Ordonnance on Enhancing Collective Bargaining

One year after the 8 August 2016 law on labour, modernizing labour relations and improving the security of career paths, the draft ordonnance on enhancing collective bargaining expresses the Government's desire to promote collective bargaining as closely as possible to the company level.

Focus on the main provisions of this ordonnance.

1. With respect to the relationship between industry-wide and company agreements, the ordonnance divides negotiation topics into three blocs:

The first indicates which stipulations of industry-wide agreements cannot be modified by a company agreement unless the company agreement provides equivalent or better protection. These stipulations concern:

• wage minimums; job classifications; sharing of the joint-management financing fund; and complementary social protection guarantees;
• measures related to the working time equivalency system; the number of hours that result in being classified as a night-shift worker; a minimum working time of under 24 hours for part-time jobs; the pay-increase rate for additional hours and the temporary increase in part-time employees' workload;
• measures related to fixed-term contracts, temporary employment contracts, and site-specific open-ended contracts ("CDI de chantier"); equality between men and women in the workplace; probationary periods; and collective bargaining terms for transferring employment contracts

The second bloc comprises the areas in which the industry-wide agreement can expressly provide that a company agreement concluded after the industry-wide agreement cannot include provisions that differ from those of the industry-wide agreement unless the company agreement provides equivalent or better protection. At issue here are occupational health risks, workers with disabilities, the appointment threshold for and number of union representatives and bonuses for dangerous or unhealthy work or working conditions.

In all other areas, the company agreement prevails over the industry-wide agreement, regardless of whether it is concluded before or after the industry-wide agreement.

Note in this regard that the law of 4 May 2004 added a second paragraph to French Labour Code Article L. 2253-3 that makes it possible for industry-wide agreements to expressly prohibit company agreements from creating exceptions to the relevant industry-wide agreement and that Article 45 of that Law restricts companies' right to create exceptions to industry-wide agreements concluded after the Law entered into force. With respect to the second bloc, these provisions will remain in effect if the parties to the industry-wide agreement confirm their scope before 1 January 2019. However, in all other areas for which the ordonnance provides that company agreements prevail, as soon as the ordonnance is published it will be possible to create exceptions to the industry-wide agreement, regardless of when it was concluded.

As regards the agreements' contents, the draft ordonnance creates an obligation to negotiate within the company to set the schedule, frequency, topics and terms for negotiations, including the topics subject to mandatory negotiation when a representative union organization so requests or at the employer's initiative. The agreement cannot have a term longer than four years. The provisions relating to mandatory negotiation terms only apply if there is no such agreement.

2. With respect to small companies' access to collective bargaining, the terms for negotiating in companies that do not have union representatives are set according to the number of employees:

• In companies that have fewer than 11 employees, the employer can submit a draft agreement to the employees that covers all of the topics open to negotiation, which will be valid if ratified by a two-thirds majority of the personnel. These provisions also apply to companies that have between 11 and 20 employees if there is no elected member of the employee representative body on the social and economic committee;
• In companies that usually have between 11 and 50 employees, an agreement may be entered into by an employee mandated by an industry-level representative union organization or by a member of the employee representative body on the social and economic committee. Such agreements' validity is subject, respectively, to employee approval (by a majority vote) or signature by members representing the majority of votes cast at the most recent workplace elections.
• In companies that have at least 50 employees, negotiation rules will not change.

3. With regards to the validity of collective bargaining agreements entered into with union representatives, the law of 8 August 2016 provided that when an agreement was signed by representative union organisations that had obtained 30% of the votes cast in workplace elections for representative organisations, the agreement's validity was subject to approval by the majority of the employees. Only the signatory union organisations could ask for such consultation. The ordonnance extends the option of asking for such consultation to the employer, provided none of those organisations objects. The validity requirements of the protocol setting out the terms for organising such consultations are also amended: to be valid, the protocol must be signed by the employer and the representative union organisations that obtained 30% of the votes cast in workplace elections, rather than only by the signatory union organisations.

The ordonnance also changes the date for making the majority requirement applicable to all collective bargaining agreements: it will apply to all agreements as of 1 May 2018, rather than 1 September 2019.

4. With respect to improving the security of collective bargaining agreements, actions to void company agreements must be brought quickly: within two months of (i) receiving notice of the agreement when the action is brought by a union organisation, or (ii) publication when the action is brought by the employees. In addition, if the court voids the agreement and it seems that the retroactive effect of voiding the agreement is likely to have manifestly excessive consequences, the court may provide that its decision will be effective only for the future or may vary the decision's effects over time. These provisions will apply to agreements concluded after the provisions enter into force.

5. As regards harmonising and simplifying the requirements for and the contents of certain collective bargaining agreements, the ordonnance combines the following agreements, which are each governed by different rules, into a single agreement: geographic or occupational mobility agreements, working-time reduction agreements, job-maintenance agreements, and job-saving and job-development agreements. It is now possible for agreements to adjust employees' working time, pay or internal mobility conditions and to replace ipso jure any contrary provisions in an employment contract. Employees can be dismissed if they refuse to accept changes to their employment contracts resulting from application of the agreement. Refusing to accept changes to one's employment contract constitutes a real and serious cause for dismissal, which is not an economic dismissal.

The provisions of this ordonnance will come into force on the date of publication of the related application decrees and at the latest on 1 January 2018.