Collective Bargaining Agreement Pharmaceutical Industry

An insight into the French collective bargaining agreement of the pharmaceutical industry.

When is the CBA Pharmaceutical Industry applicable?

The collective bargaining agreement of the pharmaceutical industry is applicable to companies whose activities relate to:
– Production and/or exploitation of pharmaceutical products and medication for human use;
– Research and development in human medicine and pharmacy;
– Promotion of medicinal products;
– Processing and packaging;
– Administrative activities, studies, consulting and services.

The NAF/APE Code, which is assigned by the French administration upon company registration, gives an indication.
The code of the CBA Pharmaceutical industry is IDCC 0176.

Main Characteristics of the CBA Pharmaceutical Industry

Besides employee benefits, the collective bargaining agreement of the pharmaceutical industry fixes minimum salaries, severance payments as well as seniority bonus.

Seniority Bonus

Certain CBAs like the CBA for advertising agencies and the CBA of the wholesale sector stipulate a mandatory seniority bonus.
The CBA of the pharmaceutical industry stipulates a seniority bonus for certain staff: employees classified in the first 5 classification groups and certain employees of group 6.
The bonus depends on the seniority of the employee.

Seniority 3 years 6 years 9 years 12 years 15 years 18 years
Seniority bonus 3 % 6 % 9 % 12 % 15 % 18 %

The amount of the seniority bonus is calculated on the minimum wage based on the CBA pharmaceutical industry for the job held by the employee. It is prorated in case of a part time contract.
The seniority bonuses are independent of the actual salary and are added, in all cases, to the actual salary. The bonus will be paid monthly and it will be mentioned separately on the French Payslip.
Employee with an actual annual salary of 25000 €, 10 years of service
Job classification 2B, corresponding to a minimum salary of 1673,02 € per month
Monthly salary :

Basic Salary 2083,33 €
Seniority Bonus 1673,02 € 9 % 150,57 €
Total monthly salary 2233,90 €

Severance Payment based on the CBA Pharmaceutical Industry

In case of an employee termination, the employer will have to pay a severance pay in France in most cases. The compensation is not due in the event of serious misconduct.
In France, this payment is either based on French labor law or the collective bargaining agreement. Both provisions have to be compared and the more favorable amount has to be paid to the employee.
The CBA pharmaceutical industry fixes compensations as follows:

Seniority Severance payment per year of seniority
at least 8 months, less than 5 years of seniority 0.30 month’s salaries
at least 5 years, less than 10 years of seniority 0.34 month’s salaries
at least 10 years, less than 15 years of seniority 0.38 month’s salaries
at least 15 years, less than 20 years of seniority 0.42 month’s salaries
at least 20 years, less than 25 years of seniority 0.45 month’s salaries
at least 25 years, less than 30 years of seniority 0.48 month’s salaries
at least 30 years, less than 35 years of seniority 0.49 month’s salaries
at least 35 years 0.50 month’s salaries

In addition, employees aged 45 or older and/or with 15 years of seniority receive an additional severance of one month’s salary ; employees aged 50 or older receive receive an additional severance of one month’s salary.
Based on the CBA pharmaceutical industry, the total amount of the severance pay is capped at 20 months’ salaries, not including the additional severance based on the employees age.
Different rules may apply to employee hired before January 1, 2019.

Example :
Executive with a salary of 80000 € per year, 3 years of service, 46 years old

Monthly salary Severance payment per year of seniority Severance payment based on seniority Additional severance payment based on age Total severance payment
6666.67 € 0.3 month’s salaries 6000.00 € 6666.67 € 12666.67 €

As a comparison, for the same employee the severance based on the labor code would only be 5000.00 €.