France: New rights to workers and greater flexibility to employers

After several months of negotiations between the French social partners, employers' associations and employee trade unions, a national inter-professional agreement on French employment was reached on 11 January 2013.  This agreement, approved by all employers' associations and 3 out of 5 of the employee trade unions, provides new rights to workers and greater flexibility to employers.

 However, whilst the agreement does create flexibility for employers in some areas, it is of course a compromise between the interests of the employees and employers and in particular the agreement does not deal with one of the key fundamental problems facing employers in France – the difficulty in demonstrating economic difficulties in order to be able to lawfully effect redundancies.

 The agreement includes measures aimed at securing careers, such as

• complementary health insurance for all workers
• the possibility for employees who return to work after a period of unemployment to accumulate unused and new unemployment rights in the event of a new period of inactivity
• higher permanent taxes on short (0 to 3 months) fixed-term employment contracts unless such contracts lead to indefinite employment contracts
• the establishment of a "personal training account" where employees will be able to earn up to 20 hours per year (capped at 120 hours) for training and that will be fully transferrable in case of a change of employer
• in companies with more than 300 employees, the establishment of a "voluntary mobility period" whereby employees with more than 2 years of seniority, with the agreement of their employer, will be able to try another job in another company while maintaining the possibility at the end of the mobility period to return to their former job
• the setting of a minimum of 24 hours per week for part-time employees, unless employees have expressly asked otherwise; and
• companies with more than 10 000 employees worldwide or 5 000 employees in France will be required to permit employee representatives to attend their board meetings and have the right to vote.

On the other hand, to give more flexibility to employers, the agreement provides

• in the event of serious economic difficulties, the possibility of negotiating with the company's unions representatives a "job preservation " agreement (limited to 2 years) which provides a lower salary and / or an increase to working time in exchange for a commitment to keep the workers' jobs during the period of the agreement (in case of refusal, employees could be dismissed for economic reasons without the right to bring any claims)
• the possibility of negotiating with the company's unions representatives an agreement containing terms and conditions for collective redundancy which, after the validation by the French Administration, will be imposed on employee
• in case of a reorganisation without redundancies, companies may use internal mobility after a "simplified" negotiation process and without having to initiate a social plan
• the simplification of partial unemployment with measures to encourage training during periods not worked.

 To be effective, the agreement needs to be transposed into law, for which a draft Bill will be presented to the Government on 6 March 2013.