Labor Law France
An insight into French labor laws.
Labor laws in France are unique and differ significantly from those of other countries. If you want to hire an employee in France, it is essential to familiarize yourself with the framework of a French employment relationship in order to be able to protect the interests of your company.
Special attention should be given to the drafting and conclusion of French employment contracts. In that regard, the possibility of agreeing on specific contract clauses such as a probationary period or a fixed-term contract should be analysed. Furthermore, French regulations on minimum wages and work conditions such as working hours must be respected.
French labor laws provide for a strong protection of employees. This is particularly evident when it comes to terminating an employee in France. Therefore, particular attention should be drawn to the various possibilities of dismissal or other terminations such as the mutual termination agreement in France. These are subject to a strictly regulated procedure.
French Labor Laws extensively regulate the employment relationship
The employment relationship is very much governed by the Labor Code, with regulations impacting the employment on an individual and collective level. It continuously evolves. Further sources of employment laws include the Social Security Code with regulations regarding absences, the Penal Code with provisions regarding discrimination and the French occupational health law with provisions regarding occupational health appointments and the assessment and prevention of occupational risks.
Moreover, collective bargaining agreements are a principal source of labor laws. In France, CBAs exists for most industry sectors (e.g. CBA SYNTEC, CBA of the metallurgy, Wholesale CBA, CBA textile industry) and many CBAs are binding for all employees nationwide. These collective agreements provide for a wide range of regulations including minimum salaries, longer notice periods and higher severance payments in case of a dismissal.
Which Collective Bargaining Agreement applies ?
In view of the large number of universally binding CBAs, whenever employment contracts are drawn up, the first question should be whether and, if so, which collective agreement applies. This is of upmost importance, as all further employment contracts with new employees will also be based on this collective agreement. An incorrect application in the beginning can lead to considerable costs. Changing the bargaining agreement later on is possible, notably when the employer deems it inadequate with the company activity. However, in order to change the applicable CBA the employer has to cope with a rigid administrative procedure.
Limit of the negotiation
All these norms restrict the negotiation between the employee and employer. In general, the employment contract stipulates rules that are not already regulated by law and that are left to negotiation. Apart from that, the employment contrat will in many cases stipulate provisions that are in the advantage of the employee such as a salary above minimum wage.
Labor Laws in France and the principle of the most favorable rule
All these sources of labor laws in France can sometimes provide for rules that seem contradictory. Principally, when several rules appear to be in conflict, it is the regulation most favorable to the employee that applies.
This is explained by a classification of the norms in a pyramid system in which a lower rule could be different from a higher rule only if it was more favorable to the employee. There are only few exceptions from this rule.
The role of Case Law in French Labor Law
Case Law also plays a very important role in France as it defines the application of French labor laws.
Most often, disputes brought to the labor courts relate to a dismissal, the amount of the severance payment or any outstanding payments. Especially the notion of "real and serious cause" for a dismissal gradually fed many disputes before the tribunals.
However, the competence of the labor court is more general : any individual dispute can be brought to court concerning the execution of the employment contract, from its conclusion to its termination.
Quick Facts : What you need to know about Labor Laws in France
The most important key facts about French labor law that might impact your company.
Fixed-term contracts – only with a reason
The basic rule is that employment contracts have to be permanent contracts. Fixed-term contracts are the exception in France, unlike other countries like Germany which allows for fixed-term contracts for a certain duration without any reason. This is not the case in France. The French Labor Law provides for a list of authorized reasons, for instance the replacement of an absent employee or seasonal work.
As it is not common to conclude fixed-term contracts, the trial period has a key role. The French employment law stipulates the duration but it is only valid if agreed upon by writing. The duration varies based on the collective agreement and the employee’s status.
The initial duration is significantly shorter than in other jurisdictions. For executive level staff with a permanent contract it is of 4 months only, but renewable in some cases.
Minimum salaries fixed by Labor Laws in France
France is among the European Union countries with the highest minimum wages. Only countries like Germany, the Netherlands, Belgium, Ireland and Luxembourg stipulate higher minimum wages.
In France, the minimum wage is referred to as SMIC. In 2022, it is 1603,12 € per month for a full-time position. Commonly collective branch agreements stipulate higher minimum wages for certain industries.
However in practice, employers will often have to offer significantly higher salaries for their employment offer to be competitive, notably for executive level staff in some industries such as the IT sector.
Working hours: 35 hours per week ?
Even though the 35 hours working week was introduced about 20 years ago in France, it is possible, and very common, to agree on longer working hours in the employment contract. So the 35-hour week is not at all the standard working time in France. Like in many other countries, employees in France work often 39 hours or more per week. In that case, the exceeding hours are subject to an overtime surcharge.
For executive level staff it is even possible to agree on a fixed number of annual working days rather than hours.
Employment contracts: in french ? in writing ?
Work contracts do not necessarily have to be in writing, though it is very much recommended. Certain clauses will only be valid if agreed by in writing. If an employment contract is drawn up it has to be in French by law.
Dismissal based on Labor Law in France
In France, the employement relationship can only be terminated with a valid reason. This differs from many countries such as the USA where a dismissal is possible without justification. For most dismissals, a severance pay is due. The amount is based on the Labor Code. Many collective bargaining agreements significantly increase the severance payment so the case in the CBA Distance Trading and the CBA Telecommunication. On top of that, in the event of an unjustified dismissal, the employee is entitled to further compensation.
French Labor Laws - to conclude :
Labor laws in France are extensively regulated and industry agreements commonly apply nation wide to all employees. These rules regulate most aspects of the employment relationship. Many companies are not aware of the particularities of employment laws in France. It is highly recommended to familiarize yourself with local conditions and to get expert advice before making any decisions.
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