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Latest News

Latest News

A time of uncertainty concerning the application of the scale of compensation (“barème Macron”) for unfair dismissal introduced in the recent French employment reforms

The first decisions delivered by the French employment tribunals on the question of the compliance of the scale with international conventions have now been reported. The cases result in diverging positions which can only lead to legal uncertainty for employers.

The legal framework

In order to provide certainty on termination of the contract of employment, one of the measures provided for by the so-called Macron orders in September 2017 was to put in place a compulsory scale of compensation by the employer in the event of a finding of unfair dismissal or, in French terminology, a dismissal without real and serious grounds. The scale of compensation sets out minimum and maximum amounts in months of salary that vary according to the length of service of the employee and the number of employees within the company; the maximum would be 20 months’ salary for employees having at least 30 years’ length of service.

Protection of trade secrets

French law has adopted a new law on the protection of trade secrets (law n° 2018-670 of 30 July 2018)

The law is intended to transpose EU directive 2016/943 of 8 June 2016 on the protection of trade secrets into domestic law.

Under the definition set out in the French provisions, any type of information could be protected by trade secrecy. A trade secret is defined by reference to three criteria: the information is not generally known or easily accessible by persons familiar with this type of information because of their sectors of activity; it has an effective or potential commercial value because of its confidential nature; the holder of the information has taken legitimate and reasonable steps to protect its secret nature. The type of information protected is broad: for example, technological knowledge, know-how, and commercial data. It seems to exclude personal data, unless such data has a commercial value. The media upon which the information is carried can be of any type whatsoever.

A look in the corner of restitution

There is a small corner of the French law of obligations regarding quasi contracts, unjust enrichment and restitution which has been the subject of reform of the law of obligations in 2016 and to which little attention has been paid.

Under the heading “Other sources of obligations”, quasi contracts have seen their status raised within the structure of the civil code so that they now appear on the same level as contracts and the French law of tort.

Gilets jaunes : an exceptional bonus

The bill on urgent economic and social measures following the announcements made by the French President on 10 December 2018 in response to the protests by the “yellow vests” (in French “gilets jaunes”) has already been adopted and published on 26 December such that the measures can apply as from 1 January 2019.

The main provision is the possibility for employers to pay their employees an exceptional bonus (“prime exceptionnelle de pouvoir d’achat”] which is tax-free and not subject to social charges and contributions.

What is the statutory time-bar (in French “prescription”) to bring a matter before the French employment court?

In the event of termination of the contract (any claims relating to damages for unfair dismissal, damages for noncompliance with the procedure, damages for loss suffered), the time-bar period is of twelve months and starts from the notification of the termination.

That said, there are exceptions notably in the event of discrimination or harassment or dispute of the final statement of sums due.

Furthermore, any action in regard to payment of salary is subject to a three-year time-bar.

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How are salary levels determined in France?

The minimum salary is compulsorily set out by the applicable collective bargaining agreement. It would depend on the status and classification of the employees.

In the absence of an applicable collective bargaining agreement, there exists a minimum salary set out by the French statutory code (in French “SMIC”).

That said, the collective bargaining agreement would normally set out a more favorable minimum salary for each level of employee.

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How are paid holidays and public holidays calculated and taken in France?

Employees are entitled to circa 2.5 working days as holiday pay per month (i.e. 30 working days per year which corresponds to five weeks). Moreover, employees normally have 11 days corresponding to public holidays set out by the employment code over and above their entitlement in terms of paid holidays, depending on whether or not the public holiday falls on a working day. The paid holidays would be taken within a reference year running from 1 June to 31 May the following year.

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What are the working time rules in France and what is the most flexible method which could apply?

The standard working week is 35 hours and any hour worked over and above 35 hours would normally constitute overtime and paid at an increased rate. Alternatively, rest days (RTT) should be given in lieu in accordance with the provisions set out by the applicable collective bargaining agreement.

That said, the recent changes in Employment Law (which tend to extend the scope of collective negotiations) allow the employer to provide for more flexible provisions such as annualised working time in terms of days (in French “forfait jours”).

Thus, it would be important to verify the provisions of the applicable collective bargaining agreement or in the event that there are no provisions in the CBA in this respect, the employer could agree to a company-wide agreement which can now be implemented even with only one employee in the company.

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What is the minimum compensation to be paid to employees upon termination?

All depends on the form of termination i.e. whether it is a resignation, a dismissal/redundancy, a dismissal for serious or gross misconduct, or a mutual termination agreement.

In general, the applicable collective bargaining agreement would set out for more favorable provisions in regard to severance payment.

Pursuant to the French Employment Code, the minimum compensation for dismissal should be paid to any employee who has accrued eight months’ service within the company and amounts to ¼ of a month’s salary per year of service until 10 years of service and 1/3 of a month’s salary from 10 years of service.

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