Employment Law in France

Employment Contracts in France

There are various forms of French employment contract, e.g. interim contracts, contracts of apprenticeship, the status of auto-entrepreneur, together with the “insertion” style of contract which was developed as a method of helping the long-term unemployed to find work.

The majority of people are employed under either the contrat de travail à durée déterminée (CDD), i.e. fixed-term contract, or the contrat de travail à durée indéterminée (CDI), i.e. permanent contract, which are the commun form for employment contracts in France.

Fixed-Term Contracts in France

All employees must work under a recognised contract. French employment law favours permanent contracts, the CDI, which is much more beneficial to employees. Nonetheless, certain exceptions allow employers to use Fixed-Term Contracts, the CDD.

The CDI contract provides for employment that is stable and permanent. The CDD is seen as a contract under someone may be hired to fulfil a particular short-term role.

The French Labour Code identifies exceptional circumstances under which an employer may be permitted to hire workers under a Fixed-Term contract as the following:

Hiring a replacement worker in France

Employers can hire temporary workers to replace an absent employee.

For an initial period, a CDD (Fixed-Term) contract may be availed of to address a vacancy arising from retirement, a worker leaving the company, or to fill a gap stemming from the promotion of an employee to another role within the company.

Factors to note:

• The contract’s end date should be tied to the employer’s reason for use of a CDD
• The period of the replaced employee’s absences has no impact on the employer’s right to engage a substitute under a fixed-term contract
• The CDD must be converted to a CDI contract when the temporary absence has become permanent and the replacement remains in employment
• A replacement may be engaged to carry out only part of the role of the absent employee
• A manager or director can potentially be partially replaced in a manner where the substitute employee is not present physically on the site where the replaced person usually would be.

Short-term augmentation in activity

An employer has the right to hire individuals on temporary contracts so as to react to the challenges of a short-term, or unforeseen, augmentation in activity.

Legally recognised reasons for availing of a CDD contract on this basis include the following:

• An exceptional export order which requires significant investment by the enterprise in the context of their normal level of business
• Temporary work which is not part of the business’ core sectors of activity e.g. replacing a department’s IT systems, team training, annual audit etc.
• Emergency work that must be carried out immediately to ensure worker safety or to mend or secure resources

Work that is temporary by its nature

Seasonal Employees

Employers may hire temporary workers under CDD contracts to perform functions or meet short-term requirements which repeat, more or less, at the same periods each year; e.g. the farming and tourism industries.

1. The specific purpose CDD contract
   This is available where, e.g. skilled professionals have been engaged to carry out a particular function or role (which is temporary in nature, therefore the contract concludes on the work’s completion) under an extended branch agreement.
2. Customary CDD contracts
   In a number of sectors of activity, it is accepted that a permanent contract may be unsuitable given the temporary nature of some of the roles concerned, such as sports associations or the entertainment industry.

Special circumstances

1. The “Senior” contract
   A fixed-term contract may be concluded between an employer and an employee who is aged 57 years or older. The employee is required to have been a registered jobseeker for a minimum of three months prior to entering the contract. This form of contract is intended to aid older jobseekers in returning to work.
2. Professional gamers
   Special provision for fixed-term contracts for the employment of professional video game players relating to their participation in competitions is available.

The Duration of the Employment Contract in France

A CDD contract should normally contain both a defined expiry date and a minimum duration period. It should terminate on the contacted date, or when the its purpose has been realised (such as the completion of emergency works). The maximum length of contract is variable. This depends upon the circumstances which justified its use or on the form of CDD.

Nonetheless, the initial length of a CDD in addition to the periods of any renewals can not surpass the maximum duration permitted. A CDD can be renewed on two occasions for a particular period, or from one defined date to another. This period can be equal to, shorter than, or even longer than that which was originally provided for in the original contract.

The maximum length of a CDD contract with a defined expiry, or from date to date, can run from three months to two years. ‘Specific purpose’ or ‘Senior’ CDD, contracts may last up to three years.

Permanent Contract of Employment in France (the French CDI)

The contrat de travail à durée indéterminée is a contract of employment in which the duration, or completion date, is “undetermined”. That is to say that in ordinary circumstances the contract does not need to be renewed.

Nonetheless, such a contract can be terminated at any time via a unilateral decision; e.g. a decision by the employee to offer his or her resignation, or by the employer if they feel that there are suitable grounds to dismiss the employee.

• When should an employee sign a CDI contract?
  Most workers in France would chose a CDI contract over the CDD version if they had the option. The CDI format is considered to be the standard type of employment contract.
  An employer must offer this type of contract except for circumstances in which they can justify recourse to another form of contract. A CDI can be used for a full-time or part-time position.
• What format should a CDI contract take?
  Any employment contract has to be agreed and normally signed by the employer and employee. That said, a full-time CDI, exceptionally, can be agreed in a non-written format except where a contrary provision demands a written contract.
  Although such contracts remain verbal, employers are under the obligation to provide employees with the information contained in the preliminary declaration of employment in writing. This preliminary declaration should also be forwarded to the French workers’ social security authority.
  The contract is required to be drafted in French, however when the employee is a foreigner, a translation is to be provided if it is requested.
• What is contained in the contract?
  The terms of the CDI are very much at the discretion of the parties.
  That said, the clauses and conditions must of course respect French values and labour law.
• How can a CDI be terminated?
  Employment under a CDI cannot come to and end without the express wishes of either the employer or employee, or via the mutual agreement of both parties.
  In some circumstances, the employee may be in a position to request a judicial termination. This would most commonly be in conditions where it is clear that the employer has not fulfilled his obligations. The employee should at this point acknowledge contract termination and advise the employer in writing.
  This would usually result in either one of the following judgements:
  • The end of the employment is considered to be a form of constructive dismissal, i.e. it is legally ruled that the employee was effectively forced to resign
  • Should the employee’s complaints not be recognised as being legitimate, the termination of contract is judged to be a resignation

Recruitment

How can Business recruit under an Alternance training scheme?

Increasingly, French businesses are opting to hire trainees working in alternance. The ability to provide a vocational training contract permits a business to meet the challenges that are posed by regular staff turn-over, to replace employees on sick leave or holiday, and to assist in addressing a short-term spike in activity at an affordable cost.

As an apprentice, an alternance regime employee is paid a lower wage than colleagues. Nevertheless, an alternance training contract is an excellent opportunity to obtain valuable hands-on experience in the sector and to benefit from the tutoring of a qualified colleague who can offer detailed explanation of the nuances of the profession and the goals of the enterprise.

Companies which would like to recruit trainees to work under alternance contracts should be aware of the following:

Recognising the requirements of the business before hiring

Alternance should be understood as a sincere partnership between the employer and the trainee.

Prior to beginning the search for a suitable candidate, one must clearly identify the business’ needs. Therefore, the profile of the position offered to any future contracted apprentice should be precisely defined.

The position must fall under one of the training programs that are offered by the National Ministries of Education & Agriculture.

In the description of the post, the following information must be made clear:

• Title of the position,
• Essential qualifications,
• Detail of the duties, obligations, roles to be carried out,
• The trainee’s position within the company’s organisational structure,
• Competences required,
• The trainee’s place of work,
• Details of pay,
• Contact details for the submission of candidatures.

Searching for the correct alternance candidate

The birth of the Internet has made it easier for a business to find suitable candidates to fill its vacant positions. This remains the case should a company be recruiting a trainee under an alternance contract, or an experienced worker under a full-time contract.

The key task when it comes to internet recruiting is to draft an attractive job advertisement so as to draw in as many applications as possible.

Interviewing applicants allows the recruiter to clarify the impression the candidate makes in person and to assess how well he or she communicates.

Creation of the alternance contract

When the candidate has been chosen, the employer must take the required administrative steps to guarantee correct compliance with French labour law.

The employer is obliged to sign a declaration of commitment, confirming that it will be responsible for providing the necessary work equipment, that the apprentice’s tutor will be appropriately qualified, and that it will guarantee the organisation of the alternance work period. The employer must then draft the alternance contract.

Designation and education of a tutor

A tutor must be chosen to carry out the training of a future employee under an alternance contract. This individual is directly responsible for the trainee during the apprenticeship contract.

The tutor is required to:

• Hold the degree or equivalent qualification for which the alternance trainee is preparing,
• Benefit from a minimum of two years’ experience in the same field where he or she has worked under a professional contract, or three years in the context of an apprenticeship,
• Finish a training course related to organising alternance instruction.

When the contract has been signed by the parties, the administrative steps followed and a tutor named, the employer and the alternat can begin their partnership.

Benefits of alternance employment for companies

Alternance contracts offer various advantages to businesses.

Training employees in alternance helps their integration into the business and guarantees that he or she learns the specific skills that are required. After completion of the apprenticeship period, a company can hope to engage an employee permanently in confidence that they are able to carry out the required tasks.

Alternance training can last from a minimum of 6 months to 3 years maximum. This allows the employer to supervise the integration of trainees and observe their development in the workplace.

The details of alternance training are adjustable to the individual recruitment problems that a business may encounter. Alternance, therefore is a way of addressing a lack of satisfactory candidates in smaller, or more specialised, industries or activities.

Job & competency future planning & management

Alternance training is adapted to the needs of companies which are addressing an immediate requirement to recruit staff. It can represent an investment for the employer, with a view to preparing itself to engage permanent employees who can meet its future development goals.

Employment costs

Alternance training enables an employer to make significant savings when compared with the ordinary practice of hiring a worker. To compensate the efforts made by businesses in undertaking alternance training, the contracts provides for minimum levels of payment. These are lower than than standard salaries. Moreover the business does not include alternance trainees in the official size of its workforce (and can therefore avoid a number of the obligations which would usually go with it).

Under an apprenticeship contract, the minimum permitted level of remuneration is between 25 to 78% of the Smic depending upon the candidate’s age and qualifications when the contract was signed.

Under a vocational training contract, the payment of apprentices ranges from a minimum of 65% of the Smic (a trainee who has graduated high school and is less than 21 years of age), to a maximum of 85% of the standard minimum salary within the subject industry for a trainee who is 26 years of age or older.

Social assistance & tax exemption provisions

To acknowledge the efforts undertaken by the employer for the training of alternance employees, various supports and exemptions have been made available to facilitate the reduction of the costs of training.

Apprenticeship contracts allow businesses to profit from regional support, the exoneration of social charges connected to the contract (depending on the number of employees) and an a tax credit for apprenticeships. The training of ‘apprentice masters’ is comprised in the fee payable for continuing professional development.

Vocational training contracts give employers the right to a reduction in employers’ contributions on lower and average salaries, a total exoneration of contributions if the apprentice is aged at least 45 years of age, and support for the employment of trainees aged at least 26 years or of currently registered jobseekers.

A wide variety of expert opinion

Numerous actors are involved in advising and helping businesses who want to recruit alternance trainees.

The OPCA, are state bodies which are charged with collecting the required financial contributions of those businesses that offer professional training. Divided into branch or relevant sector of industry, these are the key actors involved in briefing businesses about the methods they should put in place for alternance formation in their particular sphere of activity.

The “Point A” network has been developed on a national level by the chambers of commerce and industry. It provides guidance to employers in every step of alternance recruitment. Found all over France, local Point A branches give dedicated advice to employers who are interested in offering alternance employment.

Several institutions provide advice regarding the possible methods of alternance training: council chambers, neighbourhood youth centres, PAIO and, of course, Pôle Emploi are active in assisting an enterprise in the recruitment process.

The institutions involved in alternance training are also local actors in the orientation of the scheme and a source of information for recruiters.

Uncomplicated administration procedure for employers

So as to make the administrative formalities for the registration of alternance contracts easier, the Ministry of Employment has recently made several online tools available to employers on a state run internet site.

A potential employer can now download the required recruitment documents and register on-line the necessary forms.

French Employment Grants

An “alternance” contract is one under which a new worker, usually a person who is young or inexperienced (or both), combines working in the subject industry to gain practical experience with a vocational training course. This is a very attractive option for those businesses which are on the lookout new recruits. Additionally, the education of an employee in alternance also entitles the employer to avail of several financial supports and exemptions. These benefits are dependant on the type of contract concerned and the form of alternance training proposed.

Alternance training contract subsidies

First employee subsidy

A small business is entitled to a subsidy when hiring their first employee. This is not restricted to any particular sector or business. The subsidy ranges from €1,000 – €4,000.

The employer received the subsidy at the end of each quarterly period at a maximum rate of €500 per quarter.

1. Social security contribution exemptions
   This form of subsidy is applicable to all enterprises provided that they are party to an apprenticeship contract in the current calender year. They apply to social security contributions paid on the apprentice’s wage, employer and employee payments, unemployment insurance and national insurance.
   The exemptions can apply during the complete period of the apprenticeship contract.
2. Apprenticeship tax reduction
   Currently there are 3 types of tax deduction that may apply to apprenticeship tax: in-kind donations, training costs, and what is known as the “bonus alternants”.
   Regarding the price of training organised in a professional environment, the deduction is set at a maximum of 3% of the total amount of tax payable. Therefore the daily rates of formation costs are fixed at:
   • Category A = €25
   • Category B = €36

   In-kind donations may be deducted from the amount which is due out-of-quota.
   Finally, the “bonus alternant” is relevant only to those businesses which employ at least 250 workers. In addition, a minimum of 5% of said workers must be apprentices, and a maximum of 7% be employed under alternance contracts.

3. Tax credit for apprenticeship training
   This tax credit is evaluated based on the average number of apprentices per annum and applies for the first 12 months or for the training cycle of the apprentices.
   This form of credit is for the benefit of businesses which are taxed on actual profits, together with exempt businesses, which offer contracts of apprenticeship that include diplomas or similar professional qualification, e.g. a higher technician’s diploma, or a university level degree from a national registry recognised institute of technology.
4. Subsidies relating to the recruitment of disabled apprentices:
   Agefiph presently provides two forms of aid to encourage employers to hire disabled people under apprenticeship contracts:
   • Subsidy concerning the signing of apprenticeship contract.
   • Subsidy for the continuation of contract post-apprenticeship.

   These subsidies are designed to help disabled people to obtain a professional qualification. The level of subsidy available is dependant upon the type and length of the contract.

5. 45 + years jobseeker subsidies
   This subsidy is available from the Pôle Emploi and applies to all businesses which have entered into professional training contracts.
   These businesses are required to have hired a jobseeker aged 45 years or older under a either a fixed-term or permanent contract. The person involved must not have been part of the workforce of the enterprise during the 6 months immediately prior to the commencement date of the contract. The subsidy has an upper limit of €2,000 and should be paid in two parts, conditional on the fact that the contract still be in vigour at the conclusion of its 10th month.
   This can be claimed in addition to the subsidy provided for employing jobseekers who are aged 26 years and over. The total amount available is therefore €4,000.
6. Standard Pôle emploi subsidy for 26+ year old employees
   This subsidy is available from the Pôle Emploi and concerns any business that offers professional training contracts.
   These businesses are required to have hired a jobseeker aged at least 26 years under a fixed-term or permanent contract. In addition, the person concerned cannot have been part of the workforce of the employer business during the six month period before the commencement date of the contract. The maximum limit of the subsidy is €2,000 and is paid in two parts. This is conditional on the fact that the contract is still in place at the end of its tenth month.
   This can be added to the subsidy available for hiring jobseekers aged 45 years or more under a professional training contract.
7. Regional subsidy
   The regional subsidy concerns enterprises which employ fewer than eleven people when they offer an apprenticeship contract.
   It is worth a minimum of €1,000 per year of training. This bonus operates in addition to the aforementioned subsidy for the recruitment of a 1st or additional apprentice.
8. Recruitment subsidy for small to medium sized businesses
   This grant is aimed at small and medium sized businesses, i.e. those of fewer than 250 employees, and which offer salaries of up to 1.3 times the minimum wage.
   As a minimum, the enterprise must employ one person under a professional training contract of no shorter than 6 months. The said apprentice must have been hired no later than June 30th 2017.
   The subsidy is worth €500 each quarter up to a maximum of 2 years, i.e. a total of €4,000.
9. Young apprentice subsidy for small businesses
   This is a flat-rate state grant for businesses of fewer than 11 employees. To claim it, an enterprise must employ an apprentice who is less than 18 years of age.
   This subsidy is worth €1,100 every quarter during the apprenticeship contract.

About the Author

The author of this article, Eoin P. Campbell, is an honours law graduate (LL.B) and qualified as a solicitor in 2007. His professional experience includes personal injury litigation, business law, the law of contract, employment law and European law. Eoin is currently lecturing in the law faculty of a prestigious university based in Lyon, France.

N.B. Please note that the information contained in this article is intended to be advisory only. If you intend to commence employing people in France you are advised to discuss the issues raised above and any concerns you may have with an employment professional.