France: Controversial French Employment Bill Passes Parliament, Faces Constitutional Review

This complete global solution for HR professionals combines custom research, strategic white papers, country primers, webinars, and the expert guidance you’ve come to expect from...

By Rick Mitchell

July 29—The French government pushed through a controversial employment reform at high political cost in an effort to shrink France’s high jobless rate, but the legislation now faces three constitutional challenges.

Adopted June 21, the Law on Work, Modernization of Labor Relations and Securing of Career Paths includes various measures—including making it easier for companies to increase working hours above the current 35-hour weekly limit and to lay off employees in certain cases—to persuade companies to increase hiring. Other provisions include a “right to disconnect” limiting the off-work time an employee is expected to respond to e-mails and other electronic communications.

With the jobless rate stuck at around 10 percent since the economic crisis, French business leaders have justified their reluctance to hire by contending the country’s famous labor protections make it too complicated to lay off or fire employees in economically tough times.

Better known as “La Loi Khomri,” because Labor Minister Myriam El Khomri proposed it in Parliament, the legislation has provoked public outrage over the government’s use of a constitutional mechanism to force the unpopular bill through Parliament’s lower house without a vote.

Make Layoffs Easier

The bill clarifies the definition of “layoffs for economic reasons” and includes justifications for layoffs the country’s supreme court, or Cour de Cassation, has set out in rulings, including going out of business and restructuring to maintain competitiveness. Situations that can justify economic layoffs include a decline in orders or sales, operating losses and a significant decline in cash. The government's intention is to increase legal security for companies—particularly small and medium-sized employers that don’t have access to legal advice—to encourage them to increase hiring.

The bill also includes a provision requiring that for labor agreements to take effect they must be signed by unions that represent at least 50 percent of employees at company level. If the union represents at least 30 percent of employees, it can consult employees directly to get approval for a given agreement.

Working Hours

The legislation leaves the 35-hour legal full-time workweek established in 2000 in place but increases employer flexibility to arrange longer working hours in certain cases. Employees could work as many as 46 hours for a maximum 12 weeks of the year, for example, if employers obtain agreements with unions at company level. Currently, employers must get union approval at sector or national level. The maximum workday remains 10 hours and can be temporarily extended to 12 hours with work inspector approval or through union agreement.

The Right to Disconnect

The bill also includes measures addressing the internet’s impact on work, in particular establishing a “right to disconnect” that requires companies with more than 50 employees to put in place rules limiting when employees can be contacted via e-mail or other digital means during nonworking hours. Employers would be required to negotiate with unions annually to set the actual terms for implementation of this general policy or, failing that, to establish a charter setting out their own commitments.

In addition, the legislation calls for national employer groups, labor unions and interprofessional associations to begin negotiating by Oct. 1, 2016, the establishment of a framework for telecommuting from home via the internet, which would examine the workload of telecommuters and help improve understanding of how this kind of work affects employees.

Securing Social Benefits

Effective Jan. 1, 2017, the bill creates lifetime “personal activity accounts” for employees and job seekers under which they accumulate points throughout their careers even if they change jobs often in the modern economy. The points will be used in the calculation of social and other benefits. The accounts will apply to independent workers beginning Jan. 1, 2018.

Constitutional End Run

The Socialist government has largely failed in its efforts to sell the Khomri Law to the public, and its use of a constitutional mechanism (called the “49-3”) three times to push versions of the text through the National Assembly without a vote—because it feared rejection by its own party members—triggered months of street protests and two no-confidence measures in Parliament, neither of which passed.

For its part, the business community has complained that the text of the law was watered down from earlier versions and doesn’t go far enough in easing job market regulation.

The Senate voted July 19 to reject a measure to adopt the bill, but the government used the 49-3 mechanism a third time to force it through the National Assembly July 21, which allowed it to declare the law legally adopted. Nonetheless, the legislation remains in limbo, as three different political groups have filed challenges to it on various grounds, and the Constitutional Council, which has the power to strike down all or parts of passed legislation, has 30 days to rule.

To contact the reporter on this story: Rick Mitchell in Paris at correspondents@bna.com

To contact the editor on this story: Rick Vollmar at rvollmar@bna.com

For More Information

Text of the Law on Work, Modernization of Labor Relations and Securing of Career Paths is available here, the government’s web page explaining the law’s main measures here, both in French.

For more information on French HR law and regulation, see the France primer.

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.