CBAs are very often sector-wide agreements, and if they have been extended by ministerial order, these will automatically apply to specific sectors of French industry and commerce whether or not the particular company is a signatory thereto or a member of an employer’s federation.
Can a foreign company send employees on temporary secondment (in French “détachement”) to France?
A foreign employer may of course send its employees on temporary secondment on the French territory provided that there is an employment contract between the foreign employer and the employee and that the employment relationship between the initial company and the employee continues during the secondment period.
The secondment is normally undertaken within the framework of companies of the same group – intra-group mobility; or it can be undertaken within the framework of a contract for the provision of services. In addition, a temporary employment agency based abroad could also send employees on secondment for specific missions.
Pursuant to the provisions of the French Employment Code (in French “code du travail”), during the secondment period, the employee posted to France would be subject to the French statutory provisions applicable to the employees of the French company notably on the following subjects equal treatment, discrimination, protection during maternity leave, working time provisions, rest days, public holidays, minimum salary etc.
In terms of social security provisions, the employee seconded to France remains affiliated to the social security regime of the home country from where he/she originally works.
Furthermore, it is noteworthy that a few compulsory formalities would have be undertaken notably the company will have to make a prior declaration to the local employment authorities (in French “Unité départementale de la DIRECCTE”) where the provision of services will be rendered.
What is the difference between expatriation and secondment under French Law?
Expatriation (in French “expatriation”) is used to describe the position of an employee sent abroad for a relatively long period. In this event, the employee would in principle maintain very little or even no working relations at all with the French employer (the initial employer). The initial employment contract would be deemed to be suspended during the mission abroad and a new contract should be agreed with the host company abroad. Upon expiry of the contract abroad, the employee in principle should be re-deployed in a similar position in the initial French company. In terms of social security, the employee would have to subscribe to social security cover in the country of the host company.
Secondment (in French “détachement”) is used to describe the position of an employee who has agreed to be sent abroad on a temporary mission. In such a case, the employee’s initial
contract is not terminated, and the employee maintains its subordinate relationship with the initial company with a view to return to his/her initial position in France. Thus, the employee remains in the headcount of the French company. He/she continues to be paid by the French company and maintains its social security cover in France.
Should the employment contract be in French Language and should it be in writing?
The written employment contract should be drafted in French Language. When the employee has foreign nationality, the written contract of employment should be translated into the language of the employee upon the latter’s request.
The employment contract does not necessarily have to be in writing except for certain specific contracts such as fixed-term contracts, part-time contracts, temporary contracts (with temporary employment agencies), contracts of employment for casual workers, contracts with home workers etc. That said, it is generally strongly recommended to put in writing the terms of the employment relationship to avoid the difficulties relating to evidence.
Under which form of contract should I hire a person in France?
Taking on staff is a critical phase of the employer/employee relationship under French Law.
The employer is required to take a number of important decisions upon employment which would have an impact on the employment relationship of the parties thereafter.
When employing a person in France, the employer has to decide whether the person should be employed under an open-term contract (in French “contrat à durée indéterminée – CDI”) or under a fixed-term contract (in French “contrat à durée déterminée – CDD”) or under a full-time contract or under a part-time contract.
In addition, French Law now provides for the possibility of agreeing open-term contracts for specific projects (in French “CDI de chantier ou d’opération”). Initially, this was limited to the sector of public works and construction sites but now it should be possible to agree such a contract in wider fields such as IT, banks, the automobile sector provided there is an extended agreement in this respect within the framework of the applicable collective bargaining agreement or within specific sectors where it is of customary practice to have recourse to such a contract notably the building and public works industry.
It should be noted that an open-term agreement constitutes the general norm in France. Any person employed in order to perform the permanent normal activities of a company should, subject to few exceptions, be employed under an open-term contract. Indeed, the circumstances in which a fixed-term contract would be permitted are strictly limited by law.
How are commercial disputes resolved in France?
Commercial disputes, including shareholder disputes, can be resolved through mediation, arbitration or recourse to the court system. The French civil court system includes commercial courts comprised of non-professional judges but with a business background. Certain types of litigation may however be directed to the ordinary civil courts (for example, in regard to intellectual property) The second-tier of the court system are the courts of appeal staffed by professional judges; there is a move towards giving certain courts of appeal sole jurisdiction on certain issues (for example the sudden termination of ongoing commercial relations).
The final tier of the civil system is the Cour de Cassation which only hears appeals on points of law.
Can we get security over assets of a company in France?
There are many forms of security over assets of a company in France. The first question to be asked is to whom do the assets belong? This preliminary question is important as French law pays particular attention to the corporate interest of the legal person providing the security. Why is the security being given and in what way is it in the corporate interest? Should a subsidiary provide security within the framework of a facilities agreement to which the parent and other group companies are parties?
Security can be taken, inter alia, over shares in a French company, or over its goodwill and assets or inventory.
Factoring or assignments of receivables are common in favour of banking or financial institutions.
A contracting party has become insolvent; what can we do?
As a general principle, insolvency law is conducted under the auspices of the local Commercial Court. There are three main types of insolvency protection: the sauvegarde (safeguard) procedure, when a debtor is in serious financial difficulties but not technically insolvent; the recovery procedure (redressement judiciaire) when a debtor is insolvent but the business might be able to financial vialibility; the liquidation proceure (liquidation judiciaire) when there is no hope of recovery.
If a contracting party has an unpaid receivable with the debtor, it will be necessary to register a claim with the insolvency practitioner appointed by the court. Care should be taken as there are strict time-bars for making claims both initially and at later stages when the claim could be subject to challenge.
If a contracting party has an ongoing contract with the debtor, the decision about whether the contract should continue to be performed lies with the insolvency practitioner.
If a contracting party has goods or machines or inventory at the premises of the debtor a specific procedure will need to be followed in order to be able to retake possession of those assets.
How do you terminate a commercial agreement in France?
It is important to take care in terminating a commercial agreement in France. The contract itself needs to be examined and well as the factual background to the envisaged termination. The applicable law and jurisdiction should be identified notably in an international contract.
Commercial agents are given protection and are entitled to compensation on termination of their contracts.
Although in principle it is possible to terminate a sale or distribution agreement without providing grounds, French law has introduced provisions which seek to provide protection against sudden terminations of long-standing commercial relationships.
What types of distribution channels are there in French law?
At the simplest level, distribution can involve a commercial agent or commercial representative who would act on behalf of the principal to promote the sale of goods and services in France (or other markets) or it could involve the appointment of a distributor or reseller in the French or regional market, who would buy and sell the products or software.
Building on that simple basis, the type of distribution network and structure can become more complex (franchise, licencing) but also be set in a more structured and regulated framework with annual negotiations with central purchasing departments of large retail chains.
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