International Labor and Employment Law

Guide to Whistleblowing – France Chapter

In this new age of accountability, organizations around the globe are having to navigate a patchwork of new laws designed to protect those who expose corporate misconduct. IEL’s Guide to Whistleblowing examines what constitutes a protective disclosure, the scope of regulations across 18 countries, and the steps businesses must take to ensure compliance with them.

Learn more about the response taken in specific countries or build your own report to compare approaches taken around the world: Guide to Whistleblowing – France Chapter

The Long-Awaited Decisions of the Social Chamber on the Macron Scale Have Just Been Rendered

The Social Chamber of the Court of Cassation today issued two long-awaited decisions on the compensation scale currently applicable in the event of dismissal without real and serious cause.

The so-called “Macron Scale” is the result of an ordinance of 22 September 2017 (No. 2017-1387) and appears in Article L. 1235-3 of the Labour Code. It holds that, in the event of dismissal deemed to be without real and serious cause, a judge may propose the reinstatement of the employee in the company. If either party refuses this reinstatement, the judge then awards the employee an indemnity payable by the employer, the amount of which is between minimum and maximum amounts.

These amounts are expressed in months of gross salary and depend on the number of employees in the company and the seniority (in full years) of the employee. The scale is progressive and the maximum amount is capped at 20 months for employees with  at least 29 years of service.

According to the French government, the introduction of the scale aims to increase predictability and secure the employment relationship or the effects of its termination for employers and their employees. Other European states, notably Belgium, Denmark, Finland, Germany, Switzerland, and Spain, have set up similar scales.

France’s scale (and mainly the compensation ceiling) gave rise to lively debates that focused on the question of its enforceability, on the grounds that it would disregard international rules of treaty law, mainly:

  • Article 10 of ILO Convention No. 158, ratified by the France in 1989, which provides that national courts must “be empowered to order the payment of adequate compensation or any other form of compensation considered appropriate”; and
  • Article 24 of the European Social Charter, which requires national law to provide for “the right of workers dismissed without just cause to adequate compensation or other appropriate redress”.

The argument can be summarized thusly: given the compensation ceilings to which the judge is bound, the scale would not allow adequate compensation to the employee dismissed without valid reason.

The debate gave rise to numerous actions in France. The Court of Cassation considered, in an opinion of 17 July 2019, that the scale was compatible with Article 10 of the ILO Convention (it considered on this occasion that Article 24 of the Social Charter had no direct effect).

Despite this opinion (which does not has the value of a decision) , a number of French industrial tribunals have decided to set aside the scale. Some jurisdictions have decided that the scale is not compatible with international law (CPH of Angoulême of 9 July 2020 RG F 19/00184). Others, such as the Reims Court of Appeal (25 September 2019, No. 19/00003), considered that if the scale was not unconventional, the review of conventionality did not exempt the judge from assessing whether it did not disproportionately infringe the employee’s rights by imposing burdens disproportionate to the result sought.

The decisions of the Social Chamber were then expected. At the Chamber hearing held on 31 March, the First Advocate General had suggested that the Court should engage, like the Reims Court of Appeal, in an “in concreto review”.

This is not the route followed by the French Supreme Court today. In summary, the Court of Cassation:

  • Recognizes the conventionality of the scale with regard to Article 10 of ILO Convention No. 158 (judgment No. 654: “The provisions of Articles L. 1235-3, L. 1235-3-1 and L. 1235-4 of the Labour Code are thus such as to allow the payment of adequate compensation or compensation considered appropriate within the meaning of Article 10 of ILO Convention No. 158. It follows that the provisions of Article L. 1235-3 of the Labour Code are compatible with the provisions of Article 10 of the above-mentioned Convention”)
  • Refuses to engage in a review of conventionality in concretocontrary to the suggestions of the First Advocate General and the position adopted by the First Civil Chamber in 2013 (judgment n°654: “In ruling in this way, when it was only up to her to assess the concrete situation of the employee to determine the amount of compensation due between the minimum and maximum amounts determined by Article L. 1235-3 of the Labour Code, the Court of Appeal violated the above-mentioned texts”)
  • Refuses to recognise the direct effect of the European Social Charter (judgment no. 655).

The conventionality of the Macron scale is thus again affirmed without reservation by the Court of Cassation.

This is very good news for French employers.

The decisions provide indeed legal certainty: judges cannot in principle deviate from the scale and must assess damages awards within the limits of the scale.

Will this however  make it possible to put an end to the contentious debates on the unconventionality of the scale? Nothing is less certain as  industrial courts mays well decide to disregard these decisions and take the risk to have their decisions cancelled by higher Courts.

They should however be more and more reluctant to do so.

Reorganisations in France: How to Select the Best Tool

Alexandra Stocki, French & EU Employment Group partner, authored an article titled “Reorganisations in France: How to Select the Best Tool” in IEL (International Employment Lawyer).

This article discusses the points that must be checked before considering the best tool for a reorganisation.

To access the full article, please click here.

New Ways of Working

Beatrice Pola and Alexandra Stocki are contributing authors to IEL’s (International Employment Law) “New Ways of Working” resource page that explores and keeps track of key legal and compliance considerations for multinational employers as new ways of working become increasingly embedded as the pandemic begins to recede.

On the France-specific page, Beatrice, Alexandra and Rachida address timely questions concerning remote work, return to work and vaccinations, health and safety, and unions and/or work counsels.

To access, please click here.

Why the EU Commission’s Gig Economy Proposals Will Not Meet French Expectations

Alexandra Stocki, French & EU Employment Group partner, recently published an article titled “Why the EU Commission’s Gig Economy Proposals Will Not Meet French Expectations” in IEL (International Employment Lawyer).

This article discusses a draft proposal directive which aims to improve working conditions in platform (contractual/gig economy) work. This proposed directive would ensure that people have or can obtain the correct employment status in light of their actual relationship with a digital labour platform resulting in these workers being classified as either employees of the platforms or as independent workers.

To access the full article, please click here.

Five Questions for Employers to Ask Before Metaverse Working

Alexandra Stocki, French & EU Employment Group partner, recently published an article titled “Five Questions for Employers to Ask Before Metaverse Working” in IEL (International Employment Lawyer).

This article addresses work performed within the metaverse (Mark Zuckerberg’s “embodied version of the internet”) and the evolving employment related legal concerns.

To access the full article, please click here.

Employment Law: Presidential Elections Part 2

Labor law is not central to the 2nd round campaign. The great opposition between Marine Le Pen and Emmanuel Macron is on pensions. Marine Le Pen is opposed to any increase in the current legal retirement age (62). The candidate of the Rassemblement national (RN) defends a legal retirement age of 60, for employees who worked before 20 and for forty years. Emmanuel Macron, on the other hand, wants to raise it to 64 or 65 and is still considering a broader reform, which could give rise to a referendum. The pension question might well be a key to the 2nd round of the election.

Besides this, Marine Le Pen still carries the idea of a national preference. Her program plans that the access of foreigners to any public or private employment, to the exercise of certain professions, economic or associative activities, functions of professional or union representation, would be fixed by law. Marine Le Pen clearly reserves the right to prohibit, by a simple law, any type of employment for foreigners in any sector of activity. Such a provision would most certainly be deemed contrary to the constitutional principle of equality, as well as to EU regulations. Before any adoption, such a provision would therefore require a modification of the constitution and of European commitments. Such a provision if adopted, would necessarily impact the activity of many French economic sectors.

Marine Le Pen refers from time to time to the need to make labor law more flexible. However, she usually does not specify her thoughts or give concrete examples. Such a statement is likely more of a slogan than an element of her program.

New Work Councils Roles Further France’s Climate and Resilience Law

Béatrice Pola, French & EU Employment Group partner, recently published an article titled “New Work Councils Roles Further France’s Climate and Resilience Law” in IEL (International Employment Lawyer.)

This article addresses Corporate Social Responsibility (CSR) and recently strengthened legal obligations companies must adhere to. It also discusses some of the options that companies and consultancy firms are now offering to quantify the impact of the Climate Law and to help companies implement their CSR policies.

To access the full article, please click here.

Employment Law: Presidential Elections

Labor law is not at the heart of the French presidential campaign, which is rather unusual. The latest major reforms, initiated under the presidency of François Hollande and then extended by the “Marcon” ordinances of September 22, 2017, seem to lead to an exhaustion of legislative inflation in this area. The overhaul of the organization of social dialogue, collective bargaining and the predictability of labor relations have considerably reformed labor law. There is no longer any political or social space for further reform.

Despite the uncertainties resulting from the war in Ukraine, the candidates are counting on a continuation of the economic growth that followed the end of the confinements and, probably in response to the social movements (yellow jackets), propose to strengthen the profit-sharing schemes.

  • Retirement

Emmanuel Macron and Valérie Pécresse propose an increase in the legal retirement age to 65. The main consequence – and objective – of this measure would be to significantly increase the working population. For the outgoing President, this proposal is part of a certain continuity with regard to his initiatives in terms of further economic development, and support for companies towards growth. This systemic reform, initiated during the mandate, had indeed been suspended in the light of the health crisis. Although it is not yet time to assess the consequences of such a measure in figures, pension funds were concerned as early as 2021 about the postponement of the retirement age in view of the foreseeable increase in claims (with regard to risks related to occupational diseases and accidents at work). Such an increase would affect the employer (additional payment to be made to the social security regime in case of occupational disease / work accident and protection against the dismissal for the employee). In addition, employers would have to redefine their HR practice, by creating favorable conditions for older employee to remain in employment. Please note that employers must negotiate on an annual basis on “quality of life at work” with the unions. The increase of the retirement age would also most certainly result in an increase of claims for discrimination based on the age, as regards dismissal, salary increase etc.

Finally, with regard to Valérie Pécresse’s program, she proposes to allow workers freely to combine employment and retirement, on an unlimited basis.

  • Flexibility

Despite a major pandemic episode that has led companies to make massive use of teleworking, the flexibility measures proposed by the main candidates do not address the new ways of organizing work. On the other hand, both the outgoing President and the candidate Valérie Pécresse propose to liberalize the monetization of working time. The candidate of Les Républicains (liberal party) proposes to open the “possibility of converting the RTT into salary, without charge and without limit”, while Emmanuel Macron proposes a device of “universal savings-time account”.

  • Equality between women and men

This subject was a “major cause” of Emmanuel Macron last five-year term, which explains why it is not repeated.

The Socialist candidate, Anne Hidalgo, proposes to establish as a rule “the presence of employees in remuneration committees”. The program thus presented does not detail a possible mechanism for employee representation in the company’s decision-making bodies on remuneration. The desire to fight against the large wage gaps nevertheless led the Socialist candidate to propose the introduction of a bonus/malus system directly linked to employers’ contributions with regard to the sharing of added value.

  • Employee profit-sharing

Promoting the development of value-added sharing mechanisms also stands out as a measure likely to have strong impacts on companies. Emmanuel Macron proposes to make mandatory, for companies that pay dividends, participation or profit-sharing schemes or the payment of an exceptional purchasing power bonus. While participation is mandatory for companies with at least 50 employees, profit-sharing and the payment of the so-called “Macron” bonus are optional mechanisms. With regard to the exceptional purchasing power premium, the conditions were first relaxed. From now on, the outgoing President proposes to triple the amount.

  • Wage increases

At the heart of the presidential campaign, purchasing power is erected as the main concern of the French by the presidential candidates. This concern is correlated by proposals for wage increases. Indeed, Anne Hidalgo proposes an increase of 15%, while Valérie Pécresse proposes an increase in net wages of 10% in 5 years for all employees who earn less than € 2,800 net per month.

 

IFLR European In-House Counsel Summit

Proskauer is a proud sponsor of the IFLR European In-House Counsel Summit taking place virtually on February 9-10, 2021. This conference will cover developments in the UK and European capital markets, M&A, legal technology, corporate sustainability, Brexit, competition law, and the global impact of COVID-19.

On day two of this event Béatrice Pola, Partner in the French & EU Employment Group in our Paris office, will present on a panel titled “Employment Law and the Future of the Workforce.” As companies adapt to the new reality of working from home employers have had to face situations unfamiliar to them until recently including how to hire and train new employees online and how to manage a team that may be split between the office and telecommuting.

During this timely discussion Béatrice will address the impact of remote working on employment law and employment contracts in France. She will also discuss the rise in telecommuting and some of the differences encountered working from home during normal circumstances versus during a crisis such as the COVID-19 global pandemic.

In addition, Béatrice will provide guidance on how to equally manage employees who have returned to the office and those who continue to work remotely, how to maintain a healthy work-life balance, and how to find innovative solutions to unprecedented remote situations.

For more information on this conference, or if you would like to register to attend, please click here.

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