Newsletter : New French Employment Changes for 2018
2018 will be a busy year given the numerous changes in French employment law, in particular following the publication of the six executive orders « Ordonnances Macron ». Below is a summary of some major changes for the new year.
Modifications relating to dismissal procedures
- Implementation of a mandatory scale of damages
Unfair dismissal damages awarded by a court will now be capped based on a defined scale. This cap varies depending on the seniority of the concerned employee and the size of the company (more or less than 11 employees). The intended objective of this measure is to make employment relationships more predictable and secure.
However, employees will still have the possibility to claim for additional damages (for instance, for non-compliance with working time regulations, variable remuneration, discrimination, harassment, etc.), for which the new cap does not apply.
- Increase of the statutory dismissal indemnity
The statutory legal dismissal indemnity is now equal to 1/4th of the monthly salary per year of seniority for the first 10 years of seniority (compared to 1/5th previously) and the rate is maintained at 1/3rd of a month per year of seniority after 10 years of seniority.
The minimum seniority required to benefit from a statutory dismissal indemnity is now 8 months (compared to 12 months previously).
- Simplification of the dismissal letter
The justifications provided in the dismissal letter can now be specified by the employer, at its own initiative, or at the employee’s request, after the notification of the dismissal. The employee is now entitled to a 15-day period in order to request from the employer additional information regarding the reasons for the dismissal.
A Decree dated 29 December 2017 also provides for a model dismissal letter.
Creation of an Economic and Social Committee (CSE) and new consultation periods
Existing employee representative bodies (Employee Delegates, Works Council and Health and Safety Committee) will be merged into an Economic and Social Committee (CSE). All companies or "UES" (social and economic units) will be required to implement a CSE once they employ at least 11 employees during a consecutive 12-month period. The role and attributions of the CSE will depend on the size of the company. The new legal requirements will enter into force gradually, depending on the dates of renewal of the current employee representative bodies, and at the latest by 1 January 2020.
In addition, the current set consultation timeframes in the absence of an agreement and in certain consultation cases for which French law does not provide for any specific timeframe (one month in the general case, two months in case of involvement of an expert, three months if there is one or more Health and Safety Committees, or four months if there is a coordination Health and Safety Committee) will be as follows for the CSE:
- one month in the general case,
- two months in case of involvement of an expert
- three months in case of involvement of several experts (central and establishment CSEs).
New rules with respect to teleworking
Teleworking must now be implemented through an in-house collective agreement or in the absence of same through a policy issued by the employer after consultation with the CSE as the case may be. It is no longer necessary to include teleworking provisions in the employment agreement or an addendum. However, the in-house collective agreement or the policy must provide for certain mandatory provisions (e.g., the conditions to be met in order to telework, the conditions in order to cease teleworking, etc.).
Occasional teleworking, in the absence of an in-house collective agreement or policy, can be implemented by agreement between the employer and the employee.
In addition, the employer cannot refuse a request of teleworking from an employee, unless the reasons for this refusal are objective and of course non discriminatory.
Moreover, it is recommended, in case of teleworking, to continue to pay a financial compensation to the employee for the specific hardship and professional expenses linked to work at home.
New pay slip requirements
A simplified and electronic pay slip : the simplified pay slip will definitively enter into force in all companies as from 1 January 2018. Certain lines are removed and contributions will now be grouped together by risk. However, many indications remain mandatory on the pay slip, such as the reference to the applicable working time, collective bargaining agreement and the employee’s classification.
In addition, as from 1 January 2018, the electronic pay slip is now the principle and hard copies should only be an exception (for instance, if the employee requests same).
Increase of the CSG : As from 1 January 2018, the amount of the CSG (supplementary social security contribution) will increase by 1.7%. This measure should however be compensated by the gradual elimination of the employee portion of unemployment and sickness contributions. Consequently, the net salaries of employees should be slightly increased or even remain stable.
New «Sapin II» compliance requirements
Since 1 January 2018, companies with more than 50 employees in France must implement a specific whistleblowing reporting process. For more information : Download our 10-point action plan
Number of the month
This is the estimated increase of French annual economic growth for 2017 according to recent statistics from the INSEE (French National Institute for Statistics and Economic Research). This growth would be the most significant growth since 2011. The INSEE estimated a “steady" growth in France with an increase by 0.6% of the GDP at the end of 2017, and unemployment should decrease in France to an expected 9.4% by mid 2018.