Consultation processes and bargaining culture within French companies

April 2018 | EXPERT BRIEFING | LABOUR & EMPLOYMENT

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President Macron’s executive orders created a new employee representative body called the social and economic committee (CSE). The CSE merges three formers bodies: the employee delegates, the works council and the health and safety committee. Beyond the enforcement of this committee, president Macron’s executive orders also enable companies and unions to adapt consultation processes.

Furthermore, the reform enables the CSE to evolve into a company council, which has the attributes of the CSE, as well as the ability to negotiate collective bargaining agreements. The reform is intended to enable more strategic, concrete and less formal discussions around financial, economic and health & safety issues. Given the scope for discussion, the reform is a step toward rationalising social relations in France.

An opportunity to optimise consultation processes

The CSE is scheduled to come into effect when the former representative bodies’ mandates expire and at the latest on 31 December 2019. The CSE is then expected to become an employee representative body competent in all economic, financial, strategic, health & safety and work conditions matters.

Furthermore, the issues the CSE can deal with depend on a company’s headcount. If a company has fewer than 11 employees, the CSE has the power formerly held by the employee delegates body. If it has more than 11 employees, the CSE also wields the power of the works council and the health and safety committee. Whereas employers previously had to consult separately on works council and health and safety committee matters, now the CSE can consult on all subjects.

The only concession made by the government is that a health and safety commission has to be created if a company has more than 300 employees or if employees face specific risks. However, this commission is an emanation of the social and economic committee – it legally has neither proper consultancy attributions nor prerogatives. Some other commissions, or specific representatives, are also provided for by the reform, but they are all optional.

In the eyes of many, the CSE is already overly simplified. Time will tell whether the CSE facilitates or complicates the consultation process in complex organisations with more than 50 employees and several offices.

In addition, companies may be able to define consultation periods, the number of annual meetings, the scope of matters on which the CSE will be consulted and the time between consultations (which can be up to three years). They may also decide what information needs to be submitted to the CSE and organise the economic and social database (including access rights and implementation levels).

Reduced delegation hours and the broadly-criticised fact that only three successive mandates are allowed by law, are also negotiable through collective agreement. This gives employers room to manoeuvre in negotiations, in order to obtain agreements on key subjects.

A chance to implement co-decision in French companies

The reform has created a new optional body called the company council, which is intended to merge the power of the CSE with union representation. A company council needs to be implemented by a collective agreement.

Once created, the company council becomes the preferred interlocutor for all consultation matters, and has the power to negotiate and decide upon most company agreements. There are two advantages to this. First, the creation of a unique body may facilitate relationships which reduce opposition between workers representatives and union representatives. Second, this enables companies to negotiate collective agreements with all representatives, not only those who represent a union; without a company council, employers usually have to negotiate with unions which scored more than 10 percent of any vote.

By law, only unions may represent candidates in the first round of company elections, with only the second being open to all candidates. Thus, where the first round of elections fails to fill all seats, mainly because a majority of employees abstained due to them waiting for the second election, the second round may lead to the election of non-affiliated candidates. This may be of interest to companies in which employees refuse to elect union candidates. In such companies, the creation of a company council would enable collective agreements to be signed with work representatives elected at the second stage who, even though not affiliated to a union, may be more representative of employees’ expectations.

These company agreements can now derogate to branch-level agreements in most cases and the reform opens the door to a bargaining culture in French companies. Considering this flexibility, the French government decided that the collective agreement which implements the company council will define those issues in which an employer cannot make a decision without company council approval.

The scope of these matters is to be negotiated in the agreement and the law only stipulates one mandatory subject: professional training. In our view, this is not an inconvenient result of the system. As soon as a company makes a decision, implementation of the measure is directed toward employees, thus strengthening the value of the decision. This may also make representative mandates more attractive and renew social dialogue.

Grégory Chastagnol and Barbara Mollet are attorneys at Fromont Briens. Mr Chastagnol can be contacted on +33 (1) 4451 6380 or by email: gregory.chastagnol@fromont-briens.com. Ms Mollet can be contacted on +33 (1) 4451 6380 or by email: barbara.mollet@fromont-briens.com.

Grégory Chastagnol and Barbara Mollet

Fromont Briens