French Government launches a new tool to avoid redundancies

France

Further to COVID-19, the risk of mass dismissals being implemented in the coming months and To maintain employment as much as possible the French government is implementing a new tool which purpose is to save jobs and allow companies to overcome current difficult economic situation.

When COVID-19 crisis occurred and French lockdown was enacted, French authorities have encouraged companies facing a massive drop of business to implement short-time work. Through this mechanism, employees’ working time was reduced and their employer was receiving state subsidies for unworked hours. Now that the lockdown has been lifted, companies are resuming their activities and employees are going back to work.

However, business is not coming back and companies are already foreseeing difficult times. Back to normal will take time.

To limit the risk of mass redundancy, the French government wants to implement a new tool enacted by a Law dated17 June 2020: the Extended Short-Time Work Program (in French, the “APLD” acronym is used for “Activité Partielle Longue Durée”).

This is a new form of short-time work. it does not supersede the existing short-time work system but comes in addition to address the specific situation of companies in need of reducing their employees’ working time until they are back on track.

This new program is to enter into force on July 1st, 2020 and last until 30 June 2022.

Its purpose is to maintain employment in companies facing a durable reduction in activity, which is not likely to jeopardize their future.

Employers being allowed to implement this type of program will receive state subsidies for unworked hours. The level of state subsidies will be higher than in current “standard” short-time work.

How to implement this program?

This new form of short-time work can be implemented:

  • By collective agreement

In this case, it is negotiated with trade unions or staff representatives at company, site or group level

The agreement must be preceded by a prior diagnosis and forecasts in terms of activity and employment must be shared with representatives.

  • By unilateral document 

In this case, the document must comply with a national wide agreement and requires the prior consultation with the Works council. Here again a prior diagnosis must be conducted and forecasts in terms of activity and employment must be shared with representatives.

For how long?

The program is to last 6 months renewable with a maximum of 2 years.

French Government launches a new tool to avoid redundancies

Which contents?

The agreement or unilateral document must provide for:

  • The Duration of the program
  • The targeted activities and employees,
  • The reduction of working time to be compensated (maximum reduction of 40% per employee).
  • The specific commitments taken in consideration, inter alia in terms of job maintenance and also possible reduction of the headcounts.
  • The monitoring of the program.

A Decree is to be published to give more details on this.

Next step?

To be enforceable and for the employer to be eligible to state subsidies, the agreement or unilateral document will have to be reviewed and accepted by the Labor administration.

If the collective agreement route is chosen, the scope of control will be rather limited, and the decision will be granted within 15 days. In case of unilateral document, control will obviously be deeper and the Labor authorities will have 21 days to endorse the document. In both cases, the absence of response of the labor authorities at the end of the 15 or 21 days amounts to positive decision.

The law is not finalized yet, and we are waiting for the final draft of this new tool.