Job security: what rules do employers need to master today?

Since the law of June 14, 2013, relating to employment security, labor law has undergone numerous reforms. Some measures introduced at the time have become permanently integrated into company practices, while others have been replaced by new mechanisms.

Collective performance agreement, partial activity, supplementary health insurance, part-time work, economic dismissal or employment disputes: employers today have to deal with scattered rules resulting from successive reforms.

For a very small business or a small or medium-sized enterprise, job security is therefore no longer just about knowing the 2013 law. It requires mastering the currently applicable mechanisms in order to adapt the organization of the company, prevent difficulties and limit the risks of litigation.

1. The collective performance agreement has replaced the former job retention agreements

The employment security law established job retention agreements. These allowed a company facing serious temporary economic difficulties to temporarily adjust working hours, work organization, and employee compensation.

This feature has since been removed.

It has been replaced by thecollective performance agreement, provided for by ArticleL. 2254-2 of the Labour Code.

In what cases should a collective performance agreement be concluded?

The collective performance agreement can be concluded in order to meet the needs related to the operation of the company or to preserve or develop employment.

Unlike previous job retention agreements, the company does not necessarily have to demonstrate the existence of serious economic difficulties.

The agreement may include, in particular:

• adjust working hours;
• modify the organization of work;
• adjust remuneration, in compliance with the legal minimum wage and collective bargaining minimums;
• determine the conditions for professional or geographical mobility within the company.

It must specify its objectives in a preamble and may provide for the methods of informing employees, the conditions under which managers and corporate officers make proportionate efforts, or the support measures offered to employees.

What happens if an employee refuses the agreement?

The stipulations of the agreement supersede any conflicting or incompatible clauses in the employment contract.

The employee may, however, refuse the modification to their contract. In principle, they have one month from the date the employer provides the information to notify their refusal.

The employer can then initiate dismissal proceedings within two months. This dismissal is based on a specific reason that constitutes a genuine and serious cause.

The conclusion and implementation of a collective performance agreement must therefore be carefully prepared. Imprecise drafting, irregular negotiation, or inadequate communication with employees can undermine the entire system.

2. Partial activity remains a tool for preserving employment

The 2013 reform unified the previous partial unemployment schemes. Since then, partial activity has undergone numerous adaptations, particularly during the health crisis.

Today, it remains a tool that allows a company facing a temporary downturn in activity to:

• to reduce working hours;
• to temporarily close all or part of an establishment;
• to compensate employees for hours not worked;
• to avoid or limit job losses.

In what situations should partial activity be used?

The employer may, in particular, apply for partial activity benefits in the following cases:

• of unfavorable economic conditions;
• supply difficulties;
• of disaster or exceptional weather;
• transformation, restructuring or modernization of the company;
• of any other exceptional circumstance resulting in a reduction or temporary suspension of activity.

The request must be addressed to the administration. When the company has a social and economic committee, the latter must be informed and consulted under the conditions applicable to the company.

During non-working hours, the employment contract is suspended. The employer pays the employee partial activity compensation and, subject to acceptance of their application, receives an allowance financed by the State and Unédic.

As compensation and allowance rates have been frequently changed, it is best to check the rules applicable on the date of application on the official page dedicated topartial activity.

Can partial activity prevent redundancy?

Partial activity is a suitable solution when difficulties are temporary and the resumption of activity can reasonably be anticipated.

It is not sufficient when the company is facing a sustained decline in its activity, a structural reorganization or a permanent elimination of positions.

In this case, the employer must examine other available solutions: reorganization, collective performance agreement, training, redeployment, collective negotiated termination or economic dismissal procedure.

3. Group supplementary health insurance has become a permanent obligation

Since January 1, 2016, private sector employers have been required to provide their employees with mandatory group health insurance coverage.

The employer must cover at least 50% of the cost of this coverage.

The system put in place must comply with:

• the minimum guarantees provided for by the regulations;
• any obligations under the collective agreement or industry-wide agreement;
• the collective and mandatory nature of the system;
• the rules relating to objective categories of employees;
• legally permitted cases of exemption.

The applicable regulations and the main cases of exemption are presented on the official fact sheet dedicated to company health insurance.

Which employees are exempt from membership?

Some employees may request not to join the group scheme, particularly when they already have mandatory coverage elsewhere or when they find themselves in certain situations provided for by the texts or the act establishing the scheme.

Exemptions should not be presumed. The employer must collect and retain the employee's request and, where necessary, the corresponding supporting documents.

A check must be carried out periodically, particularly when an exemption is limited in time.

What happens to the supplementary health insurance after the contract is terminated?

When an employee leaves the company and receives unemployment benefits, he can, under certain conditions, temporarily retain the health and welfare benefits he had in the company.

This portability is free for the former employee and can apply for a maximum period of twelve months, within the limit of the duration of their last contract or their last successive contracts with the same employer.

The employer must indicate the continuation of the guarantees in the certificate of employment and inform the insurance organization of the termination of the contract.

4. Part-time work remains subject to strict formalities

The 2013 law established the principle of a minimum working time of 24 hours per week for part-time employees.

This principle remains, but it has several exceptions.

A shorter duration may result in the following, among other things:

• of an extended sectoral agreement;
• a written and reasoned request from the employee to address personal constraints;
• the employee's desire to combine several activities;
• of certain contracts or situations expressly provided for by law;
• of the status of a student under 26 years of age pursuing their studies.

The part-time contract must be in writing and include the mandatory information, in particular:

• the employee's qualifications;
• the elements of his remuneration;
• the weekly or monthly working hours;
• the distribution of this duration between the days of the week or the weeks of the month;
• the procedures for modifying this distribution;
• the conditions for completing additional hours;
• the procedures by which schedules are communicated to the employee.

The absence of a written agreement or the omission of certain details may give rise to a presumption of full-time employment.

How should overtime hours be paid?

Hours worked beyond the hours stipulated in the contract constitute overtime. They must be compensated with a wage increase, the rate of which depends on the number of hours worked and, where applicable, the provisions of the collective agreement.

The employer must also ensure that the regular performance of additional hours does not lead to exceeding legal or contractual limits or to calling into question the classification of the part-time contract.

Therefore, drafting the contract and effectively monitoring working hours are essential.

5. Collective bargaining can adapt the organization of the company

Since 2013, the role of collective bargaining in the company has been considerably strengthened.

Even in the absence of a union representative, agreements can, under certain conditions, be concluded in small businesses:

• with elected members of the social and economic committee;
• with mandated employees;
• or, in companies with fewer than eleven employees and certain companies with fewer than twenty employees without a CSE, by ratification of a draft agreement proposed by the employer by a two-thirds majority of the staff.

These agreements may cover, in particular:

• the organization of working time;
• packages in days or hours;
• teleworking;
• the on-call duties;
• bonuses and certain elements of remuneration;
• mobility;
• the organization of holidays;
• the employment of experienced employees;
• certain measures intended to accompany a restructuring.

Collective bargaining, however, should not be reduced to a mere formality. The choice of negotiator, the majority rules, the provision of information to staff, the content of the agreement, and its filing all determine its validity.

6. Economic layoffs require special planning

When a company plans to eliminate or transform a job for a reason not related to the employee's person, it must check whether the conditions for economic dismissal are met.

The reason may include:

• economic difficulties;
• technological changes;
• of a reorganization necessary to safeguard competitiveness;
• of the cessation of the company's activity.

The procedure varies depending on the number of planned redundancies, the size of the company and the existence of a social and economic committee.

Before any dismissal, the employer must seriously seek out redeployment opportunities available within the company and, where appropriate, within the group to which it belongs.

It must also consider measures that could avoid dismissals or limit their number: adaptation, training, reduction of working hours, mobility, voluntary departures or reorganization of positions.

The general rules applicable are presented by the official portal in its fact sheet relating to dismissal for economic reasons.

Depending on the situation, the employer will also have to offer:

• a professional security contract;
• a redeployment leave;
• accompanying measures;
• or a job protection plan when the legal thresholds are reached.

Documentation of the economic reason, redeployment searches and order criteria is crucial in case of dispute.

7. What are the time limits for filing a claim with the labor court?

The limitation periods have been profoundly modified since the 2013 law, and subsequently by reforms.

Today, it is particularly important to distinguish between:

• contesting the termination of the employment contract: 12 months;
• action relating to the execution of the employment contract: 2 years;
• salary reminder or repetition: 3 years;
• action based on discrimination: 5 years from the date the discrimination was revealed;
• compensation for bodily injury: specific regime applies, in principle, from the date of consolidation of the injury.

These time limits should not be confused with the much shorter time limits sometimes applicable during a disciplinary procedure or a dismissal.

The reference text concerning actions related to the execution or termination of the contract is ArticleL. 1471-1 of the Labour Code.

What are the risks in the event of dismissal without real and serious cause?

When a dismissal is deemed to be without real and serious cause, compensation is, in principle, determined according to the scale provided for in Article L. 1235-3 of the Labour Code.

The minimum and maximum amount depends in particular on:

• of the employee's seniority;
• of the company's workforce;
• of the reference remuneration.

This scale does not apply, however, when the dismissal is void, particularly in the presence of discrimination, harassment, an infringement of a fundamental freedom or certain violations affecting a protected employee.

The distinction between unjustified dismissal, irregular dismissal and void dismissal must therefore be made before any risk assessment.

8. Is it still possible to reach an agreement before the labor court?

The employer and the employee can end their dispute during the conciliation phase of the labor court by agreeing to the payment of a lump sum compensation.

Its amount is determined based on the employee's seniority according to a regulatory scale.

This compensation is cumulative, where applicable, with legal, conventional or contractual compensation related to the termination of the contract.

The use of the conciliation scale is not mandatory. The parties remain free to negotiate a different agreement, particularly within the framework of a settlement, provided they respect the rules of validity and the necessary reciprocal concessions.

Before any negotiation, the employer must assess:

• the chances of success of his defense;
• the compensation that may be awarded;
• any potential salary arrears;
• the social and fiscal consequences of the agreement;
• the cost and the foreseeable duration of the litigation.

How to secure the company's social practices?

For a very small business or a small or medium-sized enterprise, preventing social risk relies less on the accumulation of documents than on the consistency of practices.

The employer must, in particular:

1. regularly check the provisions of your collective agreement;
2. update its contract and amendment templates;
3. formalize the exceptions to part-time work;
4. to monitor exemptions from supplementary health insurance;
5. track and retain information relating to working time;
6. consult the CSE when a consultation is legally required;
7. prepare for collective bargaining with a procedure adapted to the workforce;
8. documenting economic difficulties and redeployment efforts;
9. secure disciplinary procedures and terminations;
10. keep the documents for as long as necessary in case of litigation.

Employees' use of their time and work tools can also raise disciplinary, civil, or criminal issues. Our article on thepersonal use of work time examines the limits of employer control and disciplinary power.

When termination is being considered due to an employee's health condition, a specific procedure must be followed. We outline the main steps in our article on dismissal for incapacity.

Key takeaways

The 2013 employment security law has had a lasting influence on labor law, but several of its provisions can no longer be applied in their original wording.

Job retention agreements have been replaced by collective performance agreements. Partial activity, supplementary health insurance, part-time work, collective bargaining, and employment litigation have themselves undergone numerous changes.

For the employer, securing employment today means identifying the right tool, respecting the applicable procedure and keeping the elements that justify the decisions taken.

A preliminary legal check is generally less expensive than a late regularization or an employment tribunal dispute.

This article presents the general rules applicable as of the date of its update. It does not replace a consultation tailored to the company's specific situation.

Article written by Chaouki Gaddada, partner lawyer at the firm ARST Avocats.