FRANCE: An Introduction

FRANCE: An Introduction to Employment by Fromont Briens

2022 has been a very tumultuous year that results today in what might be one of the most uncertain and fragile economic, social, and political contexts we have seen for many years across Europe and the world.

Waking up from almost two years of stop-and-go on the back of the Covid crisis, our road to economic recovery – although with massive amounts of debt - has been smashed, as soon as February, by the war in Ukraine, triggering a global domino effect of geopolitical tensions, rising energy prices, inflation, and the subsequent rise in central banks’ interest rates.

In a macroeconomic environment not very prone to ambitious development plans, companies tended to put a hold on their investments to prepare for the hard times ahead, with a major impact on the employment market.

Already shaken by the aftermath of the Covid crisis which saw our whole relationship to work be questioned, the emergence of hybrid/full remote work schemes widely implemented, ongoing talent shortages, changing work preferences, a strengthened emphasis on diversity and inclusion issues as well as the ever-increasing focus on ESG-related issues in assessing companies’– and employers’– performances, the employment market has become an increasingly complex environment to navigate for companies trying to attract, and retain, the best talents.

The above detailed context, in both its macro and micro dimensions, is happening on a global scale and sets the basis for understanding today’s French employment market.

From a protection to the other 

The French socioeconomic model has been put to the test during the Covid crisis, where Emmanuel Macron’s government unlocked massive support programmes to keep the economy afloat and prepare for the post-crisis recovery.

The interruption of this recovery by the war in Ukraine has forced the French government of a newly re-elected Emmanuel Macron to strengthen its focus on the protection of the economy and its actors, namely the companies and the people, through a series of measures addressing the rise in inflation, the needs for a strengthened protection of whistle-blowers, the continued fight against gender inequality and the stronger focus on occupational health and safety issues.

Newly introduced measures against inflation 

On 16 August 2022 a new law offered current or former employees the possibility of unblocking on an exceptional basis profit-sharing rights and sums, in the limit of EUR10,000 per beneficiary, allocated under the incentive scheme, which were previously blocked for five years.

In addition, the tax treatment of the value-sharing bonus known as "Prime Macron”, an optional scheme aiming to encourage employers to pay an additional annual bonus to their employees, is modified: the ceiling of exemption from social security contributions is raised from EUR3,000 to EUR6,000 in certain cases, such as the implementation of a profit-sharing scheme, and the bonus is totally exempted from income tax for employees earning up to three times the minimum wage.

On 1 October 2022 a new legislation relating to the protection of purchasing power introduced a fixed deduction of employer’s contributions on overtime payment for companies with at least 20 employees and less than 250 employees. Published on the same day, the Amending Finance Act for 2022 raises the income tax exemption ceiling for overtime and complementary hours.

Better protection for whistle-blowers 

A new law introduced on 21 March 2022 provides a new definition of whistle-blowers and strengthens the protection system in place. Whistle-blowers are defined as individuals who report or disclose information relating to a violation of law, without direct financial compensation, and in good faith. He or she may report a violation or an attempt to conceal a violation of law. The condition of “serious and manifest” violation of law, in place until now, is removed. In the professional context, a whistle-blower can now report facts of which he has only indirect knowledge.

For whistle-blowers who have the status of employee, it is no longer required to report to the employer or its representatives. They may choose to report externally, especially to the Human Rights Defender, the judicial authority or a competent authority designated by decree. Whistle-blowers are not liable for damages caused by the disclosure of a report, as long as they have reasonable grounds to believe that the disclosure is necessary to protect the interests at stake. In criminal matters, the law broadens the scope of protection of whistle-blowers, especially concerning the confidentiality of the documents obtained.

The continuing fight for gender equality 

Every year, companies with at least 50 employees must calculate and publish on their website the results obtained for each indicator relating to gender pay gaps. The “Rixain” law dated 24 December 2021 and its implementation decree reinforces the constraints on companies with a score below 75/100. These companies must publish the corrective and remedial “measures” implemented either by agreement or unilateral decision on the same internet page as the results obtained. When the score obtained is less than 85/100, then the employer must publish the progress targets defined by the agreement or the unilateral decision for the indicators for which it has not achieved the maximum score.

The corrective measures envisaged or already implemented, the targets for the improvement of each of the indicators, as well as the methods of publication, must be transmitted to the services of the French Minister of Labour. This information is also made available to the social and economic committee in the economic, social, and environmental database (BDESE).

In companies with at least 1,000 employees, the law dated 24 December 2021 sets out new obligations in terms of the representation of women and men in management positions. The new system will be implemented in successive steps.

As of 1 March 2022, employers falling in the scope of the legislation must publish every year the existing gaps, if any, in the representation of women and men among senior executives and members of management bodies. These gaps will be made public on the website of the Ministry of Labour as of 1 March 2023. As of 1 March 2026, the proportion of persons of each sex among senior executives and members of management bodies may not be less than 30%. Companies that do not meet this quota will have to publish improvement targets and the corrective measures adopted. As of 1 March 2028, failure to meet this quota may result in a financial penalty being imposed by the authorities. Finally, as of 1 March 2029, this minimum proportion of persons of each sex will be increased to 40%.

Stronger focus on occupational health and safety prevention

The Occupational Health Act entered into force on 31 March 2022 and provides a larger and deeper scheme for preventing health and safety issues in the workplace through the introduction of a new definition of sexual harassment in the Labour Code, the strengthening of employee health monitoring and prevention within companies, and the increase in the duration of training for elected staff representatives on those issues.

The definition of sexual harassment in the French Labour Code is expanded to encompass gender-offending, sexual or sexist speech and behaviour. They could come from several people, whether in a concerted way or at the instigation of one of them, even though each of them did not act in a repeated manner, as well as to all those speeches or behaviours that, coming from several people in a non-concerted way, are known to be repetitive by those same people. No such thing as an intentional element is needed to constitute sexual harassment, which occurs as soon as it is suffered by the employee.

On monitoring workers' health, the new law introduces the possibility to organise remote medical visits upon agreement of the employee and the guarantee that the device and technology used respect the confidentiality of the exchanges. A mid-career visit on the employee’s 45th birthday is introduced in order to detect the risk of professional disintegration, and a binding appointment in the presence of the occupational health and prevention service of the company is offered to any employee concerned by a work stoppage exceeding 30 days to inform the employee that he can benefit from measures to prevent job disintegration, a pre-resumption examination as well as individual measures for the organisation, adaptation or transformation of the workstation. A unit dedicated to the prevention of professional disintegration must be created by the Occupational Health and Prevention Services of the company to offer collective and individual preventative measures aiming at improving working conditions and avoiding incapacity. The Company Vocational Rehabilitation Convention, strictly reserved to disabled workers so far, now also concerns employees deemed unfit or at risk by an occupational physician, opening a right to be trained for a maximum duration of 18 months to another job within their company or another while maintaining their work contract and remuneration untouched.

From 31 March 2022 the development of the Single Occupational Risk Assessment Document (DUERP) is no longer the exclusive competence of the employer but must be established in collaboration with occupational health referees, preventative and occupational health services and members of the Social and Economic Committee (CSE). It must be kept for 40 years.

From 1 April 2022 the Occupational Health Services (SST) became the Occupational Health and Prevention Services (SPST) with extended missions ranging from the assessment and prevention of occupational risks, the implementation of health promotion measures in the workplace, vaccination and screening campaigns, advice on remote work conditions. A decree issued on 26 April 2022 states that each occupational health and prevention service must include the prevention of occupational risks, individual monitoring of the health status of each employee throughout their activity, and the prevention of professional disintegration through the creation of an operational unit aiming at assisting employees at risk of leaving employment because of health issues.

From 1 October 2022 the prevention passport entered into force. It must include all the trainings, certificates and diplomas obtained by each employee in relation to occupational health and safety training.

The way ahead 

The two main reforms that are now making the social agenda in France are the unemployment compensation reform and the pensions reform.

The unemployment compensation reform was announced on 21 November 2022 and aims at tackling the current workforce shortages experienced by a series of sectors in the French employment market.

The reform, which will enter into force on 1 February 2023, introduces a new mechanism that establishes a 25% decrease in the maximum duration of compensation when the unemployment rate is below 9% or its quarterly evolution is below +0.8, with a six-month guaranteed compensation period and a potential bonus at the end of the compensation period if the conditions on the employment market have worsened.

Besides, the reform also construes it as a resignation when employees neglect their job and force their employer to dismiss them. This illegitimate resignation makes the employees ineligible for the unemployment benefits.

Regarding the pensions reform, the French government opened three rounds of negotiation with social partners, each of which is dedicated to a specific issue: senior employment, equality and social justice, and a pensions scheme financial balance with the objective of obtaining a final draft law for “the end of winter 2022/2023”. On the agenda of Emmanuel Macron’s government since he was first elected President in 2017, it will still be one of the major reforms conducted under his second term.

In parallel, the current term of staff representative bodies is coming to an end, which will lead to new election processes and a potential reshaping of unions' powers.

The great shift in work organisation models brought by the generalisation of the practice of remote work will also continue to produce it effects. The stakes entailed are high because flex work raises new challenges about every aspect of the employment relationship: working time, equality of treatment, work/life balance and right to disconnect, professional inclusion, etc.