the employee's salary).

  • Employee inventions that the employer can claim. The employer can assign to itself the ownership of all or some of the rights in an employee's invention that is made in any of the following cases:

    • during the performance of the employee's duties;

    • in relation to the company's business;

    • using specific company knowledge;

    • using technologies or specific means of the employer;

    • using data the employer has acquired.

    The employee is entitled to obtain a fair price based on the invention's industrial and commercial use. In the event of a dispute, the employment tribunal (conseil de prud' hommes) sets the fair price.

  • Employee inventions that the employer cannot claim. All other employee inventions are considered to be non-attributable inventions and the employer has no rights over them.

Copyright

The author of an intellectual work owns, with effect from the date of creation, its exclusive IP rights, which are enforceable against all persons (Article L.111-1, Intellectual Property Code).

Ownership of the copyright can be assigned to the employer by written agreement (for example, in the employment contract). Employees always retain the moral rights to their work. They are not entitled to any additional compensation for a transfer of copyright ownership.

Other IP rights

Specific provisions exist for IP rights in software, designs and models.

 

Restraint of trade

32. Is it possible to restrict an employee's activities during employment and after termination? If so, in what circumstances can this be done? Must an employer continue to pay the former employee while they are subject to post-employment restrictive covenants?

Restriction of activities

Employees are bound by a duty of loyalty towards their employer, which prevents them from engaging in any activity that could be against their employer's interest.

Employment contracts can also set out more specific non-compete provisions. During the course of employment, employees can be required to:

  • Devote all of their attention to the company's business.

  • Not take part in any other professional activity, whether compensated or not (except for part-time employees).

Post-employment restrictive covenants

Non-compete clauses after termination are valid if they are included in the employment contract (or in an amendment to it). In addition, the non-compete clause must satisfy all of the following criteria:

  • Be essential to protect the company's legitimate interests.

  • Apply over a specific period of time (two years is the limit generally upheld by the courts) and to a defined geographic area.

  • Take into account whether the employee's position is specialised (that is, the clause must not prevent employees from continuing to work in their professional field).

  • Impose a duty on the employer to pay the employee financial compensation (this is usually at least 30% of the employee's former salary throughout the period during which the clause applies).

Non-compete clauses that do not meet all four conditions are invalid.

Collective bargaining agreements can also provide for non-compete clauses.

 

Proposals for reform

33. Are there any proposals to reform employment law in your jurisdiction?

On 3 August 2016, the Finance Minister announced that the French Government intends to submit a bill to parliament to implement the collection of income tax at source (that is, by the employer).

 

Online resources

Légifrance

W www.legifrance.gouv.fr/Traductions/en-English

Description. French government entity responsible for publishing legal texts online. Provides access to laws and decrees published in the Journal officiel, important court rulings, collective labour agreements, standards issued by European institutions, and international treaties and agreements to which France is a party.

Service-Public.fr

W www.service-public.fr/langue/english/

Description. Website run by the government which provides a wide range of information for French and foreign nationals about entering and working in France, social security and links to other public services.

Impots.gouv.fr

W www.impots.gouv.fr

Description. Website run by the Finance ministry. Provides information about taxes to individuals and companies. Can be used to declare and pay different taxes (in French only).

Ameli.fr

W www.ameli.fr

Description. Website of the national health insurance. It can be used by employers and employees for declarations and reimbursements of expenses relating to illness and accidents (in French only).



Contributor profile

Joël Grangé

Flichy Grangé Avocats

T +33 1 56 62 30 00
F +33 1 56 62 30 01
E grange@flichy.com
W www.flichygrange.com

Professional qualifications. Paris Bar, 1987

Areas of practice. Employment law (mergers, restructuring, collective litigation, collective bargaining agreements).

Recent transactions

  • Advising a leading transportation group on creating a joint venture.
  • Advising a public entertainment company on labour aspects of a merger.
  • Advising a global tyre company on a major restructuring operation.
  • Advising a global industrial group on various restructuring operations.
  • Advising on various restructuring operations.
  • Advising a pharmaceutical group on national and international aspects of acquiring another group.
  • Litigation for a major petroleum company, expatriates of construction groups, a telecom company, an aircraft maintenance group and for a multinational IT corporation.
  • Litigation for a major transportation company in a discrimination claim brought by more than 1,000 foreign workers working for the company in France.

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