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France Human Capital
Global Country Guide
Connecting you
to worldwide information
ConsultingThis document named France Global country guide was initiated in 2008 and updated in June 2010 by the French Human Capital practice. The objective of this guide is to provide Deloitte clients and staff who would be interested in working or investing in France an overview of French Labor Law. It aims at giving a comprehensive snapshot of France’s employment structure and regulations, benefits, payroll and tax rules, work councils and union landscape, regulatory reporting and data privacy laws, etc. This guide has proven to be an essential instrument in informing practitioners engaged on regional and international projects. It helps them to understand the French regulatory and very specific context, which they have to face when working on French projects with impacts on the organisation of Human Resources. For specific points, we suggest you to contact the Deloitte "Human Capital" and "Total Rewards & Benefit" French practices" David Yana Human Capital Solutions Practice Leader Deloitte France dyana@deloitte.fr Phone : +33 (0) 1 58 37 96 04 Philippe Burger Total Rewards Practice Leader Deloitte France phburger@deloitte.fr Phone: +33 (0) 40 88 24 60 Olivier Lagree Principal, Human Capital Solutions olagree@deloitte.fr Phone: +33 (0) 1 58 37 96 28 2
Table of Content
1. Employment Overview 5
2. Data Privacy 9
3. Work Councils and Unions 12
4. Human Resources Overview 17
5. Benefits Overview 21
6. Compensation Overview 31
7. Payroll and Employment Taxes 32
8. Regulatory Reporting 33
9. Redundancy 34
France Human Capital Global Country Guide 34
1. Employment Overview
1.1 Employment Background The small reduction in working hours, by one hour out
Employment Law provisions are laid down by statute of forty, made it possible to offset the shorter workweek
(Code du Travail) at the national level, rather than by through hourly productivity gains, negating the
state or region as in other countries. Employment anticipated affect of job gains.
in France is highly formal and regulated, with the
relationship between employer and employee being very
different than in common law systems. While common
law systems create employment “at will” with either the Employment in France is highly formal
employer or employees being able to change terms or
sever the relationship in many instances, France’s system
and regulated, with the relationship
heavily favours the employee, creating an increased between employer and employee being
burden on the employer in most employment scenarios.
very different than in common law
This system causes employers to be very careful in
their hiring decisions, as they are initiating a long-term
systems.
relationship. For the foreseeable future, employment in
France will not be ‘at will’, and the employed worker will
benefit from these protections. The shorter workweek policy was dropped between
1985 and 1987 in favour of a policy to boost labour
Dismissals are subject to stringent, and often market flexibility. From 1988 to 1998, employment
bureaucratic, procedural statutory constraints. Employees policy focused on continued measures to reduce the
and state agencies must be notified in writing, regardless workweek through legislation and negotiations. In June
of whether the termination is based on economic or 1998, the first Aubry Act was passed, and in January
performance grounds. Lay-offs on economic grounds, 2000, the workweek was reduced to 35 hours. By
especially those that affect multiple employees, are the end of 2001, the shorter workweek affected 53%
governed by separate rules and regulations. In fact, of French employees, or some 8.6 million workers.
changes in 2002 have made the hurdle even higher to Over 90% of those working for companies with over
remove workers based on economic situations. 20 employees enjoyed the shorter week, while only
companies with less than 20 employees were exempt
The French Workweek from the change. The 35-hour week helped to create
approximately 300,000 jobs during this period,which
In the early 1980s, the standard full-time workweek was
accounted for 18% of total job creation.
stable, but successive governments sought to shorten the
workweek in order to increase the number of jobs and
In 2003, this legislation was consistently “watered
reduce unemployment. Most would prefer to shorten the
down”; it is now possible for companies to keep
workweek through incentives or through collective and
employees’ working time up to 39 hours (or more) per
individual bargaining.
week, for a negotiable extra cost.
But the incentives offered over the last 20 years for
The collective bargaining agreement defines provisions
a collective shortening of the workweek produced
governing working time, but it is not necessarily locked
limited results, except when they accompanied binding
into the time-frame of the working week. It could, for
measures.
instance, entail working a 39-hour week, but with rest
days; or working a given number of hours per month
The first attempt was made by the left-wing government
with or without rest days. An employer may also opt for
in 1981, which cut the 40-hour workweek introduced in
compensating additional work hours in money rather
1936 to 39 hours. After the breakdown of talks between
than rest days (at least a 10% premium).
labour and management, the government imposed the
39-hour week with no loss of pay.
France Human Capital Global Country Guide 5Time measurement restrictions may be also based on 1.2 Employment Contracts
hours per week, hours per month, or days per year, and All employees in France must have a written
also require: contract of employment.
• An interrupted period of one 35 hours day’s (24 + 11)
rest per week, which, in principle, should be on a Sunday Temporary employment contract
• A minimum of 11 hours’ consecutive rest per day The employee is hired and paid by a temping
• A limit of 48 hours per week, and even in exceptional agency. Temporary employment contracts may be
circumstances, working time may not exceed 60 hours renewed once, on the condition that the total days of
per week. Working time may not exceed an average employment do not exceed 18 months (depending on
of 44 hours per week for a period of 12 consecutive the reason for using such a contract).
weeks. Executives other than senior management may
be subject to specific rules regarding working time. The temping agency recruits to replace an employee on
a temporary basis, to cover a temporary increase in work
Medical Exam or for seasonal workers.
Undertaking a medical exam prior to starting work is a
legal requirement. Fixed-Term contract (CDD)
A Fixed-Term contract must state in writing the duration
According to the Code du Travail (Codified Employment
and the reason of the contract. The probationary
Statutes), every employee must undertake a medical
period for a contract of less than six months may not
exam prior to employment or at the latest prior to the
exceed two weeks and, for contract of over six months,
termination of the trial period to determine:
the probationary period may not exceed one month.
• Whether the employee suffers from a serious The CDD is fixed for a defined period of time up to a
infection, which could endanger other employees maximum of 18 months
• Whether the employee is fit to perform the duties for
which he or she is to be responsible Permanent contract (CDI)
• Whether, as a result of the medical exam, the position Though this is not mandatory by law, the company
offered might be adapted or another position be should provide the employee with a written copy of the
offered to the employee. contract signed by both parties. The contract should
then stipulate the date of employment, social security
Every 2 years, all the employees must undertake a details, the company details and the place of work, the
medical exam. remuneration, notice period, length of probationary
period (1 to 3 months) and, of course, the position
occupied.
All employees in France must have The major factors to consider in French employment
contracts include:
a written contract of employment. • The agreement should be in writing – If not written,
the Courts will imply that a contract nonetheless
exists, and will assume conditions that favour the
employee.
• The contract of employment should be in French –
Although the contract can be translated into other
languages, the French version will supersede all other
versions where conflicts occur.
6• The contract should make clear whether the employee Non-compete and nondisclosure/confidentiality clauses
is a ‘cadre’ or not – Executives are labelled ‘cadre’, and should be treated with great care – While non-compete
this status creates additional conditions under French clauses are possible in France, the Court is requiring that
Employment Law that should not be taken lightly, the clause is bound to a financial compensation.
including supplementary obligations and additional
costs to the employer and to the employee. It is common for the data elements of the contracts to
• The job title should be carefully considered – Job be maintained in the company’s HR system, to support
Codes must clearly relate to a job function under a reporting requirements and access to the data.
collective bargaining agreement of statute. This is
especially true if the job title is defined in English, 1.3 Employee Groups
which is becoming more prevalent on business cards. There are three main working groups in France:
Again, the Courts will refer to the French title, and Executive grade employees (cadres), supervisors (agents
favour the employee side in disputes. In any event, the de maîtrise) and employees (employés or ouvriers).
title on the pay slip should be in French.
The main distinction between the three working groups
• The functions to be undertaken should be clearly
is in relation to education, qualifications and job’s
defined - if possible by reference to the applicable
exigencies.
collective bargaining agreement, as well as to any
appropriate objective yardstick. For sales people,
The executive employees are employees who perform
targets, or the means of calculating such targets,
supervisory functions. In France, it is possible to be an
should be bilaterally agreed upon and accounted for
executive employee, without supervising a team. Being
either in the contract of employment or an annex
an executive employee is a sort of status or a specific
which is signed by the employer and the employee
social representation.
prior to the period during which the objectives are to
be attained.
It seems that the French term ‘cadre‘ is blurred .
• The place of work and the hours of work should be Therefore companies use more and more English terms
defined – The standard (and not the maximum) French to define their job positions. The executive status is not
working week is now 35 hours in most circumstances. legally defined in the French Law, but it is mentionned
Overtime or time off could apply for anything over this in professionnal classifications. One can get this status
standard workweek. either by education and training or by experience
• The applicable Collective Bargaining Agreement and seniority. Executive status is given in function of
(Convention Collective) should be carefully identified the level of responsibilities, degree of autonomy in
– The Company need not have signed the agreement the organization and decision,serious expertise. The
for it to be applicable to the employee. The executive mainly manages a team.
Agreement applies to the employee, not the employer.
In addition, the employee’s echelon and coefficient
should be stated.
• The trial period and notice period should be clearly
set out – Generally speaking, ‘employees’ receive a
one-month trial period and ‘cadres’ receive a three-
month trial period. This trial period is eventually
renewed for an additional period of a maximum the
same duration. These periods may vary based on the
collective agreement.
France Human Capital Global Country Guide 7Supervisors are in charge of technical functions, In many cases, an ‘Administrateur’ or Director of
including the control and supervision of the execution of a French company might also have a contract of
the work that was charged to contractors or the super- employment, but this would be considered by French
vision of employees that perform technical functions. Law to be totally separate from his or her role as an
Supervisors have a part of autonomy and can manage officer of the company.
a team.
Such a contract of employment would relate to a
mployees are in charge of the execution of more or
E specific function without the role of ‘Director’ and
less complex tasks might for example be in his or her capacity as Financial
Manager, Sales Manager, or Human Resources Manager,
Senior executives are not subjected to the global time and this agreement would give the employee the full
lines of the Company. protection of French Employment Law provisions.
Part-time work has not been prevalent in France, and as
a result, most employees would be considered salaried,
but subject to the workweek restrictions and overtime
pay regulations.
A Director of a French Company is not generally held
to be an employee in that particular capacity, instead
he or she is held to be solely an officer of the company.
Particular attention should be paid to terminology, for
example, in legal terms the French word ‘Directeur’ is
not a translation of ‘Director’ in the sense of a member
of the Board of a Company, but instead ‘Directeur’
would usually be translated as “Manager”.
However, a ‘Director’ being an individual appointed to
the Board of the Company by the shareholders would
normally be translated as an ‘Administrateur’.
The importance of these linguistic distinctions flows
from the fact that because an ‘Administrateur’ is solely
an officer of the Company (in French a ‘mandataire
social’) then he or she does not have a contract of
employment with the Company and thus does not
benefit from the extremely protective provisions (for the
employee) of French Employment Law.
An ‘Administrateur’ can generally be dismissed from
his or her position without notice or compensation,
although the method of dismissal should not be
vexatious.
82. Data Privacy
The EU proposed a Directive, in 1990, the main aim
of which was to harmonize protection of data privacy in
the EU.
The need for data privacy first arose in the early 1980s protection of personal data therein. The Directive had a
due to new automated methods of processing personal three-year transition period, until October 25, 1998, in
data. The European Commission (at that time, the which time, it had to be implemented into the national
Council of Europe) reacted by drawing up Convention laws of the member states.
Number 106, which laid the framework for maintaining
the individuals right for personal data protection. Within 2.1 Legislation
this framework, data protection was defined under The EU data privacy directive adopted in 1998 was
three main areas; designed to set a standard for privacy rules throughout
• It stated that the individual must have the right of Europe. It is not itself law, but meant to be implemented
access to their personal data, to correct it and object through national legislation of member states. France
to certain types of data processing. adopted a data privacy law on January 6, 1978. This
was called the “Loi informatiques et libertés”. It was
• It stipulated that personal data must be used for
then reformed on August 6, 2004.
specified, explicit, and legitimate purposes.
• It was drawn up to ensure that sufficient security was Founded by the law of January 6, 1978, the CNIL
in place before data was allowed to be processed, (commission nationale de l’informatique et des libertés
to prevent accidental or unauthorized access or – French commission for computing and freedoms)
manipulation. is an independent administrative authority protecting
privacy and personal data. This authority has the right to
However, not all countries within the European Union sanction in case of breach of data privacy.
(EU) adopted this Convention. Even among those
nations that had laws based on the Convention, there This legislation follows the European legal tradition, by
were significant differences in contents and modes of viewing data privacy as a fundamental human right.
practice. This led to data transfers that were sometimes Europe also has a tradition of prospective, compre-
blocked even within the European Community. hensive lawmaking that seeks to guard against future
harms, particularly where social issues are concerned.
Consequently, the EU proposed a Directive, in 1990,
the main aim of which was to harmonize protection of 2.2 Personal Data Restrictions
data privacy in the EU. The Directive had two additional
A quick review of the Directive’s basic terms makes clear
goals:
that, consistent with European tradition, the Directive
• It was set up to make sure that member states would
takes a regulatory and comprehensive approach to
protect the “fundamental right” to privacy with
privacy issues. It has two basic objectives:
regards to the processing of personal data.
• The Directive was necessary to prevent member states First, the objective is to protect individuals with respect
from blocking the free flow of personal data on the to the “processing” of personal information, and
basis of invasion of data privacy, thus allowing for second, to ensure the free movement of personal
better business integration within the EU. information within the EU through the coordination of
national laws (Article 1). Personal information is defined
In 1995 the Council and Parliament of the European as information relating to an identified or identifiable
Union adopted Directive 95/46/EC to consolidate the natural person.
France Human Capital Global Country Guide 9An identifiable person is one who can be identified, Sensitive Data: “Sensitive” data, such as that pertaining
directly or indirectly, in particular by reference to an to racial or ethnic origins, political or religious beliefs,
identification number or to one or more factors specific or health or sex life, may not be processed at all, unless
to his/her physical, physiological, mental, economic, such processing comes within limited exceptions,
cultural, or social identity (Article 2). for example, if the individual gives explicit consent
(Article 8).
The scope of the Directive is very broad. It applies to all
processing of data, on-line and off-line, manual as well Security: The Directive requires that “appropriate
as automatic, and all organizations holding personal technical and organizational measures to protect data”
data. It excludes from its reach only data used “in the against destruction, loss, alteration, unauthorized
course of purely personal or household activity” (Article disclosure, or access be taken (Article 17).
3). The Directive establishes strict guidelines for the
processing of personal information Data Controllers: The Directive requires those
processing data to fulfill very specific requirements.
“Processing” includes any operations involving personal Specifically, they must appoint a “data controller”
information, except perhaps its mere transmission responsible for all data processing, who must register
(Article 2). For example, copying information or putting with government authorities (Article 19) and
it in a file is viewed as “processing.” notify them before processing any data (Article 18).
Notification must at a minimum include: the purpose
Data Quality: The Directive requires that all personal of the processing; a description of the data subjects;
information must be processed fairly and lawfully, so the recipients or categories of recipients to whom the
that, for example, a person whose personal information data might be disclosed; proposed transfers to third
is at issue knows that it is being collected and used and countries; and a general description that would allow a
must be informed of the proposed uses. Furthermore, preliminary assessment of whether requirements for
the use of personal information must be limited to security of processing have been met (Article 19).
the purpose first identified and to other compatible
uses, and no more information may be collected Government Data Protection Authorities: The
than is required to satisfy the purpose for which it is Directive also mandates a government authority to
collected. In other words, the theory is that if a person oversee data processing activities. Each member state
provides information to obtain telephone service, that must establish an independent public authority to
information should not be used to target that person for supervise the protection of personal data.
information about vacation trips, nor should information These “Data Protection Commissions” must have the
relevant to a customer’s interests in vacation trips power to (1) investigate data processing activities and
be required to get, for instance, telephone service. monito application of the Directive and (2) intervene in
Information must also be kept accurate and up to date the processing and to order the blocking, erasure, or
(Article 6). destruction of data as well as to ban its processing. They
must also be authorized to hear and resolve complaints
Legitimate Data Processing: The Directive sets from data subjects and must issue regular public reports
forth rules for “legitimate” data processing. Most on their activities (Article 28).
basically, this requires obtaining the consent of the
data subject before information is processed, unless
specific exemptions apply (Article 7). In addition, certain
information must be provided to data subjects when
their personal information is processed (Article 10), such
as whether they have rights to see the data, to correct
any information that is inaccurate, or to know who will
receive the data (Article 12).
10Transfers of Data Outside the EU: The Directive
requires that member states enact laws prohibiting
the transfer of personal data to countries outside the
European Union that fail to ensure an “adequate level
of [privacy] protection” (Article 25). Where the level of
protection is deemed inadequate, member states are
required to take measures to prevent any transfer of
data to the third country. Member States and their Data
Protection Commissions must inform each other when
they believe that a third country does not ensure an
adequate level of protection. To satisfy this requirement,
the United States has enacted the Safe Harbor
Framework, but all countries must do the same.
Where the data physically resides is less important than
how it is being “moved” (“transport”). If someone is
accessing the data from the United States (either in a
service center situation or for reporting purposes), that
is considered to be “included”. Additionally, misuse
of sensitive data, whether in the EU or the US, is still
inappropriate and subject to prosecution.
France Human Capital Global Country Guide 113. Employee representatives
3.1 Organization Rights and Functions of the Employee Delegate
Depending on its number of employees, a company Rights
might be required to organize elections for the following In order to exercise its function, the employee delegate
employee representatives: has the following rights:
• Once a company has more than 10 employees over • The employer needs to organise monthly meetings
a certain period, it has the responsibility to organize with the representatives. The employee delegate
elections for Employee Delegates (Délégués du can ask in writing questions at least 2 days before
personnel). the meeting. The employer is then bound to answer
• Once a company has 50 employees or more over a these questions in writing within 6 days following the
certain period, it must form a Works Council (Comité meeting.
d’Entreprise) and a Sanitation, Safety and Working • Time-off of up to 15 hours minimum a month to fulfil
Conditions Committee (CHSCTcomité d’hygiène, de their functions;
sécurité et des conditions de travail). • Circulate freely on the company premises, and be
given office space in which to congregate and hold
• Every trade union may request the appointment of
meetings
Union delegates (“délégués syndicaux”) in any and all
companies having 50 employees or more and in which
Functions
they are representatives. Since the law 2008-789
(20 August 2008) on “renewing social democracy” • Represent the employees and present to the employer
(rénovation de la démocratie sociale),trade unions may all individual and collective complaints about salaries,
also appoint a Union representative (“représentant de respect of the Employment law (“Code du travail”) and
la section syndicale (RSS)”). other rules and regulations in vigor concerning Health,
Safety, Hygiene, and other forms of Social Protection
3.2 The Employee Delegate (Protection sociale).
Definition and Purpose • To inform the Work Inspectorate (L’Inspection
du travail) of all non respect of complaints and
Employee delegates are generally elected, every four
observations relative to the application of laws and
years. Where a company has 11 or more employees,
regulations within the company over which they have
the employer is required to initiate the election. It must
a duty to provide control.
ask the representative trade unions (which have an
exclusive right to present candidates for the first ballot) • Employee delegates have several other functions,
to propose candidates. certain applying in the absence of a works council.
For example, they have to be consulted about
The employee delegates’ duties are: any changes in annual vacation, working hours,
“reclassement” of employees who have been victims
• to assist the employees in submitting their grievances
of on the- job accidents or work-related illnesses.
to the employer;
They can also make suggestions about the general
• to control the proper application of the provisions of organisation of the company.
the Labor code;
• in companies with more than 49 and no more than
200 employees, the employer may choose to set up
a sole body of employee representatives (“délégation
unique du personnel”), whose duties and rights are
those of the employee delegates on the one hand,
and those of the Works Council on the other hand.
The representatives thus appointed are elected along
the rules applicable to employee delegates and are
entitled to 20 hours minimum per month to perform
their duties. The number of delegates is proportional
to the size of the work force.
123.3 The Works Council Rights and Functions of the Works Council
Definition and Purpose Rights
The Works Council is an entity representing the Members of the Works Council are entitled to twenty
employees in their relationship with their employer. hours per month of paid time off to perform their
It is mandatory to hold Works Council elections in functions. They are also entitled to circulate freely on the
companies having 50 or more employees. The Works company premises, and be given office space in which
Council is composed of employees elected every four to congregate and hold meetings.
years directly by the workforce.
Unless otherwise agreed with the Works Council, this
In companies with less than 200 employees, the office space must be used exclusively by the Works
employer may decide, after consulting with the Council and should include the usual office equipment
employee representatives, that the employee delegates and facilities.
also have the rights and functions of the works council
(“Délégation Unique”). Where a company has 50 or more employees, but there
is no Works Council, the employee delegates have the
Works Council meetings are, in principle, held at least same economic functions as the Works Council. In
once a month (when the company has more than 150 addition to their contribution to the social and cultural
employees) and are presided over by the employer who activities, employers pay 0.2% of the gross salaries
is an ex officio member of the committee. The agenda paid as a contribution to the operating expenses of the
of the monthly meeting is decided by mutual agreement Works Council.
between the employer and the Works Council’s
secretary, who is responsible for drafting the minutes. Functions
The Works Council’s functions fall into three separate
The size of the Works Council depends on the number categories:
of employees employed in the Company. • Welfare of staff (direct management) - e.g., in-house
cafeteria, sports, entertainment, vacation benefits, etc;
The works council is made up of:
• Problems relating to staff (advisory capacity) - e.g.,
• A delegation of employees elected for a period of four collective dismissal for economic reasons, dismissal of
years. The number of employees in this delegation protected employees, etc.;
varies according to the size of the company.
• Business policy and decisions (advisory capacity) -
• The employer (or its representative), who also presides e.g., economic and financial matters, employment,
the Works Council. The employer can be accompanied working conditions, professional training, research
by two other employees. Although they can advise and development policy, equal rights between men
the employer on certain issues, they have no voting and women.
powers.
• The works council can also include several union
members. Each of the trade unions which have
elected members in the works council can also
nominate a representative.
It is mandatory to hold Works Council
elections in companies having 50 or
more employees
France Human Capital Global Country Guide 133.4 Trade Union Delegates Rights and Functions of the Trade Union Delegate
Definition and Purpose Rights
Trade union delegates in companies are expected to Trade union delegates are allowed 10 hours off per
carry out the activity of a trade union (i.e., to represent month in companies having 50 to 150 employees, 15
the professional interests of its members). hours in companies having 151 to 500 employees, and
The employer does not have to initiate the appointment 20 hours in companies having over 500 employees.
of trade union delegates, but may only request for Appropriate premises and facilities must be made
the cancellation of the appointment in Court, if the available to them (e.g., they must be allowed to put up
designation is deemed fraudulent or if the required information or notes on a special notice board, and be
conditions for a valid appointment are not met. able to hand out information sheets prior to or after
work).
The law 2008-789 (20 August 2008) on “renewing
social democracy” (rénovation de la démocratie They are also entitled to circulate freely within
sociale) changed significantly the rules of trade union the company and benefit from special means to
representation in France. communicate with the employees and organize their
activity on the condition not to disturb the employee or
While before five historical trade unions were the only team activities.
unions that were nationally recognized and allowed to
negotiate with the government, all trade unions are now They may also cumulate their mandates as trade union
required to prove their representative character at the delegate with those of employee delegates, works
levels they intend to exercise their mandate: company council representative or CHSCT representative.
or undertaking, group, professional branch, national or They may also enter into collective bargaining
inter-professional levels. agreements, such as those regarding the duration
of work. Where a company has one or several union
The criteria used to establish the representative delegates it must annually discuss with them, the
character of a trade union and their ability to take part wage raise, the working conditions and the duration of
in collective bargaining activities are the following: working time. However, there is no legal requirement to
its number of subscribers and their contributions, its reach an agreement with them. Trade union delegates
influence, its independence towards the employer, its are authorised to attend all Works Council meetings.
seniority (minimum 2 years within the professional field
and geographic area of the negotiation), its financial Collective Bargaining Agreements (CBA)
transparency and the number of votes it received In addition to the relative constraints of the Code du
(minimum 10% on the company level and 8% on Travail, at least from the perspective of the employer
the branch, inter-professional and national levels). A (the French Codified collection of Employment Law
transition phase for its implementation applies. provisions), there are often additional, and perhaps
equally constraining, provisions set out in Collective
Since this new law, a trade union, if it does not have a Bargaining Agreements (CBA), known in French as
representative character in the company or undertaking, “Conventions Collectives de Travail”.
can still appoint a trade union representative
(“Représentant de la section syndicale (RSS)”), who Collective Bargaining Agreements may be applicable
benefits from the same prerogatives as the trade union at multiple levels, from national coverage all the way
delegates, except that it cannot, except under certain down to a specific plant. The agreements are in principle
circumstances, negotiate and sign Collective Bargaining negotiated between the labour unions’ representatives
Agreements. and the employer.
14However, the ability to negotiate a CBA with employer The Group Committee
was recently extended to include other employee A Group Committee must be created within each group
representatives in certain circumstances. They apply composed of a parent company and its subsidiaries and
to all employees within the company, regardless of all affiliated entities, having their registered office in
whether the employee belongs to the trade union or France. However, this is subject to the condition that the
not. parent company controls directly or indirectly 50% or
more of the subsidiary’s shares.
While many agreements are negotiated, the Minister of
Employment may ‘extend’ one, at which point, it will Upon request of theirWorks Council, companies
cover all companies operating within the scope of the of which Parent Company is located in France and
agreement, regardless of whether they are members of provides evidence of control may be included in the
the union or even participated in its creation. group. The Group Committee is not a substitute for the
Works Council or European Works Council, although
As a very general rule, where a conflict of interpretation the European Works Council may replace the Group
exists between the Code du Travail and that of the Committee.
collective Bargaining Agreement, then the provisions
which are most favorable to the employee are likely Its purpose is to provide the representatives of each
to prevail. If there is no CBA applied in a particular company with more comprehensive information
undertaking or company, an employee may petition concerning the activity of the group of companies as a
his or her employee for such a collective bargaining whole. The Group Committee meets at least annually
agreement to be applied, and could do this either and must be informed about the group’s financial and
directly or through his or her staff delegate. economic situation, the employment situation and
progress in the group and the measures contemplated,
if any, that may affect the group’s personnel and/or the
3.5 Other employee representatives
employees of each company within the group.
The Sanitation, Safety, and Working Conditions
Committee CHSCT
In each company employing 50 employees or more, the
employer must create a Sanitation, Safety and Working
Conditions Committee. This committee is expected to
contribute to the protection of the employees’ health
and security and to the improvement of working condi-
tions. The committee must be consulted in all cases of
major changes regarding Sanitation, Safety and Working
conditions in the company. This Committee is taking
an ever growing importance in the company regarding
the development of the employer’s Social responsibility
in matter of health protection at work (for example
psychosocial risks prevention).
The members are allowed a certain amount of time
off work to perform their duties (excluding time spent
meeting with the employer), depending on the number
of employees in the company.
France Human Capital Global Country Guide 15The European Works Council (“EWC”) 3.6 Special Protection of Employee
Any company or group of companies with a “European Representatives
dimension” must create an EWC where the company/ Any employee representative (whether member or
group employs at least 1,000 employees and where at alternate to the Works Council, to the Sanitation and
least two companies in the group employ a minimum of Working Conditions Committee, trade union delegate
150 employees in two different EU member states. or employee delegate) is granted by law a special status,
which is very protective of their right to employment.
The competence of the EWC shall be limited to The employer may only terminate their employment
information and consultation on matters concerning the subject to the very limited circumstances and with
community scale undertaking or group. Consultation is prior written authorisation by the Labor Inspector and,
here defined as “ the organisation of an exchange of for certain of the above representatives, after having
views and the establishment of a dialogue “. consulted the Works Council.
164. Human Resources Overview
4.1 Employment Documents and Identification In the meaning of the Code du travail (articles L.1261-1
The key identification numbers in France include: to L.1263-2 and R.1261-1 to R. 1264-3). The rules in
regards to transnational posting of workers applies in
• SIREN/SIRET Codes
scenarios where an employer, usually based outside
• INSEE Numbers (Social Security Numbers) of France, gives a specific assignment to its employees
that has to be carried out in France, with the intention
The INSEE is a numerical indexing code used by the that, once the assignment has been completed, the
French National Institute for Statistics and Economic employees will resume their work within their home
Studies (INSEE) to identify various national and regional company.
entities, including communes and départements. They
are also used as national identification numbers given to The rules for the “transnational posting of workers” thus
people as well as Social Security numbers. apply to employers based outside of France who have
work to do in France in the following four contexts :
SIREN codes are given to businesses and nonprofit provision of services, intra-company mobility, provision
associations, SIRET codes to their establishments and of employees for temporary work and work on their
facilities (SIRENE database). These are unique identifying own behalf.
numbers assigned to each business / establishment from
its creation to its dissolution. In regards to regular work permit application and when
deciding on whether to grant a work permit, the French
Social security number (13 digits + a two-digit key) are immigration authorities consider the following aspects:
national identification numbers given to people. These
• The employment situation (within the professional and
are the primary numbers provided to employees and
geographic area)
citizens for national identification, and are tracked by
companies to identify employees and report employee • The capability/qualification of the foreigner in regards
data to the government. They are the unique identifying to the position
numbers for employees. They are also used by • The employment conditions and the compensation
employees for healthcare and pension purposes. • The respect of French social legislation by the
employer
There are exceptions for people in particular situations.
• The respect of the applicable legislation in regards to
the profession by the employee
This is a unique identifying number used to track all
employees in France. • The conditions in regards to the employee’s
accommodation
Immigration rules for foreign nationals
In order to work in France, all foreigners need to possess
a resident permit (“titre de séjour”) and a work permit
(“autorisation de travail”). As usual in immigration Social security number is a unique
rules, citizens of certain countries benefit from certain
exemptions. For example, most EU citizens do not
identifying number used to track all
require to possess these permits, but immigrations rules employees in France.
might apply for countries falling under transitional rules
(last countries which entered into the EU).
Regulations applicable to transnational posting
of workers differ from those applying to regular
employees.
France Human Capital Global Country Guide 174.2. Paid and Non-Paid Leave Treatment around timeliness of submission are adhered to,
Vacation/Holidays reimbursement for lost time will be
paid by the social security scheme.
Time-off work guidelines are comprised of both
government legislation as well as provisions included
The daily benefit is payable starting from the 4th day
in bargaining agreements. The Code du Travail dictates
of absence from work and is generally equal to 50% of
both Bank/National Holidays as well as Vacation Time
lost wages for the first 30 days, and 67% of wages after
off. Bank holidays may include approximately 10 days,
30 days when the person has 3 or more dependant
which is reasonably in line with other industrialized
children.
countries.
The first 3 days wages are lost to the employee. The
Since the new law n° 2008-789 (20 août 2008), the
payments have ceiling amounts restricting the maximum
employee will be required to have worked at least 10
quantity of payments received,
days before he/she has the right for paid holidays. You
but generally are payable for up to 3 years of absence.
earn 2,08 days holiday per month worked, which is
Companies may allow the wage of the employee to be
5 weeks (25 days) per year. The normal period for the
maintained during the sick leave. They will ask then a
calculation of the vacation entitlement is from June
subrogation to receive the daily benefits from the social
1 to May 31 each year, though Collective Bargaining
security.
Agreement can derogate from this rule.
Maternity/Paternity Leave
It is worth noting that holidays are usually accrued but
not taken in reference year “n” (1 June to 31 May) but Maternity and Paternity Leave is also governed by the
instead the entitlement may be taken in the following French social security (Securité Sociale) system, and is
year “n+1”. not provided directly by the company. As a general rule,
the length of maternity leave in France depends first and
foremost on the number of children which the female
Employees in France can also be entitled to
employee has in her charge; prior to the pregnancy
compensation days (also called JRTT - Jours de
considered.
“réduction du temps de travail”), depending on
the applicable working time regulation. This is to
In case of first or second birth, then the period of
compensate for work days that amount to greater than
maternity leave lasts 16 weeks (extended to 18 weeks
35 hours per week. The new law n° 2008-789 (20 août
in 2011 from a EU directive) ) (6 weeks before the due
2008) has significantly simplified the French working
date and 10 weeks after) . If it is the third time (or more)
time regulations. It created a single and negociated
that the salaried employee gives birth to a child, then
way of organising working time, instead of 4 different
the period of maternity will increase to 26 weeks (8
ways previously applicable. In order to give more
weeks before the due date and 18 weeks after). These
flexibility to the system, the company can now organize
periods may be extended in the event of a medical
working time regulations through collective bargaining
condition linked to the pregnancy or specific local or
agreements in company or undertakings (which may
collective bargaining arrangements.
derogate from the collective bargaining agreements
negotiated on higher level).
During the period of maternity leave, the French Social
Security system covers the cost of maternity daily
Sick Leave
allowance (calculated on the basis of the average salary)
Sick Leave is governed by the French social security and certain pregnancy-related costs.
(Securité Sociale) system, and is not provided directly by
the company. Employees are required to visit a doctor, In addition to maternity cash benefits paid to women
who may decide to prescribe sick leave for an employee. during pre- and post-natal leave, paternity leave benefits
are paid to fathers. Finally, for an adoption, daily
Doctors and employees are required to complete a sick benefits may be shared between the two parents.
leave form, which is submitted to the social security
scheme and to the employer. As long as certain rules
18Military Leave Leave for Family Events
There is no special provision for military leave in France. This is for the purpose of birth of a child, marriage, or
death. The employee can obtain up to four days of paid
Sabbatical leave depending on the circumstances.
Any employee who has worked at a company for more
than 36 months (and has been working for more than There are some other types of leaves too that an
6 years) can claim this leave. It is up to the employer employee can obtain like leave for a sick child and leave
to accept or refuse this leave. During this leave, the for family reasons. These are mostly non-paid.
employee does not lose his position in the company
however is not paid for this leave. This leave can extend
from 6 to 11 months. It has to be requested and
validated 3 months in advance.
Leave to Establish a Company/Business
This leave can be requested by any employee with
more than 24 months of work experience in the same
company. It is up to the employer to accept, delay or
refuse (if the company has less than 200 employees and
under certain conditions) this leave. The employee is
not paid during this leave, however, can resume his/her
position upon return. The period of this leave extends
one year and can be renewed. This leave has to be
requested at least two months in advance.
Study Leave
There are two types of study leaves:
a) t he CIF (congé individuel de formation) If an
employee wants to pursue certain studies out of
personal choice. He can obtain a leave of a maximum
of an equivalence of 11 months to study out, he is
not paid by the company, but by a special fund. At
the issue of his training, the company has to propose
him an equivalent job.
b) An individual wants to attain certain competencies to
participate in unions and union activities.
This leave is restricted to senior employees and a lot of
conditions have to be fulfilled to obtain this leave. It can
extend for up to one year for personal reasons and 18
days for union purposes.
France Human Capital Global Country Guide 194.3 Headcount Reporting Considerations 4.5 Absence Tracking
As with many countries, leaves include the more Though the legislation is not precise in regards to the
complex headcount considerations. While in some use of a specific absence tracking system, the use of
countries, workers remain as ‘employees’ while on some such a system is essential in order to ensure compliance
leaves (including maternity), in France, the employee with the French legislation. An example of this is the
contract is suspended during this period. As a result necessary tracking of overtime hours, or more generally
headcount reporting will need to define equal treatment of working time. Due to the complexity and employee-
for this condition. friendly aspect of the legislation, a company would face
many risks should it have no absence tracking system
The treatment of temporary workers (“salariés and should it enter in conflicts with employees in this
intérimaires”) must also be considered across countries. respect. Moreover, it would be nearly impossible to have
In France, they are not considered employees even reliable payroll processes without such a system.
though they have a contract directly with the temping For example, the company needs to track individual
agency and are paid by the agency. The company using rights for training (DIF):
the services of these temporary workers only has a
contract with the temping agency, and not with the The DIF (droit individuel à la formation) is an individual
workers themselves. right for each employee to seek further training. Under
French law, every employee has the right to up to 20
4.4 Job Code Considerations hours of such training per calendar year.
The job title should be carefully considered – it is
becoming more common to see job titles in English, at The employer must inform its employees each year
least on business cards, but the job title which appears of the number of hours they have accrued under this
on the pay slip should be in French and relate to a individual right to training.
clearly defined status or function, either under statute or
a collective bargaining agreement. The French version If the employee undertakes his/her training during
will tend to be the sole job title referred to, and working hours, the employer must nevertheless continue
relied upon, by the Courts and by the French authorities. to pay him/her his/her normal salary.
Circumspection should be exercised in regard to the
ramifications in terms of trial period, notice period, If the employee undertakes his/her training outside
pension rights, holiday entitlement etc., which flow from working hours, the employer must pay the employee an
a particular job title expression in French. allowance for such training, which corresponds to 50%
French law encourages collective bargaining on job of the net amount of salary. In case of redundancy, the
classifications, mainly by making it compulsory for employee can keep his hours rights to attend a training
industries in which they are used to review such during the notice period, the time of unemployment or
classifications at least every five years. It has long even by his new employer
been the practice to set out these job classifications in
industry-wide collective bargaining agreements, mainly
with a view to fixing minimum wages.
205. Benefits Overview
Even if they are French citizens, all employees are
automatically covered by social security if their
contributions are up to date and if working period
thresholds are satisfied.
5.1 Government Provided Benefits Employers’ participation to contributions is very high:
General information the gross cost for the employer of employing somebody
is between 150% of gross salary and 200% of net
The general scheme was introduced in 1945 in order
salary. In order to drop unemployment, there have been
to cover the whole population. As some categories of
several measures since 1993 focused on reducing labor
wage earners were already covered by a specific scheme
costs, including exempting employers from their social
that they wanted to keep and as some self-employed
security contributions on low-wage jobs or for certain
workers refused to be affiliated, this initiative was firmly
specific target groups, such as elderly workers and
opposed. As a consequence, lots of compulsory scheme
young people. Some would argue that it has simply led
have been created for certain worker group (e.g.,
to a redistribution of jobs among worker categories and
agricultural), resulting in a very complicated web of
age groups.
agencies managing the social security system.
France has a very robust set of benefits for employees.
Expatriates generally have to pay Social Security
The French social security (Securité Sociale) system
contributions, and as a result, they are entitled to
basically consists of insurance plans covering:
benefits. For some expatriates on temporary assignment,
• National Sickness Insurance Fund: Health, death and social security agreements between the country of origin
occupational accident benefits. and France (e.g., EU countries and United States), may
• National Old Age Insurance Fund reduce or eliminate the need for participation in the
• National Family Allowance Fund program.
• Disability
Death benefits
Even if they are French citizens, all employees are The surviving spouse is entitled to a survivor pension,
automatically covered by social security if their if she is at least 55 years old or disabled in case of the
contributions are up to date and if working period death of an insured person and under certain conditions
thresholds are satisfied. Practically this includes both the (depending on resources and children). The survivor
cost of professional services as well as lost wage. pension equals 54% of the current or accrued pension
of the insured person. The minimum for the survivor
The social security scheme is mainly funded by pension is 265.13€ per month. The pension is increased
contributions and taxes deducted from salaries. by 10% if the insured person has had at least 3 children.
Contributions are paid partly by employers and partly
by employees and are estimated on the basis of The lump sum death benefit equals 90 times daily salary.
percentage rates decided at the national level. Two It cannot be under 1% of the social security annual
earmarked withholding taxes are financing the general ceiling nor upper 3 times the social security monthly
scheme: “Contribution Sociale Généralisée (CSG)” and ceiling. For 2010, the minimum is 346.2€ and the
“Contribution pour le Remboursement de la Dette maximum is 8 655 €.
Sociale (CRDS)”.
France Human Capital Global Country Guide 21Disability Benefits benefits (daily allowance) are payable without any
Qualifying conditions qualifying period: From the first day, an allowance
To be entitled to daily allowances, employees under 60 equal to 60% of the last earnings for the first 28 days
years old must have worked at least 800 working hours in the limit of €173.23 per day. This allowance is
during the last twelve calendar months with at least then equal to 80% of the same basis, in the limit of
200 hours during the first 3 month period if the sickness 230.98 € per day.
results in permanent incapacity to work. There are 3
categories of disability: Health Benefits
• 1st category: the insured person is still able to work All insured employees, pensioners and unemployed
but has earnings capacity reduced by at least 66% persons and their dependents are entitled to health
• 2nd category: the insured person is totally unable to benefits.
work and has no earnings capacity
• 3rd category: the insured person is totally unable From January 1, 2005, a new mode of reimbursing
to work and earn a living and needs the assistance medical expenses was introduced by the health reform
of another person to perform ordinary everyday of August 2004. At time of service, the insured person
functions has to pay a part of medical fees (ticket modérateur),
which is reimbursable only for low-income workers.
Benefits
A referent physician must be chosen by all patients
Depending on the category of long-term disability,
under 16 years old. The referent physician will refer
benefits are as follows:
patients to the appropriate doctor or hospital and will
• 1st category of disability: 30% of pensionable salary coordinate the private medical record.
up to the social security annual ceiling, monthly
pension between 265.14 € and 865.50 €. Social security reimbursement can be either a portion or
• 2nd category of disability: 50% of pensionable salary the full amount of medical expenses, based on one of
up to the social security annual ceiling, monthly the following tariffs.
pension between 265.14 € and 1 442.50 €. • The conventional tariff is applied by the vast majority
• 3rd category of disability: 50% of pensionable salary of doctors and is used for medical expenses and
up to the social security annual ceiling, increased by treatment in hospitals under a tariff agreement with
40% for the assistance of a third person. The monthly the social security.
pension is between 1 303.3€ and 2 480.86€. • The non conventional tariff, used for care and
Benefits are paid until age 60 when the disability treatment given by medical staff and certain hospitals
pension is replaced by the old age pension without which have not agreed to follow the social security
reduction. system.
• Because of their professional skills and high
Depending on the category of short-term disability,
reputation, some physicians are allowed to charge
benefits are as follows:
additional fees which are not reimbursed by social
• In the event of short-term disability due to a security.
non-occupational accident the following benefits
(daily allowance) are payable: From the 4th day, an Benefits consist of cash reimbursements for hospital
allowance equal to 50% of the last earnings for the care expenses, doctors' fees, prescribed medicines,
first 31 days in the limit of € 48.08 per day. This etc. The average reimbursement amounts to 80% of
allowance is then equal to 66.66% of the same basis, the expenses incurred for hospitalization, 35%-65% of
in the limit of 64.11 € per day. most pharmaceutical expenses up to 100%, and 70% of
• In the event of short-term disability due to an medical care and dental expenses. In case of serious and
occupational accident (accident du travail / maladie long illness and surgical intervention, reimbursement is
professionelle) including accidents in transit to and 80%.
from work or to a work-related disease, the following
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