Among the innovations brought about by the so-called Labor Ordinances, the possibility of setting up a collective bargaining agreement is of concern to company managers and human resources departments.
I am therefore writing this article with the aim of providing answers to the most common questions I am asked about this new device.
What is the collective bargaining agreement ?
It is a new method of amicable termination of the employment contract.
Companies looking to cut jobs, without considering economic layoffs, will be able to offer a collective bargaining agreement to employees.
The contract of voluntary employees will then be terminated by mutual agreement.
Is the collective termination agreement composed of a set of individual termination agreements ?
The terminology “contractual termination”, which is already known and very successful, has been used, no doubt for marketing reasons.
However, these are two independent systems.
The rules concerning the collective bargaining agreement have been inserted in a section of the French Labor Code entitled “Termination by mutual agreement within the framework of a collective agreement”, in the articles L. 1237-19 to L. 1237-19-14.
Which companies can resort to the collective bargaining agreement ?
In my opinion, only companies with one or more union delegates can use this mechanism.
The articles of the French Labor Code on the collective agreement do not specify this, but merely refer to a “collective agreement”. However, the Ordinance provides that ” the rules of validity of the agreements referred to in Article L. 2232-12 of the French Labor Code are applicable to collective agreements on collective conventional termination” (Ord. 2017-1387 du 22-9-2017 art. 40, III). However, this article L. 2232-12 only concerns companies with one or more union delegates. This point will probably be subject to debate.
Is the collective bargaining agreement an alternative to economic dismissals ?
Be careful not to confuse or link the two mechanisms for job cuts.
The collective bargaining agreement can only be implemented if no redundancies are envisaged. The French Labor Code uses the following formula : “Collective agreement excluding any dismissal in order to achieve the objectives assigned to it in terms of job cuts.” (art. L. 1237-19)
In other words, the collective bargaining agreement must not be offered under the threat of economic dismissal in case of refusal.
Employees must therefore have a real choice.
What must be included in the collective agreement providing for the collective termination of employment ?
The French Labor Code sets out a list of items that must be included in the agreement.
In summary, the main purpose of the collective agreement is to determine the terms and conditions for the use of the collective termination agreement in the company concerned (maximum number of departures envisaged, conditions that employees must meet in order to benefit from it, guaranteed termination indemnities, application procedures, etc.).
The severance payments provided for in the agreement may not be less than the legal severance payments.
The agreement must be validated by the DIRECCTE before it can be applied.
Do the employees benefit from the provisions relating to economic dismissals ?
The French Labor Code provides that the provisions relating to economic dismissals do not apply to the contractual termination of employment (art. L. 1233-3 paragraph. 15 of the French Labor Code.). Employees therefore do not have access to the job security contract (CSP), to redeployment, etc.
Two analogies with the procedure for dismissal for economic reasons can nevertheless be established :
- The tax exemption provided for economic dismissal indemnities should be applicable to indemnities paid during a collective bargaining agreement, according to the 2018 finance bill. This would be an important incentive to use this device.
- The agreement on the collective bargaining agreement must include support measures for employees to enable them to find new employment outside the company. However, this does not mean redeployment to another available position within the company, as is known in the context of redundancy procedures for economic reasons. This would make no sense in a system whose objective is to allow companies to reduce their workforce.
How are the terminations of employment contracts formalized?
The code does not specify this. The collective agreement does.
Thus, employees interested in the collective bargaining agreement will apply and the termination of their contract will be formalized according to the terms of the collective agreement.
For protected employees, the termination is subject to the authorization of the labor inspector.
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Note that since December 2, 2019, collective bargaining agreement termination files are to be filed on the new portail RUPCO, which replaces the former PSE-RCC portal.
Also read on the blog and to be combined with the collective bargaining agreement : The collective performance agreement