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France: Controversial Labor Law Reform Adopted

(Oct. 14, 2016) On August 9, 2016, French President Francois Hollande signed into law a significant reform of France’s labor laws. (Loi n° 2016-1088 du 8 août 2016 relative au travail, à la modernisation du dialogue social et à la sécurisation des parcours professionnels (1) [Law No. 2016-1088 of 8 August 2016 on Labor, Modernization of Labor Relations, and Securement of Career Paths (1)], LEGIFRANCE.)

The law was initially introduced as a bill by Myriam El Khomri, France’s Labor Minister, on March 24, 2016, and went through a long and difficult legislative process that included a challenge to its constitutionality before the Conseil constitutionnel (Constitutional Council).  (Projet de loi visant à instituer de nouvelles libertés et de nouvelles protections pour les entreprises et les actifs (Procédure accélérée) [Bill to Establish New Liberties and New Protections for Companies and Workers (Accelerated Procedure), No. 3600, Assemblée Nationale (lower house of the French Parliament) (Mar. 24, 2016);  Conseil constitutionnel, Decision No. 2016-736 DC, Aug. 4, 2016, Conseil constitutionnel website.)

Main Provisions of the Law

The law’s principal aims are to reshape and simplify French labor law and boost competitiveness and employment. The law favors collective bargaining at the level of individual companies, in contrast with previous legislation that granted more decision power to industry-wide agreements.  (Jon Henley & Phillip Inman, Why Have France’s Labour Reforms Proved So Contentious?, GUARDIAN (May 26, 2016); Extrait du compte rendu du Conseil des ministres du 24/03/16 [Excerpt from the Report of the Council of Ministers of March 24, 2016], Assemblée Nationale website.)

Some highlights of the law are:

  • creation of a committee made up of social relations experts and practitioners who will propose significant changes to the legislative section of the current Code du travail (Labor Code) (Loi n° 2016-1088 du 8 août 2016 relative au travail, art. 1);
  • retention of the standard 35-hour work week, but granting to employers the authority to negotiate on issues of how work time is organized, e.g., with regard to overtime and its remuneration, a change that will give priority to agreements made between individual employers and employees over industry-wide agreements (id. art. 8);
  • more relaxed labor negotiation rules and more transparency in collective bargaining (id. art. 16);
  • validation of company agreements signed by trade unions that receive the majority of employee votes in elections for employee representatives, but providing that if a company agreement is signed between management and trade unions representing less than 50% of employees, any union representing more than 30% of employees may organize a direct referendum of employees on the company agreement (id. art. 21);
  • definition of the scope of negotiations at the industry branch level, in order to create common sets of rights applicable to all employees within an industry branch and to regulate competition among companies within that branch (id. art. 24);
  • application of special employment contracts and mentoring schemes to help at-risk youth find employment and become independent adults (id. art. 46);
  • introduction of the “right to disconnect” (the right of an employee to negotiate the amount of time dedicated to sending and receiving work-related texts, phone calls, and emails outside regular working hours) and establishment by the employer of devices to regulate employees’ use of digital tools (id. art. 55); and
  • the validity of a company’s short-term economic difficulties as a basis for employee layoffs (id. art. 67).

Controversy 

This reform of French labor laws was adopted despite strong opposition, both within the Parliament and from labor unions and student organizations. (Anne-Aël Durand, Dix chiffres pour résumer le feuilleton de la loi travail [Ten Numbers to Summarize the Labor Bill Saga], LE MONDE (July 21, 2016).) Well over a million people signed a petition against the legislation, and 12 major demonstrations were organized to protest against it between March 9 and July 5, 2016. (Id.)  Opposition to the legislation within Parliament, including from the ranks of the ruling Socialist Party, caused the government to force it through, using a special constitutional provision that bypasses normal parliamentary voting procedures.  (French Labour Reforms: Government to Force Plan Through, BBC (May 10, 2016).)

The main criticisms of the new law are that it may negatively affect workers’ rights and shift the balance of power of labor negotiations in favor of businesses. (Ousmane Cisse, Le projet de loi El Khomri et l’articulation des normes conventionnelles en droit du travail [The El Khomri Bill and the Structure of Conventional Norms in Labor Law], LES ÉCHOS (July 15, 2016).)  In contrast to these critiques, the government claims the new law will boost employment (French Labour Reforms: Government to Force Plan Through, supra) and the International Monetary Fund has given it a positive assessment, stating it “would be another step forward, increasing the scope for company-level labor agreements and reducing judicial uncertainty around dismissals.” (France: Staff Concluding Statement of the 2016 Article IV Mission, INTERNATIONAL MONETARY FUND (May 24, 2016).)

Constitutional Review and Continued Opposition

The legislation was reviewed by the Constitutional Council (France’s court with the power to review the constitutionality of laws) before Hollande could sign it into law, as its constitutional validity was challenged by at least 60 senators and 60 members of the National Assembly after it was adopted by both houses of Parliament. The Constitutional Council issued its decision on August 4, 2016.  (Conseil constitutionnel, Decision No. 2016-736 DC, Aug. 4, 2016, Conseil constitutionnel website.) The Council upheld the legislation, apart from three relatively minor provisions.  (Id.)  This allowed the legislation, minus the three struck provisions, to be signed into law on August 9.

Labor unions and other organizations opposed to the law organized another day of protest on September 15, demanding that it be repealed. (Manifestations contre la loi Travail: 19 blessés, 62 interpellations, 32 gardes à vue [Protests Against the Labor Law: 19 Injured, 62 Arrested, 32 Detained], 20 MINUTES (Sept. 15, 2016).)

Prepared by Ricardo Wicker, Law Library Intern, under the supervision of Nicolas Boring, Foreign Law Specialist.