The new labour law was adopted by parliament in July 2016 after lengthy discussions and much campaigning by the trade unions. Several subsequent decrees implement the law’s main provisions, including important new rules on working time which give precedence to company-level agreements over branch-level ones.
A significant labour law reform which covers working time, social dialogue, redundancy and incapacity, Law no. 2016-1088, was adopted by the French parliament on 21 July 2016 and signed into law by President François Hollande on 8 August 2016 after lengthy discussions and much campaigning by the trade unions. Since then, the government has published several decrees to implement the main provisions of the law, including new rules on working time that came into force on 1 January 2017.
The provisions on working time are important as they establish the precedence of company-level agreements over agreements at branch level. They represent the first steps in an extensive revision of the Labour Code that will also give priority to collective bargaining at company level.
The decrees on the reform of working hours were published in the Official Journal on 19 November so that the new provisions could take effect on 1 January 2017. Decree numbers 2016-1553 and 2016-1551, dated 18 November 2016, implement Article 8 of the law. They restructure working hours’ legislation in three stages.
The principle is to grant precedence to company-level agreements – concluded between the employer and one or more representative trade unions that have received a majority of employees' votes in workplace elections – over industry-level agreements for most of the provisions relating to working hours. The reform thus establishes a decentralisation of collective bargaining.
The role of the law is also changing. Instead of setting minimum standards that can only be improved by sectoral or company-level agreements, the new law contains very few guarantees and confines itself to defining what working time means. It allows exemptions to be introduced by sectoral or company-level agreements.
Although the working week remains at 35 hours (Labour Code, Article L3121-27), the new law contains several measures that offer some flexibility. For example, it is possible to fix an additional payment for overtime hours to exceed the maximum length of the working day (up to a limit of 12 hours) and to reduce the minimum daily rest period.
On overtime, the new regulation stipulates that a company-level agreement or, if there is no such agreement, a branch-level agreement fixes the rate for hours worked beyond the legal maximum. However, this rate cannot be lower than the statutory additional payment of 10% (Labour Code, Article L3121-33). This means that social partners at company level could agree an additional payment of 15% even if the branch-level agreement provides for 20%.
In the absence of any agreement, for overtime worked beyond the weekly statutory period (35 hours) or the duration considered equivalent, employers are entitled to give a 25% additional payment for each of the first eight hours of overtime. Further overtime hours attract a 50% increase (Labour Code, Article L3121-36).
The rules on the conclusion of company-level agreements were also changed on 1 January 2017. To be valid, an agreement on working time, rest periods and leave must be signed by trade unions representing more than 50% of the vote at the last professional elections at company level. In the absence of a majority, minority trade unions may request the organisation of a referendum to approve the agreement (the organisation of the referendum is detailed in Decree no. 2016-1797 of 20 December 2016).
These changes lead, in part, to a reversal of the normal legislative hierarchy. Minimum standards are still fixed by law and neither employment contracts nor collective agreements can provide for any derogations from the law. The main changes concern the collective bargaining system itself. Firstly, company-level agreements prevail over branch-level agreements and can provide for less favourable provisions. Secondly, a referendum can bypass collective bargaining if the social partners fail to reach a majority agreement.
Employer organisations have supported the measures that give more weight to social dialogue at company level. Trade unions, however, have been particularly opposed to the provisions establishing that company agreements on working time take precedence over agreements made at branch level. Some trade unions, including the General Confederation of Labour (CGT) and Workers’ Force (FO), were strongly opposed to the reform. Their main concerns are the reversal of the normal legislative hierarchy on working time issues and the recasting of the framework of the Labour Code. However, more reformist organisations, such as the French Democratic Confederation of Labour (CFDT), felt the law could offer a new guarantee for workers and provide fresh opportunities to improve social democracy.
While CGT believes that only a strong legislation is able to offer enough protection to employees, CFDT states that decentralisation of collective bargaining gives legitimacy to trade union representatives based at the site and that this is more democratic as the process is closer to those employees directly affected by the agreement. CFDT argues that it matters little if the company-level agreement is more or less favourable than the sectoral deal since it is concluded by the employees’ direct representatives.
The reforms also contain a provision designed to secure employees’ career paths by introducing a new scheme: the personal activity account (compte personnel d’activité – CPA). At present, each time an employment contract is terminated, employees lose rights, such as training rights, that could be beneficial when going through a period of unemployment. The CPA aims to bring together in a single account all the rights accruing to the individual, which can then be transferred from one employer to the next and used during a period of unemployment. This scheme will be implemented in 2017.
The working time issues are only one part of the labour law reform, yet they contain the main principles that will guide the recasting of the Labour Code in 2018 if the future president, to be elected in May 2017, does not halt the process.