France: Minimum time periods for information and consultation of French works councils – longer potential periods, but more certainty?

On 27 December 2013 the French Government finally published the Decree setting out the minimum time limits for information and consultation with works councils in France in the absence of a collective agreement providing for a shorter period of consultation.  These time limits apply, for example, to consultation which is required on share sales of French entities (where the French entity is a buyer, seller or target) and in relation to all transfers of businesses by way of asset transfers in France.

The minimum time periods are as follows:

• 1 month;
• 2 months  if the works council appoints an expert;
• 3 months if one or more health and safety committees also have to be consulted ;
• 4 months if a coordination body for health and safety committees in place.

The advantage of such minimum time periods is that at the end of the period, provided all necessary information has been provided to the works council*, a negative opinion will be deemed to have been given by the works council – i.e. the parties can enter into the sale agreement.  This means that the works council potentially has less nuisance power to hold up a transaction for many months by delaying giving an opinion.

This is the first time that French legislation has imposed the concept of a deemed opinion after a fixed period of time and should hopefully give more certainty to employers in terms of the timetable for transactions.

 The downside is that, unless employers are able to negotiate a collective agreement providing for a shorter period of consultation (which may be difficult, in particular in the case of transactions which are not necessarily seen to be in the interests of the employees), the minimum time periods referred to above will apply.  It will also mean that it is all the more important to determine whether or not there is a strict legal obligation to inform and consult with health and safety committees (as this will lengthen the period required for consultation).

A failure to comply with the above time limits is a criminal offence and could give rise to the risk of injunctive action by the works council to hold-up completion of a transaction until information and consultation has been correctly undertaken.

* In the event that the works council can argue that it has not been provided with all necessary information within such period, it may apply to the French Courts for an order that the period should be extended pending provision of all necessary information.

Article written by Emma Röhsler, Of Counsel.