Summary of the Club Delville Breakfast on the September 22, 2017 Ordinances with Anna-Christina Chaves – March 8, 2018

Delville Management, a premium transition management firm, hosted at Club Delville: Anna-Christina Chaves on the topic: "The Ordinances of 22 September 2017"

A complex equation to solve

When they were introduced, the ordinances of 22 September 2017 attempted to resolve a particularly complex equation: with an unemployment rate of 10%, 47% of jobs set to disappear due to digitalisation, and only 1% of companies with more than 50 employees capable of engaging in collective bargaining, the existing system was showing its limits. Anna-Christina Chaves explains how France's labour law reform is profoundly reshaping the social landscape.

Moderating labour law

While labour law was perceived as anxiety-inducing by investors — particularly foreign ones — "its moderation is a strong signal sent by the ordinances," says Anna-Christina Chaves with satisfaction.

The first change concerns statutory redundancy pay, slightly increased in exchange for a cap on compensation for dismissals without genuine and serious cause. In practice, the change is not so notable, as indicative scales had already existed since the El Khomri Act, which were themselves based on industrial tribunal practice. For Anna-Christina Chaves, the real shift went almost unnoticed: formerly, in the event of invalidity due to an insufficient Job Protection Plan (PSE), the penalty amounted to at least 12 months' salary. The good news is that the ordinances have halved this amount, correspondingly reducing provisions.

The new hierarchy of norms and the introduction of a right to make errors for companies represent two notable advances. "Finally, substance should prevail over form in labour law," announces Anna-Christina Chaves. The courts are now largely kept at bay: limitation periods are more tightly regulated, and judges are given the option of adjusting the timing of their decisions, including by taking a company's financial health into account. "The objective of the ordinances was to ease concerns, and these provisions are a step in the right direction."

Modernising the framework for work

It was certainly necessary to adapt the Labour Code to our service economy, but do the ordinances rise to the challenge? While the pooling of human, intellectual, and technical resources between start-ups and large groups represents a genuine innovation, Anna-Christina Chaves qualifies the impact of another flagship measure: "The provisions on remote working are in line with the evolution of working practices in France, but further steps will be needed."

Another key element of the ordinances, the transparency brought by the digitalisation of the Labour Code risks generating far more difficulties than it resolves, since both parties will now be deemed to be acting in good faith. "As legal practitioners in labour law, we know that a standard is subject to interpretation, particularly in light of case law. As a result, similar information could be interpreted in contradictory ways."

The single representative body is nonetheless, in her view, a significant step forward, as it will bring together stakeholders with a 360-degree knowledge and understanding of the company. "It finally creates the opportunity to negotiate, in one place and at one time, what is economically viable and what is socially desirable." The stated objective is to improve social dialogue, since the effectiveness of the measures will depend on its quality: "everything can change, but if everyone is not on board, nothing will change. It is up to HR to innovate and reclaim genuine social dialogue within the company."

Fewer economic dismissals and more restructurings

The government's stated ambition is to make economic dismissals as flexible as possible in order to make them more business friendly. As a guarantee of "flexicurity", companies now have 3 tools available to restructure without necessarily resorting to economic dismissal. Collective performance agreements, for example, allow for a sui generis dismissal in the event of an employee's refusal to accept changes to essential elements of their employment contract. The much-publicised collective voluntary departure scheme requires a majority agreement and 100% voluntary departures, unlike a Job Protection Plan. Finally, the mobility leave becomes a fully-fledged workforce management tool.

For Anna-Christina Chaves, this "arsenal of measures is innovative and represents genuine progress, but its effects will depend on the quality of social dialogue and the ability to negotiate majority agreements within companies."