Labour law reform in France
Technical update 4 minute read

Labour law reform in France

25 October 2016

French labour reform law “El Khomri” will gradually become enforceable over the next two years.

A new labour reform law called “El Khomri” (named after Labour Minister Myriam El Khomri) was adopted into law on 8 August 2016 and will gradually become enforceable throughout Q4 2016, and all of 2017 and 2018. Likewise, the 130 decrees associated with the now-passed law will be published over the coming months.

The 588-page law, also known as “Loi Travail” is designed to give more flexibility to employers by reversing the existing order or “hierarchy” of standards, and make it easy for employers to adopt internal company policies and agreements, providing employees with lower benefits than the higher standard (such as the branch agreement for example).

The lawmaker’s goal is a complete reshuffle of the existing 3809-page labour code and 700 branch agreements.

As part of this new law, the number of branch agreements should reduce from 700 to 200 through renegotiations, and mergers of numerous branch agreements. This reform will take place over the next two years.

The 3 new standards in French labour law

1. A set of national rules called ordre public which define a core of non-negotiable, protected employee rights.

2. A set of negotiable rules called Champ de la négociation collective, or “scope of collective bargaining” among which the rules can be determined freely within each branch, each group of companies, and each worksite.

3. A default set of rules called dispositions supplétives, or “subsidiary default rules” which are applicable in case the branch or the company have failed to negotiate the rules which fall under the scope of collective bargaining.

The new structure

The new structure

The most interesting part of the law is the redefinition of the structure of collective bargaining. Within the scope of the collective bargaining agreement, the various levels are shown below:

Branch levels

Before the reform: a group agreement was enforced only when it was more favourable to the employee than the branch agreement, except when the branch agreement explicitly authorised it to carry less favourable measures. Similarly, a worksite agreement was enforced whenever (and only when) it was more favourable to the employee than the group agreement.

After the reform: a group agreement’s less favourable measures can prevail over the branch agreement even when the branch agreement doesn’t authorise it explicitly. Also, a less favourable group agreement’s measures can now prevail over a worksite agreement’s more favourable measures. A worksite agreement with less favourable measures can also prevail over a branch agreement’s measures.

Important: this reversal in the hierarchy of norms is applicable to all agreements, regardless of agreements’ signature dates.

The new precedence rules between branch, group and company must be redefined at each level as part of the general renegotiation, which is supposed to take place at all levels and in all branches within the next two years.

Many items have been included in the scope of collective bargaining, however, the default core areas in which the old hierarchy of rules will prevail are:

  • Minimum wages
  • Grades and levels
  • Medical insurance
  • Training funds
  • Physically demanding work
  • Sex discrimination.

In the above areas, the worksite agreement cannot be less favourable than the branch agreement. All items of working hours regulations are now open to collective bargaining. In the areas below, the company (worksite) policy will prevail even if less favourable:

  • Overtime pay
  • Night work
  • Hours of rest
  • Travel time compensation
  • Commuting time compensation
  • On-call policy
  • Maximum daily working hours
  • Dress/undress time compensation rules
  • Maximum daily working hours
  • Maximum weekly working hours
  • Overtime-exemption rules for executives
  • Part-time work rules
  • Bank holiday rules
  • Extra holidays rules for family-related events
  • Holiday accrual rules.

Keep an eye on your applicable branch agreement in the coming two years.

Next steps

The government will publish ready-made company policy templates for companies with less than 50 employees in order to promote collective bargaining in these companies which do not have staff representatives or union representatives.

Apart from defining the scope of collective bargaining, the law also contains many new rules in various areas such as:

  • Negotiating a company agreement in the absence of an elected staff representative or in the absence of a union-mandated staff
  • Content, duration and shape of the branch and company agreements
  • Continuation of benefits in case of a company buyout
  • “Right to disconnect” rules designed to avoid burnout
  • Extra holidays for male employees with children
  • Redundancy and company restructuration rules
  • Staff representatives’ working hours rules
  • Work council rules
  • Staff delegates and work council election rules
  • Foreign workers expatriation rules
  • Occupational medicine rules
  • E-payslips
  • Disabled workers
  • Protection of new mothers and fathers against dismissal.

Talk to us

TMF France’s expert HR and payroll team can provide guidance on the payroll-related impact of these new rules.

Need further information? Get in touch with us today.

Find out about our HR and Payroll services around the world.

Written by

Alix Mugnier

Payroll Manager, TMF France

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