France

A. Hiring of employees (onboarding)

Mandatory employer requirements

When employing an individual in France, the following formalities need to be adhered to:

• The employer must fill out a pre-hiring declaration form for newly hired employees (“déclaration préalable à l’embauche”);
• When hiring its first employee, the employer must inform the French labor administration (“Inspection du travail”) about it;
• The employer has to register the company with the complementary pension funds (“retraite complémentaire”);
• The company has to acquire healthcare insurance (for medical expenses) and a provident insurance (for the risk of death, invalidity and incapacity) that complies with the specific provisions of French law and of the applicable collective bargaining agreement (if any);
• The full names of all employees have to be recorded in the staff register (“registre du personnel”); and
• When hiring a non-French employee (excluding European nationals), the necessary immigration formalities must be completed.

Introducing internal regulations is compulsory for companies employing at least 50 employees for 12 consecutive months.

Probation periods

The employer may stipulate a probation period in the employment contract. Its duration may be freely fixed by the parties within certain limits provided by the Labor Code and the applicable collective bargaining agreement. Standard probation periods are two months for office and blue-collar workers (“employés et ouvriers”), three months for supervisors and technicians (“agents de maîtrise et techniciens”) and four months for executive employees (“cadres”).

The trial period may be renewed once by mutual agreement of the parties, wherever allowed by the collective bargaining agreement.

The employment contract may be freely terminated by the employer or employee without any special procedure (apart from an obligation to give notice, the length of which depends on the period of presence of the employee) during the probation period, unless:

• The collective agreement provides for a special procedure;
• The termination is related to a fault committed by the employee (disciplinary procedure applies); and
• The termination of the contract concerns a protected employee (authorization of the labor inspectorate is compulsory).

If, at the end of the probation period, the employee and his employer are satisfied, their contract continues on a definitive basis without any formalities being necessary.

NB: The above probation/ trial period (“période d’essai”) must be distinguished from the probationary period (“période probatoire”) which may be used when an employee already works for the employer but wants to try a new role, to assess the ability of the employee to perform their new duties. To be applied, such procedure must be provided by the employment contract of the employee.

Hiring checks

Medical examination
Each new employee must pass a medical examination (called “visite d’information et de prevention”) within three months from the date of hiring, and this must be reviewed at least every five years (more often in some circumstances such as pregnancy or if the employee is exposed to specific risks).

A mid-career medical examination has been introduced by law, entered into force as of the 31st March of 2022 in order to establish a review of the situation of the employee's work position and state of health. The purpose of the examination is also to bring awareness to the employee of the challenges of aging at work and the prevention of occupational risks. The deadline for the examination will be determined by industry-wide agreement or, in the absence of industry-wide agreement, during the calendar year in which the employee turns 45.  The specific conditions of this examination shall be specified within the coming months.

Criminal background check
Criminal background checks can be permissible for specific functions where it concerns a legal requirement for hiring. In practice, employers often ask for a certificate called “extrait de casier judiciare bulletin n°3” showing the most serious convictions. Such a certificate can only be perused by the employer; a copy cannot be kept in the personnel file.

Reference and education checks
From a General Data Protection Regulation (GDPR) and French legal HR data protection perspective, the employer located in France may ask an applicant to provide information directly or through a third party to the extent that such information is necessary to assess the applicant’s professional capacities that have a direct link with the position and the employee’s skills.

This means background checks in France are limited to the strictly necessary verifications of a candidate’s qualifications, experiences, and references.

Diversity & inclusion

Hiring process
Any individual applying for a job must not be subject to any form of discrimination (directly or indirectly) against them based on sexual orientation, gender, age, family situation  including pregnancy), genetic characteristics, economic vulnerability, race or ethnicity, nationality, political ideas, trade union activities, religion, physical appearance, family name, home place or bank domiciliation, health situation (including disability), or spoken language.

Individuals applying for a job must not be subject to any discriminatory measure against them for having suffered from sexual or moral harassment. Moral harassment against job applicants is also prohibited.

Employment period – general comments
Employees may not be subjected to any form of discrimination (directly or indirectly) against them based on sexual orientation, gender, age, family situation (including pregnancy), genetic characteristics, economic vulnerability, race or ethnicity, nationality, political ideas, trade union activities, religion, physical appearance, family name, home place or bank domiciliation, health situation (including disability), or spoken language.

Employees may not be subject to any discriminatory measure against them for having suffered/refused to suffer from sexual or moral harassment.

Since March 21, 2022, the prohibition of discrimination also includes whistleblowers.

The prohibition of any form of discrimination applies to the whole employment relationship, i.e., disciplinary measures (e.g., dismissal), as well as salary increase, career development, exemption from certain benefits, etc.

The employer must also guarantee a principle of equal pay for men and women. In addition, companies with at least 50 employees are required, by 1 March every year, to publish an index relating to wage gaps between women and men (“index de l’égalité professionnelle”) within the company and, if applicable, to implement actions to eliminate these.

Types of employment contracts

Different types of employment contracts exist in France:

Open-ended employment contract (“contrat à durée indéterminée” or “CDI”)

Usually, employees are hired under open-ended employment contracts, which in principle does not require any particular form. Any non-written employment agreement is considered to be an open-ended contract of employment.

In practice, the agreement is generally formalized in writing so that the parties both know and accept the terms and conditions of employment, and the employer can add specific clauses like a probation period and, if relevant, a non-competition clause. In addition, the collective bargaining agreement applicable to the activity of the company may contain a certain number of provisions that must be included in the employment contract and be applied in the employment relationship.

Fixed-term contracts (“contrat à durée déterminée”)

Employees may also be hired under fixed-term contracts, but only in a limited number of specific cases (e.g., mainly replacement of absent employees and temporary increase of activity). The non-compliance with applicable rules can lead notably to the requalification of the fixed-term contract as an open-ended one. The fixed-term employment contract must be set out in writing and must include specific mandatory provisions (notably specification of the grounds for recourse to a fixed-term contract). If some of these statutory provisions are not included, the contract may be qualified as an open-ended employment contract. Also, the duration of a fixed-term employment contract is in principle limited to 18 months (potential renewals, that are limited to two, included).

Specific rules for executives

Some specific rules are applied to executives (“cadres”) on various items: probation period, notice period, working time arrangements, salary, etc.

For example, some employees can be considered as top executives (“cadres dirigeants”) when they meet several requirements. According to French law, employees who can be considered as top executives are those who are defined as (i) being entrusted with responsibilities of such importance that this implies a large independence in the organization of their working time; (ii) are empowered to make decisions in a largely autonomous manner; (iii) earning a remuneration within the highest ones in the company; and (iv) participating in the strategical orientation of the company. When employees meet these conditions, they are not subject to all working time legal provisions, in particular those related to daily and weekly rest period, maximum working time and overtime. However, as for other employees, they may not work while on holidays.

Language requirements

Contracts of employment must be drafted/drawn up in French.

Where the employment contract concerns a position that can only be designated by a foreign term without any equivalent in French, the contract must contain a French explanation of the foreign term.

Where the employee is a foreigner and the contract is established in writing, a translation of the contract into the employee’s native language is drafted at the employee’s request. Both versions are equally legally valid. In the event of a discrepancy between the two versions, only the text drafted in the employee’s native language may be invoked against him or her.

According to Article L1321-6 of the French Labor Code, other documents must be drafted in French such as internal regulation, and more generally, any document that (i) imposes obligations on employees; and/or (ii) contains provisions essential to the performance of the employees’ work. If these requirements are not fulfilled, the document is not enforceable in court. However, this requirement is not applicable to:

• Foreign employees: such documents may also be drafted in their native language; and
• Documents received from abroad, provided that the employees understand them perfectly.

Equal pay

According to the general principle of "equal pay for equal work" which was established by a landmark French Supreme Court ruling in 1996, an employer is obliged to ensure equal pay for all employees, provid-ed that the employees in question are in the same situation.

Although there are no general provisions on equal treatment of employees codified in the French Labor Code, the legislator has introduced specific provisions to protect certain categories of employees whose precariousness and vulnerability make them particularly exposed to inequalities:

• Equal pay between employees on permanent contracts and employees on fixed-term or temporary contracts when they perform the same functions and have an equivalent qualification;
• Equaly pay between full-time employees and part-time employees with qualifications and equal seniority;
• Equal pay for men and women;

Regarding equal pay for men and women, every employer is required to ensure equal pay for equal work or work of equal value for women and men:

• Work of equal value means work that requires employees to have a comparable set of professional knowledge or abilities:
• Knowledge may be validated by a title, a diploma or professional practice;
• Abilities may be inferred from experience, responsibility, or physical or nervous strain associated with the job.

Remote work

Definition: The French labor code defines remote work (or telework) as a professional activity carried out in whole or in part outside the company's premises at the request of the employee or the employer. The teleworker employee benefits from specific guarantees.

Implementation of telework: Telework can be set up within the framework of a collective agreement or of a charter drawn up by the employer. If the employer chooses the way of the charter, the SEC (social economic committee) must be consulted.

In the absence of a charter, the employee and employer could still agree to resort to telework, but they are required to formalize (by any written means - and not necessarily by an amendment to the employment contract) this agreement.In practice, we can note that the most common practice is to set up teleworking by drawing up a charter.

However, regardless of the option chosen, an employee can always refuse to telework. Indeed, whether it is in the framework of a charter or an agreement by any means, telework is voluntary.

Nb: In exceptional circumstances (e.g. threat of epidemic), telework can be imposed without the employees' agreement. This provision also applies in cases of “force majeure”. These measures can be taken to allow the continuity of the activity and to guarantee the protection of the workers. The employer must inform the SEC of his decision without delay and then consult it as soon as possible.

Compensation of telework: Under French law, the Employer must in principe cover telework-related costs:

• It is the company's responsibility to cover the expenses incurred by the employee for the needs of his professional activity and in the interest of the company, after validation by the employer.
• The French Supreme Court has also raised the general principle according to which the expenses that an employee proves to have incurred for the needs of his professional activity and in the interest of the employer must be reimbursed, without being able to be deducted from the remuneration due to him.

In practice, the obligation of the employer to cover the telework-related costs can be fulfilled in two ways:

1. Reimbursement of professional expenses incurred as a result of teleworking on the basis of their real value (as shown by receipts produced by the employee); or
2. Payment of a fixed allowance to the employees, depending on the number of days teleworked (subject to certain ceilings, this allowance is presumed exempt from social security contributions, i.e. no document/proof to submit to the administration).

In addition, pursuand to French case law,  the payment of a home occupancy allowance is required if no professional premises whatsoever are made available to the employee (this allowance is calculated on the basis of the surface of the employee’s home used for telework purposes).

Paid leave

In France, all employees are entitled to paid leave each year, regardless of the nature of their employment contract.

In principle, employees earn 2.5 working days per month of actual work for the same employer, up to a maximum of 30 working days, unless there is a more favourable collective agreement. The employee's entitlement is calculated on the basis of periods of actual work (i.e. periods actually worked in the company (including the trial period and notice period) during a reference period.

Unless there is a collective agreement, the period during which paid leave is earned runs from 1 June of the previous year to 31 May of the current year.

Certain absences are treated as equivalent to actual work (e.g. maternity leave and, since a French law passed on 22 April 2024, time off work due to non-occupational illness).

In the absence of a collective agreement, all employees may take paid leave between 1 May and 31 October each year.

B. Termination of employees (Offboarding)

Kinds of dismissal

There are two kinds of dismissal in France:

• Dismissal for individual reasons (“licenciement pour motif personnel”), for example a dismissal for misconduct (“licenciement disciplinaire”) or for professional insufficiency. This includes also dismissals for serious and gross misconduct.
  • Serious misconduct (“faute grave”) entails that the termination of the employment contract must occur immediately, as it is deemed inappropriate that the employee remain within the company during the notice period.
  • Gross misconduct (“faute lourde”) is deemed to have occurred when the employee has behaved with malice.
• Dismissal based on economic reasons (“licenciement pour motif économique”), is dismissal for reasons, unrelated to the person dismissed, and which results from job cuts, a job transformation or a substantial change in the employment contract refused by the employee, due, in particular, to economic difficulties, technological changes, the necessity of safeguarding the company’s competitiveness, or the definitive suspension of the company’s activities in France.

Pursuant to a French law dated 8 August 2016, the French Labor Code specifies that economic difficulties are characterized by the significant alteration of at least one economic indicator, such as a decline in orders or in turnover, operating losses, a deterioration of cash flow, a deterioration of EBITDA (earnings before interest, taxes, depreciation and amortization), or any other element proving these difficulties.

A significant decline in orders or turnover is deemed to have been established when the duration of this decline is, as compared to the same period of the previous year, equal to at least (i) one quarter for a company with less than 11 employees; (ii) two consecutive quarters for a company with at least 11 but no more than 50 employees; (iii) three consecutive quarters for a company with at least 50 but no more than 300 employees; and (iv) four consecutive quarters for a company with 300 employees or more.

Dismissal motivation

Any kind of dismissal must be based on real and serious reasons (“cause réelle et sérieuse”). Otherwise, the dismissal will be deemed unfair by the labor court and the employee concerned is entitled to damages.

In order to be deemed to rest on real and serious reasons, the facts raised by the employer must be accurate, specific, objective and serious.

Notice period

In principle, when a permanent employment contract is terminated at the employer’s initiative, a notice period (“préavis”) must be observed by the employee. In practice, the employer may decide to release the employee from performing this notice period with the payment of an indemnity in lieu of notice.

The indemnity in lieu of notice is equal to the gross salary, subject to payment of social security contributions by the employer, which the employee would have received if he had worked during the notice period (including benefit in kind, bonus, allowances, as well as paid leave/rest days allowances).

However, as an exception, French law provides that no notice period is to be observed in case of dismissal for serious or gross misconduct (“faute grave” or “faute lourde”).

Duration of notice period:

Different notice period durations may also be provided for by the collective bargaining agreement, the employee’s contract of employment, or the company’s custom. The duration of notice periods provided by collective bargaining agreements usually depends on the employee’s status (executive level status or employee-level status) and the employee’s seniority.

The duration provided by the law is therefore the one to be applied, unless one of the sources listed above provides for a more favorable duration for the employee.

Severance pay

Severance pay (“indemnité de licenciement”) is set either by law, the collective bargaining agreement or the employee’s contract of employment.

Under French law, severance pay is due only to employees having at least eight months of seniority.

As an exception, French law provides that no severance pay is due for employees dismissed for gross or serious misconduct (“faute grave” or “faute lourde”).

Amount of a severance pay:

French law provides that severance pay amounts to one quarter of the monthly salary for each year of seniority up to 10 years, and to one-third of the monthly salary for each year of seniority in excess of 10 years.

The salary to be taken into consideration for the calculation of the severance pay is:

• One-twelfth (1/12) of the gross remuneration of the last 12 months preceding the dismissal (where the length of service is less than 12 months, the average monthly remuneration for the months preceding the dismissal must be used); or, if this is more advantageous for the employee; and
• One-third (1/3) of the gross remuneration of the last three months, it being understood that, in this case, any annual or exceptional bonus or gratuity paid to the employee during this period will only be taken into account up to an amount calculated pro rata temporis.

If different severance pay is stipulated by the applicable collective bargaining agreement or the employment contract, the amount most favorable to the employee will apply.

Dismissal formalities

Form of dismissal

All dismissals must be notified in writing to be valid.

The dismissal letter must specify the reasons for dismissal and must be served to the employee by registered letter with acknowledgement of receipt.

The recent French Labor Reform (decree dated 29 December 2017) provides for the possibility for the employer to use a pre-filled form with a reminder of the rights and obligations of each party, as well as all mandatory information provided by the French law.

Further requirements for a valid dismissal

A specific procedure must be observed in order to dismiss an employee. The employer must comply with the following procedure in the case of dismissal for individual reasons (further and specific rules apply in the case of dismissal for economic reasons, as well as when the dismissal concerns protected categories of employees):

• The employee to be dismissed must be invited by the employer to attend a preliminary meeting by registered letter with acknowledgement of receipt (or delivered by hand against receipt). A period of five working days must be respected between (i) the first presentation of the invitation letter by the French postal service at the employee’s home (or the date on which the employee accepts the letter by hand); and (ii) the date of the preliminary meeting.
• The invitation letter must inform the employee that he/she may be assisted by an employee of the company during the preliminary meeting. Should the company not have any staff representatives, the employee may also be assisted by a person of his/her choice registered on a specific list established for this purpose by the departmental “Préfet”.

• During the preliminary meeting, the employer must clearly inform the employee that his/her dismissal is under consideration and the reasons for the dismissal.
• The employee must then be notified of the dismissal by registered letter with acknowledgement of receipt. A period of at least two working days must be respected between the preliminary meeting and the serving of the notice of dismissal. In the case of dismissal for misconduct, the notice of dismissal must be served no later than one month from the preliminary meeting.
• Since the recent French Labor Reform (decree dated 15 December 2017), the employee is entitled to request, by registered letter with acknowledgement of receipt (or delivered by hand against receipt), further clarification as to the reasons for dismissal within 15 days following the notification of the dismissal, the employer having 15 days to respond from the reception of the employee’s request, also by registered letter with acknowledgement of receipt (or delivered by hand against receipt). Moreover, the employer may, of its own initiative, also provide further clarification as to the reasons for dismissal within the same period of 15 days and in the same form.
  

Special dismissal protection

Under French law, a special protection from dismissal is principally provided to the following employees (principal examples, but other cases exist):

• Staff representatives;
• Former staff representatives;
• Former candidates to the last staff representatives’ elections;
• Employees appointed by a trade union to negotiate a company collective bargaining agreement;
• Employees appointed from the company (judges presiding over the Labor Court, assistants to employees during preliminary meetings prior to dismissal, administrators for social security organizations);
• Pregnant women;
• Disabled employees; and
• Employees elected to local, national or EU elections.

For these employees, a specific procedure must be implemented in the case of dismissal. In particular, prior authorization from the French administration is required in the case of such dismissals.

Legal means of employees

• Should an employee consider that his/her dismissal is not based on real and serious reasons, he/she may claim damages for unfair dismissal (“licenciement sans cause réelle et sérieuse”) within 12 months of the notification of dismissal.
  
  Since 23 September 2017, the French Labor Code provides for a statutory fixed scale of damages, i.e., with a minimum and maximum amount to be awarded to the employee depending on (i) his/her seniority within the company; and (ii) the size of the company (+/- 11 employees):
  • The amount determined by the judge within the scope of this statutory fixed scale will depend on the loss suffered by the employee.

This table also provides a framework in case of negotiations to conclude a settlement agreement.

• Should an employee consider that the employer has not complied with the legal requirements regarding the dismissal procedure, he/she may claim damages for unlawful dismissal (up to one month of salary).
• French law provides that a judge may deem a dismissal null and void only in situations expressly provided by law or when a fundamental freedom (“liberté fondamentale”) has been breached. A dismissal can notably be annulled if it is based on the employee’s pregnancy, status as staff representative, participation in a strike or on discrimination.
• Should the employee’s dismissal be deemed null and void, the employee may be reinstated. If the employee’s reinstatement within the company proves impossible, or if the employee does not wish to be reinstated, he/she is entitled to higher damages (i.e., at least six months of salary irrespective of the employee’s seniority and the headcount of the company).

Specific rules for executives

If executives are employees, the labor law rules apply to them. Some specific provisions could be applied to them (severance pay, notice period, dismissal procedure in case of individual economic dismissal, etc.).

Entitlements of self-employed executives are fully regulated by their contract as well as the company code, company by-laws or their appointment, should they be holding an office within the company.

Collective dismissals

Specific procedures are applied in case of collective dismissal for economic reasons. Economic dismissal requires a specific formal procedure, which is chiefly more complicated than the procedure to be followed in case of personal dismissal.

This procedure varies depending on the number of employees concerned by the economic dismissal, the company’s headcount and the presence of employee’s representatives. In particular, there is a specific procedure to follow when:

• The dismissals concern fewer than 10 employees (between two and nine employees) over a period of 30 days;

• The dismissals concern more than 10 employees over a period of 30 days: a specific burdensome procedure must be implemented, which implies, for companies of at least 50 employees, to set up a job protection plan (“plan de sauvegarde de l’emploi”).
  

Get in touch
 

Malik Douaoui
France
mdouaoui@avocats.deloitte.fr | +33 1 40 88 25 26