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28 March 2017

Employment law news of January 2017

Newsletter

  • IMPLEMENTING DECREES IN RELATION TO EL KHOMRI ACT

Several decrees implementing El Khomri Act have been published. These decrees concern notably working time, workers representative, collective bargaining and the occupational health.

♦ Working time

Decrees of November 18, 2016 No. 2016-1553, No. 2016-1554 and No. 2016-1556

In addition to implement the regulatory section of the French Labour Code in line with its new structure, these decrees clarify the following topics:

  • on-call duty: the employer who decides to unilaterally establish on-call duties has to provide each employee concerned with the individual planning of the periods related complying with the legal deadlines, “by any means proving the date”;
  • excess of the maximum legal weekly working time of 44-hours: when there is no collective agreement, the Labour administration (DIRECCTE) can approve such excess;
  • the implementation of working time on an annual basis: the documents in relation to the calculation of the working time must remain during the reference period.

♦ Works Council: passing the 300 employees threshold

Decree of October 25, 2016 No. 2016-1437

Companies which pass the 300 employees threshold, i.e. for 12 months, consecutive or not, in the last three years, have to:

  • hold Works Council meetings at least once a month;
  • consult once a year the Works Council on the company’s social policy and the social report (“bilan social”).

The implementation of the company agreements called “offensive company agreements for employment” (“accords offensifs pour l’emploi”)

Decree of December 28, 2016 n° 2016-1909

As a reminder, the provisions of the « company agreements for the preservation and the development of the employment» resulting from El Khomri Act replace the provisions of the employment contract in the same area, including working time and remuneration, even if there is no economic difficulties.

  • Regarding the company agreement: it can modify or remove the terms and conditions for granting, calculating and paying all or a part of the employee’s remuneration, provided that these changes do not reduce his monthly remuneration corresponding to the average of the remuneration received for three months prior the signing of the company agreement.
  • Regarding the procedure: the employer has to inform the employee concerned, individually, “by any means proving the date” that the employee is allowed to accept or to refuse the application of the company’s agreement and the related reflection period (1 month), being specified that no answer during this delay is deemed as an acceptance.
  •  If the employee accepts the company agreement: the terms of the company agreement replace those of the employment contract for 5 years at the mostIf he refuses the company agreement: the employee is convened to a preliminary meeting during which the employer provides him with a written document, against a receipt, informing the employee that he has 7 days to accept a personal accompanying process (« parcours d’accompagnement personnalisé” –PAP). No answer during this delay is considered as a refusal.
  • If the employee refuses the “PAP”: dismissal implemented under the rules governing less than 10 redundancies for 30 days.
  • If the employee accepts the “PAP”: termination of the employment contract the following day after the employee provides the employer with the acceptance form. The employer forwards this document to the Unemployment Fund in addition to the needed documents in order to assess if he is entitled to and the payment of the sums owed by the employer.

Company agreements approved by employee’s referendum

Decree of December 20, 2016 n° 2016-1797

The decree specifying the terms and conditions of the approval by employees of some of the company agreements was finally published after being awaited since Rebsamen Act.

Within companies where there is a union delegate, minority trade unions (i.e. obtained upper than 30% of the votes cast at the first round of the last elections) which have signed a company agreement with the employer, have one month as from the date of the signing to ask for the employees’ approval.

In such a case:

  • the terms and conditions of the consultation are determined by a protocol signed by the minority trade unions in relation to the mode to provide the employees with the company agreement, the place, date and time slot of the polls, the organization and the proceedings of the vote, the subject of the referendum, and the list of the employees concerned by the company agreement;
  • the employer provides the employees with the protocol by any means, at the latest 15 days before the vote;
  • the vote takes place within one month as from the signing of the protocol.

Within companies where there is no union delegate, a company agreement signed with the workers representatives or employees designated as such by a trade union, needs to be approved by employees by two months as from the signing of the company agreement. In such a case, the employer has to:

  • determine unilaterally the terms and conditions of the referendum after consulting the workers representatives or the employees designated by a trade union involved;
  • provide the employees with such terms and conditions by any means, 15 days before the vote at the latest.

In any event,

  • disputes in relation to the terms and conditions of the organization of the employees consultation determined by the protocol or unilaterally by the employee fall under the jurisdiction of the “Tribunal d’instance” which must be seized of the case within 8 days following the employees’ information;
  • the company agreement is validated if it is approved by the majority of the votes cast;
  • the result of the vote is entered in a minute which is published by the employer within the company, and becomes an appendix of the company agreement when it will be filed.

At this stage the referendum by employees is already applicable to the “offensive company agreements for employment” and company agreements in respect of working time, rests and paid leaves. It will be applicable to the other company agreements as from September 1st 2019, unless for those called “company agreements for remaining employment” (“accords de maintien de l’emploi”).

The implementing decrees in relation to the denunciation and the revision of the company agreements signed by workers representative or employees designated by a trade union, provided for by article l. 2232-29 of the French Labour code, are still awaited.

Claims in relation to the experts designated by the Health and Safety Committee

Decree of December 16, 2016 No. 2016-1761

The employer may contest:

  • resorting to an expert, bringing the case before “Tribunal de Grande Instance” within 15 days as from the Health and Safety Committee’s decision;
  • the financial cost resulting from bringing the case before the “Tribunal de Grande instance”, within 15 days as from the date the employer has been informed.

The preventive and informative visit

Decree of December 27, 2016 No. 2016-1908

The pre-recruitment medical examination, which was replaced by a preventive and informative visit for employees who do not carry out “risky functions”, must be organized within 3 months as from the hiring, except whether the employee has already been subject to such visit during the last 5 years prior to the hiring.

 

Unfitness: modifications in relation to the medical opinion

Decree of December 27, 2016 No. 2016-1908

Before pronouncing the unfitness of an employee for his job, the occupational physician must (i) conduct at least one medical examination, (ii) perform or order a study of the position, (iii), perform or order a study of the working conditions in the establishment in which this employee works and (iv) exchange with the employer by every means.

The employee concerned and the employer must be provided with the medical opinion of unfitness within 15 days as from the first medical, “by any means proving the date”. This time limit also applies in case of a complementary medical examination.

The dispute regarding the medical opinion of unfitness falls under the jurisdiction of the “Conseil de prud’hommes”, ruling in emergency interim proceedings. The complaint must be brought before the Court within 15 days as from the notification of the medical opinion or the contested measures. This deadline for contesting must be mentioned within the medical opinion of unfitness.

Although the decree provides for further information in respect of this new procedure, many questions remain concerning notably the defendant, the time limit during which the expert physician’s has to be designated, the dispute of the expert’s report, etc.

2. Indicative scale regarding the owed damages for unfair dismissal

Decree of November 23, 2016 No. 2016-1581

Article R.1235-22 of the French Labour Code presents an indicative scale providing for the damages which may be allowed awarded for unfair dismissal. The amount depends on the employee’s seniority and the applicable increases (employee dismissed is more than 50 years old or there are specifics difficulties to get another job).

This scale is indicative, in order to comply with the decision rendered by the French Constitutional Court August 5, 2015, invalidating the employee damages cap from the Macron’s Act.

3. Termination indemnities’ social charges

Act No. 2016-1827, December 23, 2016

Removed by the 2016 financial social security Act, the 2017 social security Act brings back the threshold beyond which the termination compensations are totally subjected to social charges as from the first euro. This threshold is equal to 10 times the social security ceiling (392.280€).

 

4. Amendment to part time employment contract: 7 days prior notice is not applicable

French Supreme Court, Employment Chamber, November 9, 2016 No. 15-19.401

A part-time employment contract of an employee became, temporarily, a full time employment contract, after signing several contract amendments.

Based on Article L3123-31 of the French Labour Code, the employee obtained the requalification of his part-time employment contract in a full-time employment contract. Indeed, the Court of appeal considered that the employer did not comply with the 7 days prior notice applicable in case of modification of the dividing up of the working time (between days of the week or weeks of the month).

The French Supreme Court quashed the Court of Appeal’s decision, starting from the premise that the 7 days prior notice is only applicable when the employer unilaterally modifies the employment contract, but not when the employee has given its consent.

5. Whistleblower: new legal regime

No 2016-1691, Act December 9, 2016 (« Loi Sapin 2 ») and No 2016-1690, Organic Act

A whistleblower is a physical person who informs of a crime, an offence or a serious and obvious violation of the Law, a regulation, an international commitment or a unilateral act of an international organization based on such commitment or the existence of a serious threat for public interest.

Description must be:

  • selfless and without intent to cause harm;
  • given on the employee’s hierarchy or to a referent designated by the employer as such, except in case of serious and impending or irreversible threat or when the authority did not react after a 3 months period;
  • deprived of any secret (national defense, medical secret, or attorney-client relationship).

From his part, the employer must:

  • implement intern appropriate procedures within firm over 50 employees, in order to ensure the anonymity of the author and the persons involved;
  • not take a disciplinary sanction against the description’s author.

These new whistleblower rules will come into force after the publication of an implementing decree.

6. Monitoring of the directors’ compensation

N° 2016-1691 Act, December 9, 2016 (« Loi Sapin 2 »)

The law provides for an approval system of directors’ remuneration of companies whose securities are admitted on a French or foreign regulated market. Are concerned:

  • chairmen (“president”);
  • managing director and deputy managing director (“directeur général et directeur général délégué de société anonyme à conseil d’administration”);
  • member of the Management Board (“membre du directoire”);
  • sole managing director (“directeur général unique de société à conseil de surveillance et directoire”);
  • member of the Supervisory Board (“membres du conseil de surveillance de société anonyme”).
  • Prior vote: as from the shareholders meeting 2017 for the fiscal year ended December 31, 2016, a resolution will be submitted to the shareholders at least every year during the ordinary general meeting, in order to approve principles and criteria on the basis of which the fixed, variable and exceptional components of the compensation package and any benefit whatever nature are determined, divided up and assigned to the directors.

The ordinary general meeting’s approval will be required for any change of these elements and in case of corporate functions’ renewal.

If the approval is refused, the remuneration will be determined « according to the remuneration paid for the previous financial year or, in the absence of previous remuneration, according to the company’s practices », being specified that this notion has not been defined yet.

In any case, the conditions in respect of the application of the approval procedure by prior vote shall be specified by implementing decree.

  • A posteriori vote: a posteriori monitoring procedure has been implemented and will enter into force for the company whose fiscal year ended December 31, 2016, as from the Annual General Meeting called to approve the financial statements held in 2018. The shareholders will have to deliberate on fixed, variable and exceptional components of compensation package and any benefit whatever nature paid to directors according to the prior vote.

The variable and exceptional components of directors’ compensation assigned during the past fiscal year, will be paid after the approval of the members of Annual General Meeting.

In case of negative vote, the directors will still benefit from the fixed components of their compensation remuneration but variable and exceptional components will not be paid.

7. Unfitness: moderation of the redeployment obligation

French Supreme Court, Employment Chamber, November 23, 2016 No. 14-26.398 and No. 15-18.092

In both cases, an employer provided an unfit employee with several redeployment offers in France. One of them refused such offers due to the geographical distance; the other one did not answer at all. In these circumstances, both employers considered it was unnecessary to extend the redeployment researches within the Group to which the companies belong to and regarded as impossible the redeployment. Therefore, the employees were dismissed.

Based on the French case law which forces the employer to extend the redeployment researches to the Group to which the company belongs to, the employees contest their dismissal, arguing that the employer should have provided them with redeployment offers abroad.

The French Supreme Court recognizes for the first time that the employer can take into account the employee’s whishes in order to adapt his proposals, especially concerning the geographic area. Nevertheless, in the second case, the employer presumed the employee’s wishes in the absence of any reaction.

8. New working hours refused by an employee: his dismissal is justified

French Supreme Court, Employment Chamber, December 14, 2016 No. 15-21.363

An employer notified to a full-time duty officer his new assignment on a second site and his new working schedules (latter work schedules, 9 pm instead of 5 pm, on weekdays and Saturday).

Arguing that the new working hours constitutes a “disruption of his working conditions”, the employee refused the new working schedules and request the judicial termination of his employment contract.

The French Supreme Court confirms the reject of the employee’s claim and the validity of the dismissal, considering that (i) the modification of the working schedules was allowed under the terms of the employment contract, (ii) the employee’s new working schedules complied with legal resting periods and (iii) this modification had not an excessive impact on the personal and family employee’s life.

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Anna-Christina CHAVES

Avocat Associée / Partner

ac.chaves@stehlin-legal.com