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France: “EL KHOMRI LAW” - A Summary of Key Regulations

29 November 2016

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Law n°2016-1088 of August 8, 2016 relating to labour, modernization of social dialogue and securing of professional careers.

On August 8, 2016, after several months of important debate and public opposition, the President of the French Republic promulgated the Law n°2016-1088 relating to labour, modernization of social dialogue and securing of professional careers - the so-called “EL KHOMRI Law”.

At the outset, the EL KHOMRI bill, proposed by Myriam El Khomri, the Minister of Labour, was very controversial because it aimed at reforming the French Labour Code, by softening a number of legal provisions and favouring collective bargaining. This bill also provided new rules relating to the duration of work, extra hours, in-house referendum, layoff benefits, redundancy dismissal etc. Of all the provisions, Article 2 was the most disputed.

After several modifications, the bill was adopted and promulgated on August 8, 2016.

Some of the main new regulations can be summarized as follows:

1. The duration of work
The EL KHOMRI Law aims at softening the legal upper limit of weekly work.

The legal duration of work remains 35 weekly hours, but this new regulation will allow employees to reach 44 weekly hours, and even 46 weekly hours within a period of twelve weeks, should this increase be prescribed in a company-level agreement. (Before the EL KHOMRI Law came into force, only industry-wide agreements could allow such raise).

From now on, it will be possible to raise the weekly upper limit to 60 hours, should “exceptional circumstances” justify this. However, this increase shall only be temporary.

Moreover, the Law allows the daily legal limit (10 hours) to be increased up to 12 hours when decided by a collective company-level agreement.

As regards extra-hours, they would be increased by 25% for the 8 first hours and by 50% for the remaining hours. However, a collective company-level agreement will be able to reduce this percentage to 10%.

2. Collective bargaining
Firstly, the role of collective company-level agreement is reinforced. According to the French Ministry of Labour, “the majority agreements should gradually become the rule at the company level”.

In order to be valid, a collective company-level agreement must be signed by both the employer (or his representative) and one or several unions of workers representing 50% of the votes cast. Should no agreement be reached, a union of workers representing 30% of the employees would be entitled to ask for consultation of the employees, within a delay of one month. Such a consultation would allow the employees to deliver their opinion of their working conditions and choices that directly concern them.

The agreement is valid if approved by employees in the majority of the votes cast.

However, the Law also reinforces the role of industry-wide agreements, especially to regulate competition between companies and strike against “social dumping” and for some of them, there will be no possible derogation.

3. Economic redundancy
The EL KHOMRI Law clarifies the legal definition of economic redundancy and includes the motives sustained by the French Supreme Court (“Cour de cassation”), namely: business activity termination and reorganization of the company to protect its competitiveness.

Moreover, the difficulties which may legally justify an economic redundancy are specified, again in consideration of the French Supreme Court decisions. Those difficulties include: a decrease in orders or sales, operating losses, a significant financial deterioration etc.

According to the French Ministry of Labour, these new regulations are especially designed to protect small and medium-sized enterprises that may not have legal counsel of human resources, by making the criteria available for whether the economic redundancy is legally justified or not.

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Many new regulations came into force on August 9, 2016 but 127 of them need to be formalized by means of a presidential decree. According to the French Ministry of Labour previsions, the majority of these regulations will be enforced by the end of 2016 and the remainder in January 2017.

For more information contact Xavier Lebrasseur at Moureu Associés - Avocats à la Cour.

Moureu Associés - Avocats à la Cour
17 rue Margueritte
PARIS 75017
France

e: xlebrasseur@moureu-avocats.fr | www.moureu-avocats.fr

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