Ordonnance relating to the new organisation of social and economic dialogue in companies and encouraging the exercise and promotion of union responsibilities

Merging all the employee representation institutions into a single body was central to the negotiation that preceded the Rebsamen Act, but it applied only to companies that have more than 300 employees and was subject to the conclusion of a collective bargaining agreement that obtained majority approval. The current administration wants to continue simplifying the rules related to employee representation and announced very early that it intended to generalise the single representation body, which would fulfil all the functions of the works committee (CE – comité d'entreprise), staff delegates (DP – délégués du personnel), and the health, safety and hygiene committee (CHSCT – comité d’hygiène, de sécurité et des conditions de travail).

The ordonnance relating to the new organisation of social and economic dialogue in companies and encouraging the exercise and promotion of union responsibilities was presented on 31 August. It confirms the merger of the employee representation bodies and sets out the operating rules for the new body, called the Social and Economic Committee (CSE - comité social et économique).

We discuss below the main provisions of this ordonnance and analyse their rules for entry into force.

► The Social and Economic Committee

1. Companies that have at least 11 employees will be required to set up a CSE.

In companies with 11 to 50 employees, the CSE's employee representatives will perform the duties currently performed by staff delegates: in particular, presenting individual claims to the employer, making sure the company complies with the Labour Code, etc.

In companies with at least 50 employees, the CSE will have the combined current duties of the DP, the CE and the CHSCT. It will have legal personality, as the CE currently does, and will therefore be able to take legal action.

In a major innovation, the CSE may be set up not only at the traditional levels, i.e. the level of the establishment, company, group or economic and social unit, but also at intercompany level.

Companies or establishments that have at least 300 employees will be required to set up a specific committee to deal with issues of health, safety and hygiene and the labour inspector may require such a committee in other companies or establishments.

2. Regarding composition of the CSE, the number of representatives on this new committee and the time they spend on representation will be defined subsequently by decree. The ordonnance merely indicates that the time allotted to such representation may not be less than 10 hours per month in companies with fewer than 50 employees and 16 hours per month in other companies.

The committee members will serve four-year terms and the number of consecutive terms will be limited to three, except in companies that have fewer than 50 employees, according to terms to be set out in a future decree.

The ordonnance also provides that company agreements can provide for "in-house representatives" to be selected from the CSE members or appointed by the CSE.

3. As concerns operations, in the wording that results from the ordonnance, French Labour Code Article L. 2315-27 provides that the CSE must meet at least once a month in companies that have at least 300 employees, and once every two months in companies with fewer than 300 employees. At least four of these meetings must be wholly or partially devoted to issues of health, safety and hygiene, as is currently the case for the single employee representative body.

Pursuant to an agreement with the employer, this committee may set the terms for its operations: contents, frequency, consultation terms, and level at which such consultations will be conducted in companies with complex structures (composed of establishments CSE and a central CSE). Such an agreement may provide that the committee will issue a single opinion.

In the absence of an agreement and – as with the current CE – this committee will be consulted every year regarding the company's strategic directions, economic and financial position, labour policy, working conditions and employment. Unlike the provisions of the draft authorization act, the administration has not made it mandatory to ask for several estimates for expert assessments. However, it provides that the social and economic committee members will draw up specifications for the assignment and that the expert will notify the employer of "the provisional cost, scope and duration of the expert assessment" within an amount of time to be specified in a State Council (Conseil d’Etat) decree.

A company agreement or an agreement between the CSE and the employer may stipulate the number of expert assessments in the context of mandatory annual consultations.

4. With respect to financing the expert assessments, the CSE must pay 20% of their cost. Limited until now to the new expert assessment of strategic directions, such co-financing will be imposed for all other expert assessments, in particular those related to occasional consultations such as, for example, expert assessments in the context of mergers, projected acquisitions, the economic alert right or important projects that will change working conditions. However, expert assessments related to the economic position, labour policy, collective dismissals or in the event of a serious risk will continue to be financed entirely by the employer.

5. As regards the CSE's resources, the ordonnance provides in Article L. 2315-57 that in companies with between 50 and 2,000 employees, the employer must pay an operating allowance equal to 0.20% of the payroll. This allowance is increased to 0.22% for companies with more than 2,000 employees. In response to the Court of Cassation's case law on the reference to account 641, "payroll" has been defined in French Labour Code Article L. 2312-83 as "all of the earnings and pay subject to social security taxes pursuant to Social Security Code Article L. 242-1 or Rural and Marine Fishing Code Article L. 744-10."

The committee may decide through deliberations to transfer "any or all" of the annual operating budget surplus to subsidise social and cultural activities or, conversely, from the social and cultural activities budget to the operating budget.

► The Company Council

A majority company agreement or an extended industry-wide agreement may provide for merging the employee representation bodies and including the union representatives in them as well. In such a case, the body in question, called the Company Council (conseil d’entreprise), may enter into collective bargaining agreements.

In addition, such majority agreements will specify the topics, other than workplace equality and training, for which the employer's decisions must be submitted to the council for a compliance opinion.

As regards the entry into force, the provisions related to the Social and Economic Committee and the Company Council will enter into force the day after the date the implementing decrees are published, and no later than 1 January 2018.

Transitional measures were introduced for companies that have employee representatives on the date the ordonnance is published.

In such companies, the CSE will be instituted after the current terms expire and by 31 December 2019 at the latest. The terms of the works council, CHSCT and single employee representative body members and the employee representatives must end no later than that date.

During this period, the Labour Code provisions relating to the works council, staff delegates and CHSCT will continue to apply according to the wording in force on the date the order is published.

If these terms end between the date the orders are published and 31 December 2018, the employer may decide to extend them for at most one year after consulting such bodies.

► Promoting union careers

With respect to elected representatives who spend at least 30% of their working time on representation, French Labour Code Article L. 2141-5 currently provides that the end-of-term occupational interview can include a survey of the skills acquired during the term. The ordonnance provides that in companies with more than 2,000 employees, this provision will now apply to all elected representatives, regardless of the number of hours they spend on representation.

In addition, if an employer makes an employee available to a union organisation, the collective bargaining or other agreement referred to in French Labour Code Article L. 2135-8 must provide for adjustments that enable the employer to comply with its training and adaptation obligation set out in Article L. 6321-1 of the Code.

Moreover, the ordonnance provides that companies may deduct the salaries and contributions of employees who are on training, economic, social or union leave from the contribution the company pays pursuant to French Labour Code Article L. 2135-10 (0.016%) to finance social dialogue.