Sources of regulation
The French Labour Code, which was completely recast in
1973 and has been amended since, and art. 34 of the Constitution,
which establishes the rules and fundamental principles of labour law, are
the main sources of legislation on employment.
The Labour Code (LC) is divided into nine Books, each of
which is comprised of three Parts: laws (L), regulations (issued by the
Council of State) (R) and decrees (D).
Scope of legislation
Book I, Title 2; and Book 3, Title 2, Chapter I, of the
LC deal with contracts of employment and dismissal for economic reasons,
respectively, and apply to termination of contracts of employment by the
employer.
Contracts of employment
A contract of employment is made in writing and must be
drawn up in French. It may be concluded without specifying a definite duration
(contract for an unspecified period). However, it may include a precise
duration fixed at the time the contract is made (sec. L.121-5, LC).
A fixed-term contract may be made only for the performance
of a specified and temporary job. The instances for which it may be concluded
are listed in secs. L.122-1-1 and L.122-2 of the LC. The total duration
of this type of contract may not exceed 18 months generally, and nine months
while waiting for an employee recruited on a contract for an unspecified
period to take up his or her post. The minimum period may be extended to
24 months if the job is performed by a foreigner (sec. L.122-1-2 II,
LC). This type of contract may be renewed only once, and its maximum duration
may not exceed 24 months. If the contractual relationship continues after
the expiry of the contract, the contract becomes a contract for an unspecified
period (sec. L.122-3-10, LC).
A fixed-term contract of employment may contain a probationary
period the duration of which is calculated on the basis of one day for
each week that the fixed-term contract will exist.
Termination of employment
The contract of employment can terminate, not at the initiative
of the employer, in certain circumstances, including by:
- the expiry of a fixed-term contract (sec. L.122-3-5, LC);
- force majeure; and
- the completion of the specific job for which the employee was employed.
Dismissal
The LC states that all dismissals should be based on well-founded
and valid grounds (sec. L.122-14-3). In the absence of agreement
between the parties, a contract of employment may be terminated by the
employer only on account of serious misconduct or in the case of force
majeure (sec. L.122-3-8, LC).
A contract of employment for an unspecified period may
be terminated by either of the parties. The termination by an employer
should be justified by a genuine and serious reason.
Any termination carried out by an employer for one or more
reasons not inherent in the personality of the employee resulting from
the elimination or transformation of the job or a substantial modification
of the contract of employment, especially after economic hardships or technological
changes, constitutes a dismissal for economic reasons (sec. L.321-1,
LC[1] ).
No employer may terminate the contract of a woman who has
been medically certified as pregnant; nor may her employment be terminated
during a period of leave to which she is entitled (whether or not she takes
it), or within four weeks of the expiration of the leave period.
In addition, an employer may not terminate the employment
of a worker whose contract has been suspended because of an employment
injury or occupational disease, unless the employer can show that the employee
has engaged in serious misconduct or that it is impossible, for reasons
unrelated to the injury or illness, for the contract to continue in force.
Termination of the employment of a trade union delegate,
an employee representative and persons of similar status can only occur
after authorization by the labour inspectorate.
Sec. L.122-45 of the LC states that no dismissal may be founded on discrimination
based upon origin, sex, family status, race, nationality, political opinion,
trade union activities, religion, disability, or exercise of the right
to strike or health. Any such dismissal is considered null and void.
Notice and prior procedural safeguards
An employer who proposes to dismiss an employee must, before
making a decision, summon
the person concerned, stating the purpose of the summons. Employees may
be accompanied at the interview by an advisor of their choice. During the
interview, the employer must give the reasons for the proposed decision
and hear the employee’s explanations (sec. L.122-14, LC[2] ).
The decision to carry out the dismissal must be transmitted
by registered letter (sec. L.122-14-1, LC[3] ) and the employer must specify therein the reason or reasons for
the dismissal (sec. L.122-14-2, LC).
The termination of a contract for an unspecified period
is subject to a notice period except in the case of serious fault (sec.
L.122-6, LC). The notice period is:
- one
month, if the employee has worked for between six months and two years;
and
- two
months after two years’ service.
If the length of service is less than six months, the notice
period applied will be governed by local custom and the practice in the
occupation. Collective agreements may contain
provisions more favourable to workers in this regard.
An employer who proposes to dismiss workers on economic
grounds must summon and consult the works committee or staff delegates
and inform the competent authority of the proposed dismissals (sec.
L.321-2, LC). The employer should indicate to the staff representatives
the economic, financial or technical reasons for the dismissals, the number
of workers concerned, the categories of workers affected, the proposed
criteria for the order of dismissals, the number of workers employed in
the establishment and the provisional timetable for the dismissals (sec.
L.321-4, LC). The works committee or, in its absence, the staff delegates
must be summoned for consultation twice. The interval at which these two
meetings are held varies depending on the number of employees affected
(sec. L.321-3, LC).
After consultation with the works committee or staff delegates,
the employer defines the criteria for setting the order of dismissals.
These criteria must take into account family responsibilities, particularly
in the case of single parents; length of service in the establishment;
the situation of employees whose re-entry into the labour market is difficult
(disabled persons or elderly employees) as well as skills (sec. L.321-1-1,
LC).
After notifying the competent administrative authority
of the proposed dismissals, the notice period for sending the letters of
dismissal is as follows (sec. L.321-6, LC):
- at
least 30 days if the number of dismissals is less than 100;
- 45
days if the number of dismissals is equal to 100 and less than 250; and
- 60
days if the number of dismissals is at least 250.
Severance pay
When an employment relationship does not continue at the
end of a fixed-term contract, the employee is entitled to a severance allowance
(sec. L.122-3-4, LC). This allowance is calculated according to
the remuneration of the employee and the duration of the contract, but
it may not be lower than a minimum fixed by decree. It is not payable in
the event of premature termination at the initiative of the employee, serious
misconduct on the part of the employee or in cases of force majeure.
An employee who is bound by a contract of employment for
an unspecified period and is dismissed after two years’ continuous service
with the same employer is entitled, except where he or she is guilty of
serious misconduct, to minimum severance pay (sec. L.122-9, LC).
The amount and the methods of calculating such pay are to be fixed in the
corresponding regulations. The statutory minima are often improved by collective
or individual agreement. The formula for calculating statutory severance
pay is based on 20 hours of pay for wage earners or 10 per cent of monthly
wages for salaried staff, multiplied by the years of service accrued up
to a maximum of ten. For each year of service beyond ten, one-fifteenth
of a month’s pay is added.
There is some evidence that negotiated terminations accompanied
by agreed severance pay are becoming more common in France, although such
agreements are subject to review by the courts, if challenged.
Avenues for redress
Where legal action is taken, it is up to the judge to decide
whether the correct procedure has been observed and whether the reasons
given by the employer are well-founded and valid (sec. L.122-14-3,
LC).
In the event of the termination of a fixed-term contract
before the expiry of the term for reasons other than serious misconduct
or force majeure, the employee is entitled to damages corresponding
to the remuneration which the employee would have received up to the end
of the agreed term of the contract (sec. L.122-3-8, LC).
If the employer fails to observe the notice period, the
employee is entitled to compensation in lieu of notice, except in the case
of serious fault on the part of the employee (sec. L.122-8, LC).
Where an employee is dismissed without the correct procedure
being observed, but on well-founded and valid grounds, the court will order
the employer to comply with the prescribed procedures and award the employee
compensation which must not exceed one month’s wages. If the grounds for
the dismissal are not well-founded and valid, the court may propose the
reinstatement of the employee in the undertaking. If either of the parties
rejects such a proposal, the court will award compensation to the employee
not less than the remuneration that the employee received during the six
months immediately preceding his or her dismissal (sec. L.122-14-4,
LC[4] ).
Further information
[1] Amended by Act No. 92-722 of 29 July
1992.
[2] Amended by Act No. 91-72 of 18 Jan. 1991.
[3] Amended by Act No. 95-116 of 4 Feb. 1995.
[4] Amended by Act No. 92-1446 of 31 Dec.
1992.
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