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How are the 2017 French employment reforms working in practice?

Written by
Capstan Avocats, the law firm setting the benchmark for labour law in France.
An evaluation committee has released its report on the impact of President Macron’s 2017 employment law reforms.

The ‘Macron ordinances’ of September 2017 implemented a package of reforms for the President’s term in office in the field of labour law. As soon as they were adopted, an evaluation committee was appointed to measure, over time, the real impact of these reforms and their effectiveness.

After four years of implementation, in a report published on 16 December 2021, this committee reported on the lessons identified at this stage of implementation and on trends in practice.

Three key lessons emerge from this report, set out below.

Shift to collective bargaining

One of the main objectives of the 2017 ordinances was to accelerate the transfer of labour standards from the law to collective bargaining (particularly at company level, keeping it as close to the ‘ground’ as possible).

Tools have been put in place to support this movement, but with what results? An analysis of the figures confirms a degree of effectiveness of the reforms.

Two observations are particularly worth highlighting:

1. An acceleration in the conclusion of collective agreements in companies with less than 50 employees

Until now, the systems of derogatory negotiation (i.e. collective agreements concluded without trade union delegates) struggled to find their place. If we combine the agreements concluded with elected representatives or mandated employees and those resulting from direct ratification by two thirds of the employees, the number of these (excluding employee savings agreements) has increased fivefold between 2017 and 2020.

2. The success of ‘collective performance agreements’

The number of collective performance agreements (CPAs, formerly known as competitiveness agreements) has risen steadily since 2017, with a cumulative total of almost 900 agreements concluded.

All too often people talk about the failures of this type of negotiation; however, the figures published show that these measures have found their place in the employment landscape. The volume of CPAs concluded bears witness to a maturity of social dialogue in a number of companies in France that should be highlighted.

Overhaul of employee representation

A second objective of the 2017 ordinances was to simplify and strengthen social dialogue, in particular by overhauling the employee representation (instances representatives du personnel, IRP) landscape. The merger of various representative bodies was the key measure of these reforms. It aimed to avoid a multiplicity of bodies with overlapping prerogatives and to provide employee representatives with a more complete and transversal vision of the issues addressed.

To date, it has not been possible to obtain data to quantify the impact of these reforms on the overall number of elected representatives. It is undoubtedly in medium-sized and large companies, where employee delegates were added to the elected members of the works council and the CHSCT, that the reduction may have been greatest according to the report.

Merging representative bodies has automatically led to a reduction in the number of meetings. These meetings are less frequent overall, which is in line with the objective of simplifying representation. On the other hand, they are generally much longer, with denser agendas.

There is no doubt that more balanced operating methods need to be found. They exist, but they must now be better adapted to each environment. The 2017 measures offer a degree of flexibility that has not yet been fully explored…

Increased clarity in labour disputes

The third objective was to make the rules governing the employment relationship more predictable and more secure for both employers and employees.

The most emblematic measure was the introduction of a compensation scale in the event of labour court disputes (the famous ‘Macron scale’). We will not go back over the heated debates over the adoption of this system and the discussions about its validity; this question has now been settled by the Court of Cassation (Cass., ass. plén., opinion no. 15012 and 15013 of 17 July 2019).

The figures produced by the evaluation committee confirm a decrease in the number of post-dismissal disputes. This development is part of a trend that had already been underway for many years and which had become more pronounced since the reform of the industrial tribunal procedure implemented in 2016.

In the words of the evaluation committee, it is difficult to measure whether the continuing decline in the volume of litigation brought before labour courts is the consequence of the 2017 ordinances.

The report notes that it is equally difficult to establish whether the increase in hiring observed since the 2017 ordinances is a consequence of the reform. The aim was to facilitate hiring by making the consequences (particularly the financial consequences) of a termination of employment more predictable.

According to the evaluation committee, the most objective data available shows that the vast majority of courts now give verdicts that apply the Macron scale strictly.

What the report does not say, however, is that strategies to circumvent the scale have been put in place. Since the 2017 ordinances, claims not covered by the scope of the Macron scale (discrimination, harassment, overtime, etc.) have become more common in litigation.

The evaluation committee has stated that its job is not over. It remains to be seen whether the 2017 reform will be overturned by new adjustments or a more profound reform of labour law in a few months, particularly given that 2022 is a presidential election year…

Arnaud Teissier
Partner - France
Capstan Avocats