Emmanuel Macron unveils major labour law reforms

On August 31, 2017 five "ordonnances" (decrees) were presented, with a total of 36 measures, resulting in significant changes in French labour law.

The key elements of the reform are:

Adjusting collective bargaining rules to economic reality:

• A new articulation between company and industry-level agreements: industry-level agreements will prevail on company agreements in specific areas.
• Wider opportunities and procedures to negotiate at company level: the employer will be able to negotiate in-house collective agreements more easily. For example, in companies with less than 20 employees, the employer will be allowed to negotiate with any employee of the company.

Merging employees’ representative bodies:

• A single body for all companies with more than 11 employees: the Social and Economic Committee (CES) will replace staff delegates, the Works Council and the Health & Safety Committee in order to simplify social dialogue.
• The opportunity to implement other representative bodies: by agreement, the employer will be able to maintain a Health & Safety Committee (mandatory in companies with more than 300 employees) and to create a Corporate Council with specific negotiation powers.

Simplifying the rules of redundancies:

• A new scope of assessment of economic grounds: the assessment of the economic ground in case of redundancies will be reduced to a national level only, whereas currently the financial health of companies is assessed at group level internationally.
• Simplified conditions of redeployment obligations: the employer should no longer be required to send individual redeployment offers to each employee but employees should be given access to a list of employment offers via the company’s intranet for example. Redeployment search should also be limited to France.

Making labour litigation more foreseeable:

• A cap on the amount of damages awarded by Labour Courts: damages will be capped according to a progressive scale at 3 months of salary for employees with 2 years of seniority and up to 20 months of salary for employees with more than 30 years of seniority.
• Simplified dismissal procedures: a new simplified dismissal letter template should be introduced and the mandatory statement of reasons in the dismissal letter should be reduced.
• A reduction of the statute of limitations: employees will have 1 year to challenge any kind of dismissal before Labour Courts instead of up to 2 years currently.
• Increased dismissal indemnities: mandatory dismissal indemnities should be increased at 25% of a monthly salary for every year of service instead of 20% currently.

As the Conseil Constitutionnel (French Constitutional Court) validated the legislative process on 7 September 2017, the five decrees will be presented to the Council of ministers on 22 September 2017 and are expected to come into force by the end of September.