France: Major labour law reforms continue

Estimated reading time 2 minutes

Labour law reform was a major topic of newly elected President Macron’s election platform, in order to tackle unemployment and inflexible rules on hiring and firing.

Following the first round of consultations with trade unions and employers' organizations, the Government issued a "work program to renew France’s social model". The plan foresees a number of major reforms to come into force within the next 18 months, with some of them adopted at this summer’s end.

The proposed labour law reform includes:                                

• Increased flexibility for company-wide collective bargaining: This should bring greater flexibility for employers, (e.g. implementing rules allowing them to hire and fire employees more easily).
• Simplifying workers’ representation by reducing the current four employee representative bodies down to two.
• Significant reforms of unfair dismissal protections: Proposals include putting limits on compensation for unfair dismissal, reducing the time-limit for termination claims and authorizing the government to introduce new rules on collective redundancies.
• Employee-side social security contributions will be reduced.
• Income tax withholding: A proposed new withholding tax regime on income is being postponed to January 1 2019.
• Reforming the unemployment benefits system, vocational training, and the retirement pensions (currently scheduled for 2018).

What does this mean for employers?

Businesses with a presence in France should continue to monitor developments, as these changes represent an attempt to significantly change French whole working culture.  For further information on the Labour Reforms in France, please contact Fidere Avocats on fidere@fidereavocats.fr

Provisional timetable of consultations with trade unions

• From June 9 to June 23: first topic: Content and hierarchy between levels of collective bargaining to give employers more leverage;
• From June 26 to July 7: second topic: Simplifying and strengthening social and economic dialogue and its actors;
• From July 10 to July 21: third topic: Securing working relationships.

Two meetings per topic are planned for each organisation, amounting to a total of 48 meetings. There will be other consultations with business organisations and non-representative trade unions.

Provisional parliamentary timetable

• June 22: Council of State’s opinion.
• June 28: Presentation of draft bill. 
• From July 10 to July 17: parliamentary debate in the National Assembly (official dates).
• From July 10 to July 27: parliamentary debate in the Senate (official date).
• No later than August 3: final parliamentary vote on the bill
• No later than September 20: adoption of the reform