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: 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; pensions; 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 PLC multi-jurisdictional guide to employment and employee benefits law. For a full list of jurisdictional Q&As visit www.practicallaw.com/employment-mjg.
Foreign nationals working in your jurisdiction?
Nationals of your jurisdiction working abroad?
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:
Individual and collective employment rights, including the right to strike.
The minimum wage (see Question 7, Minimum wage).
Illegal work.
Working hours (see Question 8, Working hours).
Paid holiday (see Question 9, Minimum holiday entitlement).
Discrimination (see Question 15, Protection from discrimination).
Working conditions.
Health and safety (see Question 23, Health and safety obligations).
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.
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).
Limited liability companies. There are no legal restrictions on age. However, the memorandum and articles of association can impose an age restriction.
There are no nationality restrictions on managers and company directors, though foreign company directors must hold a residence permit in France.
The state provides various grants and incentives (such as financial aid, and exemptions and reductions in social security contributions). They are mainly aimed at encouraging employers to recruit individuals under a certain age (usually 26 years). This is so that they can acquire specific skills in return for a lower salary.
A declaration (Déclaration préalable à l' embauche) must be made by the employer to the French administration prior to hiring. The declaration should 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.
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.
Finally, 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.
Cost. The application must be made locally at the préfecture (which represents the government at local level) and costs up to EUR349, unless the applicant is otherwise exempted (as at 1 August 2012, US$1 was about EUR0.8).
Time frame. Obtaining a permanent or temporary residence card is a lengthy process, which can take up to about six months.
EU citizens, except for citizens of Bulgaria and Romania, 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)).
Bulgarian and Romanian nationals are subject to a transitional period until 2014 and require work and residence permits. However, they benefit from preferential treatment and can use a simplified work authorisation procedure to work in certain professions where recruitment is difficult.
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, formerly known as the French National Foreigners and Migrations Agency (L'Office français de l'immigration et de l'intégration, formerly Agence nationale d' accueil des étrangers et des migrations). The amount depends on the employee's salary:
For an indefinite-term employment contract, the employer must pay 50% of the employee's monthly salary, capped at two and a half times the minimum wage (see Question 7, Minimum wage) (amounting to EUR3,564).
For a fixed-term contract (between three and 12 months):
if the employee's monthly salary is EUR1,425.67 or less, the employer must pay EUR74;
if the employee's monthly salary is between EUR1,425.67 and EUR2,138.50, the employer must pay EUR210;
if the employee's monthly salary is more than EUR2,138.50, 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 50% of the employee's monthly salary, capped at two and a half times the minimum wage.
The employee must pay the cost of the stamp duty necessary to create or renew the residence permit (the price varies between EUR30 and EUR349, unless the employee is exempted under certain circumstances).
Time frame. Obtaining permits is a lengthy process, which can take up to about six months.
Failure to comply with immigration procedures is a criminal offence for the employer and employee.
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 may refuse to grant the work permit (R.5221-20 and seq, Labour Code).
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 should 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.
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.
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.
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 they 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 such a 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 (or fails to answer after the one-month period to consider 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.
As of 1 July 2012, the minimum gross monthly wage is EUR1,425.67 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.
CBAs also frequently provide for minimum wages (depending on job categories).
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 CBAs or collective agreements).
However, employers can agree a longer work 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), which came into force on 20 August 2008, provides 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 (Working Time Law):
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.
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).
On 21 August 2007, a law for the promotion of labour, employment and purchasing power (Loi en faveur du travail, de l' emploi et du pouvoir d' achat) was passed. This law introduced a tax exemption regime for employees for overtime and an exemption regime for both the employer and employee regarding the social security contributions they make on overtime. However, most of these exemptions have been reduced or withdrawn since by the French Parliament. The French Parliament is currently examining a Bill which intends to entirely suppress this exemption regime.
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 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, French Labour Code).
In addition, many CBAs provide a minimum rest break for each shift.
Employees are entitled to a minimum of five weeks' paid holiday a year, in addition to public holidays.
The law and CBAs 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 8, Working hours).
France has the following public holidays:
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).
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.
Section 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, CBAs 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.
Employees who are absent due to illness or injury receive daily indemnities from the social security system (for a maximum of three years).
Parents (including maternity, paternity, surrogacy, adoption and parental rights, where applicable)?
Carers (including those of disabled children and adult dependants)?
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 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, apart from in the case of serious misconduct or cases where it is impossible to maintain the contract, employees cannot be dismissed during:
Pregnancy.
Maternity leave after childbirth.
The four 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).
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.
They 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 is prohibited in France, and so there are no specific provisions covering this.
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 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).
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.
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).
Depending on the applicable CBA and company collective agreements, benefits linked to service mainly include rights to:
Certain leaves of absence (for example, parental leave (see Question 11,Parental rights)).
Increased protection on dismissal (see Question 18, Protection against dismissal).
Maintain salary during illness or maternity leave (see Questions 10 and 11).
Participate in the election of employee representatives and be a candidate.
Benefit from profit-sharing plans.
Seniority measures.
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 26, Automatic transfer of employees).
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.
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 workers assignment. A breach of these provisions may be punished by a fine up to EUR3,750.
In general, if the employer fails to respect 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. Furthermore, 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).
Independent contractors. For independent contractors, if a court finds that the contractor actually works as a subordinate to the company he is contracted to work with, the contractor may be deemed a permanent employee with an indefinite-term employment contract, with a condemnation for undeclared work and possibly illegal loan of workforce.
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 38-43). 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 below, Other 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 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.
Specific provisions aim to protect employees' data in the context of medical records, computerised employment records and recruitment.
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 and -2, 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 (CEO), 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 as from the date of its revelation (Article L.1134-5, Labour Code).
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 one year's imprisonment and a maximum fine of EUR15,000 (Article L.1155-2, Labour Code).
Any disadvantageous measure taken (such as a dismissal) resulting from discrimination, or an act of sexual or psychological harassment (or the reporting of such acts), is void. The employee must be reinstated or receive compensatory damages. Additionally, the employer is liable for its employees' mental health and must take measures to ensure that they work in a safe environment.
Since sexual and moral harassment are misdemeanours, the prosecution limitation period is three complete years.
On 31 July 2012, the parliament voted on a law toughening sanctions against persons guilty of harassment. This law, which has not yet come into force, has introduced into the Labour Code a new offence of discrimination following harassment.
This law also imposes new 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.
CNIL Regulation 2005-3005 on whistleblowing has set 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 (including dismissal) cannot be based on real and serious grounds, allowing the employee to claim damages for the loss sustained.
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 serious or 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 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 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, as long as 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 18,Protection against 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 18, Protection against dismissal).
Once an employer believes that there is a valid ground for dismissal (except for redundancies, which are dealt with at Question 19), 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 and following, 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, if appropriate, 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 see if employees can 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 collect 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 which 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 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.
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 and seq, Labour Code). Article L. 1221-21 of the French 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 two main economic grounds for dismissal:
economic difficulties facing the relevant business sector at group level;
technological changes.
Case law allows a third economic ground for dismissal: where it is necessary to safeguard the competitiveness of the relevant business sector at group level.
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:
Discriminatory dismissals (see Question 15, Protection from discrimination).
Dismissal of employee representatives without the Labour Administration's prior authorisation (see below, Protected employees).
Insufficient redundancy plan (see Question 19, Redundancy/layoff).
Dismissals implemented in violation of Article L.1224-1 of the Labour Code (see Question 22, Consequences of a business transfer).
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.
A redundancy is a dismissal for economic grounds, which the Labour Code defines as either:
Economic difficulties facing the relevant business sector at group level.
Technological changes.
Case law allows a third economic ground for dismissal: where it is necessary to safeguard the competitiveness of the relevant business sector at group level.
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, Procedural requirements: Collective redundancies.
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 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 and following, 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.
Collective redundancies. The employer must complete this procedure before reaching a final decision on the contemplated redundancies (Articles L.1333-21 and following, 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 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 is entitled to 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.
The employer can inform employees of their redundancy in writing only after notifying the employment authorities of the contemplated redundancies, within specific legal deadlines (which vary depending on the number of proposed redundancies).
The employment authorities review the collective redundancy plan and ensure that it has been properly drafted in accordance with the law and that the collective redundancy procedure has been followed.
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 fails, the employer must inform the administration of the notified redundancies.
In addition to the plan's benefits (see above), employees who are made redundant are entitled to:
Severance pay (see Question 17, Severance payments).
Pay in lieu of notice (see Question 17, Notice periods).
Pay in lieu of holiday.
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.
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. 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.2323-19, Labour Code). In addition, the works council must be allowed to express its opinion and comment on the proposed operation. 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.2323-20, Labour Code).
Employees are consulted through their elected representatives, not directly, on major transactions (see above, Consultation).
If the chief executive, or a representative, breaches the consultation provisions, a criminal offence is committed, punishable by one or both of:
One year's imprisonment (two years for repeated offences).
A maximum fine of EUR3,750 (EUR7,500 for repeated offences).
The company is also liable to pay a fine of EUR18,750.
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.
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.
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). 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 17, Dismissal of employees).
Employees' collective employment rights are not maintained, since collective agreements are not transferred to the transferee. However, for a limited period of time (usually 15 months), transferred employees continue to benefit from rights arising from collective agreements that were in force with their previous employer immediately before the transfer. They also benefit from the existing collective agreements already applicable to their new employer.
During this period, the new employer must try to negotiate a new collective agreement that defines the transferred employees' collective rights. If an agreement is not reached, the transferred employees continue to benefit from their individual acquired rights (avantages individuels acquis).
Employment contracts are automatically transferred where the Employee Transfer Rules apply, without any modification whatsoever. The terms and conditions of the transferred employees should therefore not be modified after the transfer.
The courts do 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 (Employment Section of the Supreme Court, 9 March 2004, No. 02-42.140), or when the proposed modification actually meant that the employee was downgraded (Employment Section of the Supreme Court, 14 January 2004, No. 01-45.126).
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?
An employer can generally be held:
Civilly liable for its employees' acts.
Criminally liable for breaches of employment law that its representatives commit.
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, courts tend to hold the foreign parent company liable for payment of severance indemnities.
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 instance, 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).
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 should 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 is also bound to 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 is to be transmitted to the occupational doctor.
Additionally, non-compliance with Labour Code requirements regarding health and safety are punishable by a fine of EUR3,750.
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 such gross negligence, the employee receives a higher indemnity through the social security system, which is compensated by the employer with higher contributions.
Foreign nationals working in your jurisdiction?
Nationals of your jurisdiction working abroad?
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 EUR14,157) for income earned in 2011.
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).
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.
French employment income is taxed according to a progressive tax rate. The rates on income earned in 2011 are:
0% for income under EUR5,963.
5.5% for income from EUR5,963 to EUR11,896.
14% for income from EUR11,896 to EUR26,420.
30% for income from EUR26,420 to EUR70,830.
41% for income over EUR70,830.
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 (EUR12,128 or EUR24,256 per month for 2012).
The employer is liable to pay social security contributions and must withhold the employee's share from the gross monthly salary.
The old-age pension fund for salaried employees guarantees insured employees a retirement pension. It is administered by both the:
French national old-age pension fund for salaried employees (Caisse nationale d' assurance vieillesse des travailleurs salariés).
Regional health insurance funds.
Both employers and employees must make general social security contributions, calculated on the basis of the employee's salary and any related sums. Insured employees, who have paid contributions for at least one quarter, can generally request pension benefits above a certain age.
The Pension Reform Act of 9 November 2010 provides that the retirement age will gradually be raised from 60 to 62, depending on the date of birth. The Pension Reform Act also provides that the age above which the employee is entitled to a full-rate pension (notwithstanding the length of work) will be gradually raised from 65 to 67. Subsequently, provisions regarding retirement (whether at the employee's or at the employer's initiative) have been amended accordingly.
Employees who face particularly difficult conditions during their career or who have worked since they were very young may, however, be entitled to pension benefit at a younger age under the Pension Reform Act.
By Ministerial order dated 2 July 2012, the government lowered the national retirement age for employees who have started working at a young age (that is, before reaching 19 years of age) and who have paid a specified number of quarterly pension contributions depending on their date of birth. This scheme will apply to employees retiring from 1 November 2012.
For the purpose of assessment of the number of quarterly contributions necessary to receive a full pension, the Ministerial order introduced the possibility for any worker to benefit from up to two additional quarterly pension contributions in case of unemployment or maternity during his/her career. Periods of unemployment and maternity were already taken into account to a certain extent for the calculation of the number of quarterly pension contributions required by the law.
In addition, all employees covered by the general social security scheme must be affiliated to a complementary pension plan (Article L.921-1, Social Security Code). There are two complementary schemes:
The ARRCO scheme (Association pour le régime de retraite complémentaire des salariés). This was created through a collective agreement dated 8 December 1961. It applies to non-executive employees, and those of similar status, for the portion of their remuneration that does not exceed three times the social security ceiling (EUR109,116 for 2012).
The AGIRC scheme (Association générale des institutions de retraites des cadres). This was created through a collective agreement dated 14 March 1947. It applies to executives and employees of a similar status for the portion of their remuneration that ranges between the social security ceiling (EUR36,372 for 2012) and eight times the social security ceiling (EUR290,976 for 2012).
Under these complementary schemes, annual contributions collected from employees and employers are immediately redistributed to current pensioners, rather than invested. Both the employer and the employee must contribute to the schemes.
Both complementary schemes have been amended to reflect the changes resulting from the Pension Reform Act of 9 November 2010.
The employer can improve the benefits available to employees by making contributions to an additional optional retirement scheme with an insurance company (see Question 28).
The employees' contributions to the pension funds are exempt from income tax. The employer's contributions are exempt from corporation tax if they are considered to be liabilities, rather than benefits, for the employer. Both the employer and the employee are exempt from social security contributions for amounts within specific limits of the social security ceiling.
The old-age pension fund provides a pension of half of an employee's average salary, with a cap of half of the monthly social security ceiling (EUR1,515 for 2012).
Is linked to the employee's salary?
Is linked to employer and/or employee contributions and investment return on those contributions?
The basic state pension scheme is supplemented by compulsory complementary pension schemes (see Question 27).
Employers can supplement these compulsory schemes by contributing to optional company pension schemes for all or for certain categories of employees. These are not currently widespread.
Optional pension schemes are either defined contribution pension schemes (the employer commits to pay each month a defined contribution to a pension scheme) or defined benefit pension schemes (the employer undertakes that the employee, following retirement, shall earn a defined amount of their former wage).
See above, Linked to the employee's salary.
There is no regulatory body that oversees the operation of supplementary pension schemes. The Social Security Code contains all the applicable provisions regarding supplementary pension schemes.
Supplementary pension schemes are frequently managed externally by insurance companies or mutual insurance companies, which are themselves controlled by specific regulatory bodies.
Supplementary pension schemes are defined at the group or company level, based on an insurance contract with an external welfare institution. Defined benefit pension schemes created before 31 December 2009 can also be managed internally.
The Pension Reform Act of 21 August 2003 completely overhauled the system concerning employers' contributions to retirement funding and complementary life and disability insurance.
In relation to optional company pension schemes, a fraction of the employer's pension contributions is excluded from the tax base of social security contributions for each insured employee, on various conditions, and notably the scheme is applicable to all employees (or to an objectively defined category of employees) and that it is compulsory (employees cannot refuse it).
This fraction cannot exceed the higher of:
5% of the annual social security ceiling (EUR1,818.6 for 2012).
5% of the relevant employee's remuneration subject to social security contributions, up to five times the social security ceiling (EUR9,164 for 2012), after deduction of the employer's contributions to the ARRCO and AGIRC complementary pension schemes (see Question 27, Contributions paid to the government).
However, these tax reliefs do not apply to optional defined benefits schemes for senior executives, which are subject to specific contributions, depending on the scheme.
There are no tax reliefs available on employee contributions.
In relation to the basic state pension scheme, the employees' pension rights are not affected by a business transfer.
In relation to compulsory complementary schemes (AGIRC and ARRCO), a business transfer may imply that another fund is competent after the transfer (depending notably on the recipient company's activity). However, the operation generally has no impact on the employees' pension rights (though the employees' contributions may be amended).
In relation to supplementary pension schemes, no business transfer can cause the employee to lose his pension rights (either already acquired or currently being acquired) (Article L.913-2, Social Security Code).
There are no other forms of protection for pension rights.
Employees who are working abroad?
Employees of a foreign subsidiary company?
Employees who are working abroad can participate in optional company pension schemes if the scope of the scheme includes them. In principle, there can be no tax relief for these employees except if the employee is still subject to French social security contribution law (in the case of secondment).
Employees of a French company's foreign subsidiary usually cannot contribute to a French company's pension scheme.
In relation to the basic state pension scheme or compulsory complementary schemes (AGIRC and ARRCO), the employees' pension rights are not affected by their employer's insolvency, as they are externally run.
As regards supplementary pension schemes, insurance contracts must provide for a surrender clause in the case of insolvency (Article L.132-23, § 2-5, Insurance Code; Article L.932-23, § 1, Social Security Code; Article L.223-22, § 2-5, Welfare Code).
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 (Employment Section of the 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 7, Minimum wage);
minimum salary set by a relevant 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).
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.
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.
Specific provisions exist for IP rights in software, and designs and models.
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).
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 and are considered to systematically cause prejudice to the employee, even when not enforced, meaning in practice that the employee would be entitled to claim damages.
CBAs can also provide for non-compete clauses in restraint on trade.
Unjustified redundancies. A Bill for the prohibition of redundancies that would only be implemented to increase the shareholders' dividend has been introduced before the Parliament on 24 July 2012. The purpose of the Bill is to prevent unjustified redundancies when companies are in a good economic health. Under this Bill, redundancies in companies where a dividend was paid to its shareholders in the previous accounting year would be deemed without cause. The Bill also provides that companies responsible for such redundancies and which are receiving state aid will be compelled to reimburse the aid that they have received.
The Big Social Conference. The government held a social conference on 9 and 10 July 2012 in order to establish a plan for the next important social reforms, to which the employers' and employees' union national level representatives were invited.
Among the subjects the government wants to deal with in the coming years are:
The creation of a "generation contract" under which a company hiring a young worker while keeping an old worker to train him to do his job would be exempt from certain social security contributions for one or both of the employees, or would receive some state aid.
The creation of an "individual training account".
Reform aimed at preventing the excessive remuneration of certain executives.
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.
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.
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).
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).
T +33 1 56 62 30 00
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E grange@flichy.com
W www.flichy.com
Qualified. Paris Bar, 1987
Areas of practice. Employment law (mergers, restructuring, collective litigation, collective bargaining agreements).
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