Overview of the main provisions of the law likely to be of interest to very small and small businesses with fewer than 50 employees.
Social Newsletter No. 1.
Law No. 2013-504 of June 14, 2013, on securing employment, constitutes the main labor law reform of 2013. Stemming from the national interprofessional agreement concluded between social partners on January 11, 2013, it creates new obligations for employers. Selection of measures likely to concern companies with fewer than 50 employees.
Job retention agreements
These agreements can be concluded at the company level when the company is experiencing serious economic difficulties. The framework for these agreements is defined in Articles L 5125-1 to L 5125-7 of the French Labor Code.
The agreement is negotiated with:
– the union representatives from representative organizations within the company that received more than 50% of the votes in the last employee representative elections
– or, failing that, by the elected employee representatives mandated by a representative trade union
– or, failing that, by an employee expressly mandated for this purpose by a representative trade union.
In these last two cases, the agreement must be approved by a majority of employees.
The agreement, with a duration of two years, may provide for adjustments regarding working hours, work and compensation . On this last point, the threshold is set at 1.2 times the minimum wage (SMIC): the compensation of employees whose salary is below this amount on the date of the agreement cannot be affected.
Partial activity
Article 16 of the law establishes a single partial activity scheme to replace the various pre-existing partial unemployment schemes (Articles L 5122-1 et seq. of the French Labor Code).
While the conditions for resorting to partial activity remain the same, employee compensation is paid by the employer on the basis of an hourly allowance, the hourly rate of which is set at €7.74 for companies with 1 to 250 employees (Article D 5122-13 of the French Labor Code).
The scheme came into effect with the publication of the decree specifying its implementing procedures (Decree No. 2013-551 of June 26, 2013, relating to partial activity).
Supplementary health and life insurance coverage
Employers must implement a minimum supplementary health This plan must be available to all employees (Article 1 of the Law).
At least half of the cost of this mandatory plan must be covered by the employer (Article L 911-7 of the Social Security Code).
disability insurance must also be established within the company . This covers the risks of incapacity for work, disability, and death. The implementation of this supplementary plan may be delayed compared to the health insurance plan, as the only legal obligation is for social partners to open negotiations at the industry level on this subject before January 1, 2016 (Article 1 of the Law).
Some adjustments have also been made to the portability of health and life and disability insurance benefits for the unemployed (Article 1 of the Law).
Part-time work
The law now sets a minimum of 24 hours per week for part-time work (Articles L 3123-14-1 et seq. of the French Labor Code). Exceptions are possible, either at the employee's request or if a sectoral agreement provides for it.
This new requirement came into effect on January 1, 2014. Part-time contracts signed from this date onward must therefore
comply with this minimum duration. For existing contracts, a transitional period until January 1, 2016, is in place.
The compensation for overtime hours is also changing. Specifically:
– overtime hours not exceeding one-tenth of the working hours stipulated in the contract will be subject to a 10% increase, effective January 1, 2014 (Article L 3123-17 of the French Labor Code);
– Overtime hours exceeding one-tenth of the contractual working time, which are paid at a 25% premium, may be subject to a lower premium (but not less than 10%) if provided for by an extended sectoral agreement or collective bargaining agreement (Article L 3123-19 of the French Labor Code).
Other modifications to the part-time work system are open to collective bargaining.
Litigation
During the conciliation before the labor court, employers and employees can now agree to settle the dispute by paying the employee a fixed indemnity , the amount of which is determined, without prejudice to any statutory, collectively agreed, or contractual compensation, according to a scale set by decree based on the employee's seniority (Article L 1235-1 of the French Labor Code). This scale was established by Decree No. 2013-721 of August 2, 2013 (see Information No. 4 below).
The Employment Security Act reduces the statute of limitations for legal actions performance or termination of an employment contract from five to two years. This period begins to run from the day the person bringing the action knew or should have known the facts enabling them to exercise their right (Article L 1471-1 of the French Labor Code).
By way of exception, this time limit does not apply to actions for payment of wages, compensation for personal injury sustained during the performance of work, or actions based on discrimination or acts of sexual or moral harassment.
Similarly, the statute of limitations for wage claims is reduced from 5 to 3 years. The action for payment or recovery of wages is subject to a three-year statute of limitations, running from the day the claimant knew or should have known the facts giving rise to the claim. The claim may cover sums due for the three years preceding that date or, if the employment contract has been terminated, sums due for the three years preceding the termination of the contract (Article L 3245-1 of the French Labor Code).
These new time limits apply to statutes of limitations running on June 17, 2013, provided, however, that the total limitation period does not exceed the previous time limit.
