Employment protection plan (PSE)

France
Phase: Management
Тип:
  • Response to COVID-19
  • Fostering mobility
  • Start-up support
  • Support of business transfers
  • Training
  • Working time flexibility
Last modified: 03 August, 2021
Име (на собств. език):

Plan de sauvegarde de l’emploi (PSE)

Име на английски:

Employment protection plan

Coverage/Eligibility

The constitution of an employment protection plan is mandatory in companies with at least 50 employees if the dismissal project concerns at least 10 employees over a period of 30 days (Article L1233-61 of the labour code).

Main characteristics

The purpose of the ‘Plan de Sauvegarde de l'Emploi’ (PSE) is to avoid redundancies or to limit the number of them. It provides a ‘reclassification plan’ to facilitate the redeployment of employees whose redundancy is inevitable, which must include a plan especially designed for older workers (50+) and those with social characteristics making their re-employment more difficult (impaired workers, workers with work-related health issues).

The PSE includes (article L1233-62 of the labour code):

  • actions aimed at the internal redeployment of employees on jobs within the same job class or equivalent to those they hold (or, subject to the express agreement of the employees concerned, on lower category jobs)
  • actions aimed at fostering the transfer of all or part of the existing activities in order to avoid the closure of one or more facilities
  • the creation of new activities by the company
  • actions promoting the outplacement business (including through support to the reactivation of the labour pool)
  • support actions for the creation of new businesses or the take over of existing businesses by employees
  • training actions, validation of acquired experience (VAE) or actions to facilitate internal or external redeployment of employees in equivalent jobs
  • reduction of measures on working time as well as volume reduction measures for overtime performed regularly

Under this general framework, the PSE may provide various measures such as:

  • incentives for voluntary departure, if the PSE includes a voluntary redundancy plan. This kind of plan is not regulated by law: the voluntary redundancy plan allows the employer to limit the number of collective redundancies. Employees may choose to benefit from various possible incentives, such as especially financial bonuses  included in the plan, if they leave the company. In this case, there is a termination by mutual agreement of the employment contract;
  • the establishment of a re-employment unit (cellule de reclassement), for which older workers have a priority access.

In case the employer is to set up an employment protection plan, he can ask, under certain and demanding conditions, for a public financial support to facilitate the redeployment of redundant employees. In 2020, three support measures may be used: degressive temporary allowance agreements (allocation temporaire dégressive), National Employment Fund-training agreements (conventions de FNE-formation), redeployment unit agreements (conventions de cellule de reclassement) but, regarding the latter, only in exceptional cases. Globally, the use of such support measures has been decreasing steadily from 2010, where it was 34,780, compared to 2,560 in 2017.

The PSE has mixed funding sources. Many PSEs are funded entirely by the company proceeding to economic redundancy. In case of liquidation, the government is the main source of funding, the European Globalisation Adjustment Fund in case of eligibility, and other funds can also apply (social security funds, Pôle Emploi, regional funds).

Funding

  • Regional funds
  • National funds
  • European funds
  • European Funds
  • Employer

Involved actors

National government
Ministère du Travail
Regional/local government
Direction régionale des entreprises, de la concurrence, du travail et de l’emploi (DIRECCTE)
Employer or employee organisations
Employer and unions negotiate the PSE

Effectiveness

According to the DARES (2019), in 2017, 570 PSEs were implemented, 55% of which were the result of an agreement between the company and the  trade unions. For several years, the number of PSEs had been decreasing steadily in link with the global decrease of economic dismissals. However, due to the impact of the COVID-19 crisis, a significant rise of collective redundancies and therefore of PSEs is to occur in a near future according to many experts, especially in the automotive, tourism and aeronautics sectors.

No systematic data are available on the content and/or efficiency of the PSEs, which makes its evaluation difficult. Data are held by local DIRECCTEs and are not public, the subject being usually sensitive (PSEs concern large-scale layoffs which are often source of strong social tensions). Because each PSE is unique, comparing their effectiveness is difficult. In addition, PSEs are usually deployed concomitantly with other measures for downsizing the workforce (voluntary departure plans, and when it was possible, pre-retirement plans).

The only nationwide study available (except from monographies or regional studies) on the outcome of the PSEs reports that about 10% of the employees affected are redeployed internally, 46% are re-employed externally one year after the start of the PSE, and 44% remain in job search (Bobbio, 2006). There is no information about age in this study.

A more limited study, published in 2014 (see source below), analysed the answers to a survey made by 201 managers directly in charge of implementing collective redundancies processes about the kind of measures included in employment protection plan and their perceived efficiency. Main points in this study were :

  • support to business creation (78%), additional severance packages (75%), support to geographical mobility (73%) and establishment of redeployment units (69%) are the main measures planned by companies in their employment protection plans.
  • there is a discrepancy between the measures planned in employment protection plans and the perceived usefulness of the latter: for instance, whereas support measures to geographical mobility are often included in PSE, they are not seen as really efficient by companies.  

Strengths

Provides different measures to support employees affected by collective dismissals.

Weaknesses

Generally speaking, it is worth underlining that the number of collective redundancies, and therefore of PSE, has been declining over the last years, meaning that the number of employees covered has declined as well. In the fourth quarter of 2019, 8,200 people fell in unemployment following an economic redundancy, which represented only 1.6% of the people entering unemployment insurance, and 8.9 % less compared to the fourth quarter of 2018. However and again, the impacts of the COVID-19 crisis could reverse this trend in a near future.

The scientific literature considers that PSEs are not very efficient (according to Bruggeman (2005), a re-employment rate of 50% is considered good), but are still useful in the sense that workers laid-off after a PSE have better chances of finding re-employment than workers laid-off on other motives (Bruggeman, 2005; Bruggeman et al, 2004).

Examples

Numerous examples exist. In 2018, the PSE of the ‘Banque de France led to a lot of conflicts and litigations.
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