Neomie Trisha P.

Sara
Social Studies
MSS 417

Basic Principles of Labor Law in France

It has been a dramatic year for French unions.  On September 22, 2017 President
Emmanuel Macron overhauled his country’s labor law by executive order. This was a major
milestone for the young politician who had pledged to turn France into a “nation that thinks and
moves like a startup.”

Macron has spent much of his political career fighting to liberalize his country’s labor law.
While serving as Minister of Economy, Industry and Digital Affairs for President Francois
Hollande, he supported a law that would have, among other pro-business reforms, reduced the
minimum overtime pay for employees who worked beyond the (otherwise mostly symbolic) 35
hour work week. He has repeatedly warned that France’s strong workplace protections make it
unattractive for investors. This argument resonates in a country suffering from chronically high
unemployment. France’s unemployment rate of 9.5% is roughly double that of the United
Kingdom or United States.

Notwithstanding France’s reputation for worker-friendly labor law, it has one of

the lowest union membership rates in the developed world. Only 8% of its workforce is
unionized, and this number drops to a mere 5% in the private sector. This is the lowest union
density in the European Union, and is even lower than in the United States. Because unions are
not able to rely on the power of mass membership, they are heavily dependent on the statutory
protections found in France’s extensive labor code, the Code du Travail. These protections are
far more generous than those found in the NLRA. French unions are not mere vehicles for
collective bargaining. They participate in almost every aspect of the employment relationship,
even in workplaces which are not themselves unionized.

The secret to this power lies in the structure of French labor law. In the United States,
unions negotiate with individual employers and create contracts that bind an individual firm. In
France, on the other hand, unions engage in sector-wide or industry-level bargaining.
Representatives of the five major unions sit down with the largest employers and create rules
that bind all businesses in that sector of the economy. Hundreds of these agreements are
negotiated or extended every year. This means that, despite the low rate of actual union
membership, the overwhelming majority (up to 98%) of French workers are covered by union-
negotiated collective bargaining agreements. In a very real way, French unions are the
representatives of all workers in the country, and not just of their members.

This is the relationship which Macron seeks to change. One of the central elements of
the new labor law allows small employers (defined as businesses with fewer than 50
employees) to negotiate changes in employment conditions without a union
representative present. This allows individual firms to negotiate for workplace rules which are
less worker-protective than the industry standard. This change is defended as a means to
improve flexibility, but it will also weaken workers’ bargaining position by allowing employers to
negotiate from a position of power.  It will also likely undermine the solidarity that those workers
currently feel with the national unions. Existing law makes it clear that their work conditions are
determined by the national labor movement. If conditions are instead set at the firm-level, this
solidarity could disappear.

Other elements of worker power are also endangered by Macron’s executive order.
Previously, French labor law required the creation of several representative institutions at the
workplace.  These included works councils and health and safety committees. Macron’s
executive order abolishes these institutions and replaces them with a “single common
representative body.” The effects of this change are hard to predict, but it will reduce the
number of paths open for submitting an employee grievance.

Macron’s executive order targets employment law as well as labor law. Unlike the United
States, French employment law presumes that an employee can only be fired for cause.  The
definition of good cause is fairly broad, however, and employers have always been able to lay
off workers if it was a business necessity.  Macron’s reforms expand the definition of business
necessity and limit the fines that an employer faces for an unjust discharge. For instance, an
employer who wrongfully fires an employee who has worked for two years will now be liable for
no more than three months lost wages. The order also reduces the time in which employees
can bring a wrongful termination suit from 24 months to 12 months.

While Macron’s collective bargaining reforms target small enterprises, some of these
employment law changes benefit only the largest corporations. Business necessity, for instance,
was historically determined on a global basis. A company could not claim that its business
needs required it to lay off workers in France while opening up new factories in another country. 
Macron’s reform only requires that the business face problems in France. This change grants
increased flexibility to multinational corporations while offering nothing new to small domestic
businesses.  While Macron justified his reforms by citing high unemployment, this seems to
have encouraged increased firing rather than increased hiring. Companies like Peugeot
have laid off thousands of workers despite increased profits, something which would have been
illegal under the pre-Macron laws.

The unions’ response to these changes was fairly muted at first. The most radicalFrench
union, the CGT, called for massive protests against the law, but none of the other four major
unions were willing to join them.  This weak response may have been rooted in the fact that
Macron had campaigned heavily on liberalizing the labor market. The reforms could therefore
be presented as reflecting an electoral mandate. Some union leaders believed that resisting
them would be a waste of political capital.  France’s largest union, the CFDT, seemed
to worry that strongly opposing the reforms would weaken its relationship with the administration
and reduce its leverage in future negotiations.

This reluctance collapsed when the administration began liberalizing sectors which had

gone unmentioned during the campaign. France’s public railway system, the National Society of
French Railroads (SNCF), had played no role in the 2017 election.  It is also a powerful center
of entrenched labor power. SNCF employs 140,000 workers with a special employment status
(the Statut des Cheminots) which gives them significantly better working conditions than many
other employees. They cannot be fired for business necessity reasons and are able to retire in
their mid-50s (although their salaries remain close to the national average). In March of this
year, Macron’s prime minister Edouard Philippe unveiled a plan to convert the SNCF into a
public limited corporation, rescind the Statut, and close unprofitable railway lines. The response
was dramatic, with large numbers of railway workers walking off the job.

This signaled the beginning of a vast new wave of strikes which is still ongoing. A civil
servant strike began on March 22, while student protests broke out at universities across the
country. Major strikes also broke out at Air France and in the country’s energy sector.  Job cuts
at the supermarket Carrefour, Europe’s largest retail employer, had already brought workers out
on strike in February, but their cause now merged into the larger national protests.  This all
represents France’s largest strike wave in years, and demonstrates the continued power of
France’s labor movement. This labor radicalism may also have received a boost from a well-
timed historical anniversary. It is currently the fiftieth anniversary of the May 1968 protests that
helped bring down Charles de Gaulle.  Macron has been notably hesitant to
commemorate that anniversary.

ABOUT ONLABOR

OnLabor is a blog devoted to workers, unions, and their politics. We interpret our subject
broadly to include the current crisis in the traditional union movement (why union decline is hap-
pening and what it means for our society); the new and contested forms of worker organization
that are filling the labor union gap; how work ought to be structured and managed; how workers
ought to be represented and compensated; and the appropriate role of government – all three
branches – in each of these issues.

France: Employment Law In France: The Basics

Western Europe, with a population of approximately 64 million people, and which
borders eight different countries plays an integral role in Europe and the worldwide market.  
Given its central geographic location, highly developed infrastructure and qualified workforce,
many companies around the world have chosen to do business in France. However, it is
imperative that companies who are already doing business in France and companies who are
considering doing business in France be aware of the country's strict employment and labor
laws as they apply to employment contracts, wage and hour, terminations and anti-harassment
and discrimination laws. The purpose of this article is to provide a brief overview of some of the
basic principles of employment law in France and to inform employers of recent developments
in potential labor reform.
Sources of Employment Law in France

 The primary sources of employment law in France are the French Constitution, the
French codified collection of employment law provisions knows as the "Code du Travail",
Collective Bargaining Agreements known as "Conventions Collectives de Travail" and work
regulations known as "Reglèment Interieur" applicable to discipline and health and safety
standards.

Employment Contracts

In France, there are two types of employment contracts. An employee can be employed
pursuant to an open-term contract ("contrat à durée indéterminée") or pursuant to a fixed-term
contract ("contrat a durée déterminée"). Employment contracts should be in writing although not
required unless the contract is for a fixed term or if a Collective Bargaining Agreement requires
that it be in writing. An open-term contract, as the title suggests, is for an indefinite period of
time.

Any written employment contract should contain the following specific information regarding the
particular employment:

 The identity of the employee and employer;

 The employee's duties and responsibilities;
 Duration of the contract;
 The place of work;
 The amount of compensation;
 Whether there is a specific probationary period at the commencement of the
employment;
 Any applicable notice periods relevant to the employment;
 Amounts of paid leave available; and
 Regular working hours.

Pursuant to article L. 1221-3 of the Code du Travail, the employment contract must be in
French although translations of the contract in alternative languages may be provided to the
employee along with the French version.

Collective Bargaining Agreements

Collective Bargaining Agreements are sometimes applicable nationally and others at a

localized level and typically relate to a particular sector of the industry or commerce. Collective
Bargaining Agreements are binding upon employers even if that employer was neither a part of
the collective bargaining negotiations nor a member of any employer representative group who
participated in the collective bargaining negotiations. Thus, it is important for an employer in
France to regularly verify the provisions of an applicable Collective Bargaining Agreement so
that the employer is consistently aware of any changes and/or updates that have been made.
This is especially important to ensure that an employee is being compensated in accordance
with the minimum compensation required by the particular agreement.
Working Hours and Overtime Requirements

Regular working hours in France are 35 hours a week. Any hours worked in excess of
35 hours will be considered compensable overtime. The first eight hours of overtime are paid at
a rate of 25 percent higher than the employee's regular rate of pay. Any overtime hours worked
in excess of eight are compensated at a rate of 50 percent more than the employee's regular
rate of pay. The 35-hour work week does not apply to certain executives which are exempt from
overtime requirements.

Terminations

In France, like most European countries, there is no employment "at will" meaning that an
employer can not terminate an employee unless it is for a reason recognized by the Code du
Travail. Legal reasons for terminating an employment contract include the following:

 The expiration of the contract term, if applicable;

 Resignation by the employee if the resignation is a clear decision on behalf of the
employee which should be confirmed in writing by the employer;
 Termination by mutual agreement which must be set forth in a formal written agreement
and signed by both the employee and employer;
 Death of the employee;
 Retirement by the employee;

Dismissal on personal grounds for misconduct by the employee if the employer follows the
legal procedures and notice requirements applicable to the particular employee. Notice
requirements will vary depending upon the level of misconduct of the employee and are set forth
both in Code du Travail and relevant case law;

A Redundancy, which is the termination of an employee for economic grounds, typically

when a particular job function is eliminated. The procedure for implementing a redundancy is
very specific and set forth in detail in the Code du Travail.

Sexual Harassment Law

In May of 2012, the French Constitutional Council repealed the sexual harassment law in
effect at the time, Section 222-33 of France's Penal Code, which defined sexual harassment as
the "act of harassing others to gain sexual favors". Under the former law, violations carried a jail
sentence of one year and a fine equivalent to $18,500. The Council determined that the
definition of sexual harassment set forth in the law was far too vague and did not offer enough
protection to potential victims because it did not appropriately address all forms of sexual
harassment. After its repeal and to the outrage of many throughout the country, France was
without a sexual harassment law for almost three months. The timing of the repeal also gained
international attention because it came within a year after then International Monetary Fund
Chief, Dominique Strauss-Kahn, a French citizen, was charged with sexually assaulting a maid
in New York City. The charges, although ultimately dropped, lead to his resignation and put the
issue of sexual harassment into the spotlight.
 Finally, in July of 2012, the French Parliament passed much tougher and broader sexual
harassment legislation. The new law now defines harassment as "imposing on someone, in a
repeated way, words or actions that have a sexual connotation and either affecting the person's
dignity because of their degrading or humiliating nature or putting him or her in an intimidating,
hostile or offensive situation."  The law extends to the workplace and provides for a possible
two-year jail sentence and a fine of up to 30,000 euros for violations. The most serious offenses,
such as harassing a disabled individual, are punishable by a jail sentence of up to three years.

Anti-discrimination Law

France, like the United States, also has strict laws prohibiting discrimination in the
workplace.  The Code du Travail prohibits discrimination based upon an individual's sex,
lifestyle, sexual orientation, age, family situation, non-membership, whether genuine or
assumed, of an ethnic group, nation or race, political beliefs, trade union activities, religious
beliefs, physical appearance, surname, state of health or disability.  Moreover, the definition of
discriminatory practices provided by the Code du Travail applies to recruitment, access to
placement or in-company training programs, pay, job classifications, promotions, transfers from
one workplace to another, terminations and renewal of employment contracts.  Notably,
employers can be held both civilly and criminally liable for violations of the antidiscrimination
laws.

Reference

https://onlabor.org/what-is-happening-to-french-labor-law