France: Law encourages employees to have a stake in their company
A new law in France aims to encourage employees to take ownership of the company they work for.
Law No. 2014-856 of 31 July 2014 relating to the social and solidarity-based economy is intended to encourage ownership of small and medium-sized enterprises (SMEs) by their employees. It reinforces the sanctions envisaged by the so-called ‘Florange law’ by authorising the Labour Inspectorate to reject an employment protection plan if an employer (with at least 1,000 employees) has failed to comply with their obligation to find a new owner.
The law also creates an obligation on owners to inform employees if a stake representing more than 50% of the shares in a company is being sold – otherwise the sale will be rendered invalid. The aim is to allow the workforce to submit their own bid to buy the company.