Out-Law / Your Daily Need-To-Know

Covid-19 wave 2 ‘less damaging’ in France but wide-scale job cuts expected

Out-Law News | 12 Nov 2020 | 11:26 am |

As French businesses battle to survive Covid-19, Valerie Blandeau explains how the country’s redundancy laws apply in a restructuring.
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  • Transcript

    In recent programmes we have been looking at the impact of Covid-19 on companies around the world and seeing how many of them are responding by carrying out a restructuring, often involving mass redundancy exercises. The key message throughout has been that jurisdictions in each country are different, sometimes very different, and likewise the employment laws, and that is a vital point to understand if, say, you are a multinational business based in the UK but with a presence in one of those countries. So let us turn next to France. The Business Times reported on Monday that French restrictions won't be as damaging as previous lockdown. They say business leaders in industry and construction expect a much milder decline in activity because they face fewer limits on operations and new health protocols allow more employees to continue working. The Bank of France estimates activity in November during the lockdown will be 12per cent below the pre-crisis normal level. Nonetheless, Reuters reports that there will still be widespread job cuts in France in the coming weeks and highlights the problems of the French bank SocGen is to cut 640 jobs. The bank said it was restructuring to boost efficiency and profitability but there would be no forced redundancies – instead the bank would encourage employee mobility or offer voluntary redundancy packages instead. France 24 looks at the economic impact of France's latest coronavirus restrictions – the hospitality industry, already bruised by the lockdown earlier this year – is now facing the prospect of up to 15% of businesses in the sector disappearing by the end of this year and, for those that can hang on, redundancies on a huge scale. So let’s turn to those redundancies, and what French employment law requires of employers. How are French employment laws from the UK’s? As an HR professional, what do you need to know? To help with all of that I spoke to Valerie Blandeau who is based in Paris:

    Valerie Blandeau: “Under French employment law the first thing that a company has to think about, or the headquarters if it's headquarters is elsewhere than in France, is the number of persons to be terminated due to a potential restructuring or redundancy programme. Under French law collective procedure begins above two, meaning two persons to be terminated is already collective, and then there is a second threshold which is ten employees, meaning that if a company is contemplating to layoff nine employees over a period of 30 days, this is what we call the small process of collective redundancy that has to be implemented. If we are talking about more than 10 people to be terminated in the company of 50 persons-plus over the same period of 30 days which is in the same wave, to make a long story short, then we have to implement and think about what we call the big one, the big process, and that triggers consultation of the works council on the project in itself, like the rationale that will be explained to the works council to explain why, despite everything that has been done before, there is no other choice than to let people go because the situation is no good anymore and we have to preserve the company interest, or the or the group interest, and so on and so forth. So that's the first consultation, on the rationale. Then there is a second consultation of the works council around the social plan in itself, which is basically a list of all the social measures that the company is willing to put in place to help people to find a new position, new job, training. So it could be travel allowances to try to find new jobs, it can be redeployment training, redeployment allowances, that kind of thing, and additional severance package which is always something that works council is willing to negotiate to help people find a new job and be as less impacted as possible in terms of remuneration due to the restructuring. So, as a summary, first thing is how many persons to be terminated? How many employees in the company in France because all these assessments are due to be taking place in France only? How many persons to be terminated? How many persons in the company, to be sure that we implement the appropriate process which is: (a) if it's less than two, an individual process and (b) if it's between 2 and 9, the small collective process, and (c) if it is above 9 we are talking about the social plan, and it's about a two to four months' consultation with the works council before implementing any termination in itself.”

    If you would like to follow business news in France we recommend the Euronews website which is headquartered in Lyon. As well as daily business news it also covers the latest Covid-19 developments.