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04 October 2017

Macron seeks to transform labour laws to tackle mass unemployment

President Macron has passed a landmark set of Employment Law reforms, the most eagerly anticipated legislation post-election, with immediate effect. Its objective: to streamline French Employment Law by granting more flexibility to companies, whilst securing equal opportunities for individuals. This is in an attempt to turn over a new leaf following decades of mass unemployment.

In a nutshell

  • Employers will now have more flexibility to negotiate employment terms and conditions with their workers while reducing the costs of firing staff
  • The conditions for economic dismissals have now been relaxed (assessment of the economic difficulties on the French territory only)
  • Damages awarded by French Courts in case of unfair dismissal have been capped

A focus on employment in small businesses and on flexibility to adapt the employment market

The five decrees focus on several goals, looking to make employment easier for small businesses and increase flexibility to adapt to and anticipate the employment market.

  1. Small companies that have no union or staff representatives in place are now able to negotiate collective agreements at company level (subject that 2/3 of the workforce vote in favour of such collective agreement);
  2. The amount of damages for unfair dismissal are now capped according to an imperative scale that depends on the employee’s seniority and on the company’s size and which is more favourable for small businesses.
  3. The value of company’s agreements has now been reinforced. Company agreements will, for the first time, be able to override certain Branch agreements,  most notably concerning wages and benefits or working time;
  4. Every company will be able to adopt collective agreements even in the absence of a trade Union signature through referendum votes;
  5. Staff representative bodies will be merged into one single body:  The Staff Delegates (“Délégués du Personnel”), the Work Council (“Comité d’Entreprise”) and the Health and Safety Committee (“Comité d’hygiène, de sécurité et des conditions de travail”) will be united into one staff representative body named the Economic and Social Council, which consultation powers are now far more limited in time (set timelines for their opinion to be given);
  6. The conditions for economic redundancy have now been relaxed. The extent of a companies’ economic difficulties will only be assessed at local level (and not as an overall situation of the group internationally) ;
  7. Companies are allowed to organise collective voluntary departure plans through the signature of a company’s agreement ratified by the labour administration‎;
  8. Procedural errors in the course of the dismissal procedures will no longer result in an unfair dismissal;
  9. Home working is now encouraged. The conditions for home working will be set by a company’s agreement or through the employer’s unilateral decision after the Economic and Social Council has been consulted.

If you have any concerns or questions about the reforms and what impact they will have on your business, please contact Kim Campion, Head of Employment in our Paris office.