French ‘Labor Market’ Law Comes Into Force With First Decree of Application

The French "Labor Market" Act of December 21, 2022, which provides for emergency measures relating to the functioning of the labor market with the goal of reaching full employment, recently came into force.

A first implementing decree, dated January 26, 2023, specifies that the provisions apply to unemployed persons whose employment contract was terminated after February 1, 2023.

This decree introduces for the first time a variation on the duration of payment of the unemployment allowances depending on the state of the labor market. Therefore, if the unemployment rate is below 9% or if it has not increased by more than 0.8% in a quarter, the market will be considered favorable, and the duration of the payment of the allowances will be reduced by 25%. On the other hand, there will be no change from the current provisions if the market conditions are unfavorable.

QUITTING JOBS AND UNEMPLOYMENT ALLOWANCES

The reform provides that employees who voluntarily quit their position and do not return to work after having been given notice to justify their absence and to return to their position within a period set by the employer are presumed to have resigned at the end of this period. A decree will have to set the minimum duration.

Employees who challenge the termination of their employment contract based on the presumption of resignation may refer the matter to the Labor Court. The case would then be brought directly before the court, which rules on the nature of the termination and its consequences within one month from the date of referral.

This provision was deemed to be in conformity with the French Constitution, the Constitutional Council having recalled the case law according to which the quitting of a position cannot be voluntary if it is justified by a legitimate reason, such as medical reasons, the exercise of the right to strike, the exercise of the right of withdrawal, the refusal of the employee to carry out an instruction contrary to the regulations, or its refusal of an unilateral modification of an essential element of the employment contract.

The judge will therefore have to investigate the circumstances surrounding this quitting. It should be remembered that before the law of December 21, 2022, the employer could not consider an employee's prolonged absences as a resignation. It could only dismiss an employee for serious misconduct, after having given the individual notice to return to their post or to justify their absence. However, dismissal thus "forced" allowed employees to receive unemployment benefits even though they had not involuntarily lost their job. With the new provisions, employees who quit their job without a legitimate reason will be presumed to have resigned and will not be eligible for unemployment benefits. However, this presumption is simple and can be overturned before the labor courts.

Consequently, it is an area of concern that without technically quitting their jobs, some employees will cease to perform their required duties at work, such that the employer will have no choice but to dismiss them.

REFUSAL OF OPEN-ENDED JOBS AND UNEMPLOYMENT ALLOWANCES

The law now provides that when, at the end of a fixed-term contract or a temporary assignment, the employer offers the employee to continue the contractual relationship under an open-ended employment contract and the employee refuses the employer's offer, the employer informs Pôle Emploi of the employee's refusal of the offer. This refusal is only accepted if the offer is similar to the position the employee held under a fixed-term or temporary contract—i.e., it must be for the same or a similar job, at the same workplace, and with a salary, duration, and classification at least equivalent to the previous one.

Job seekers who have refused, during the last 12 months, two open-ended contracts following a fixed-term contract or a temporary employment contract, under the conditions mentioned above, will not be entitled to unemployment benefits unless they have been employed under an open-ended employment contract during the same period.

These provisions will have to be specified by decrees. At this stage, one may wonder about the information provided to Pôle Emploi by the employer: Will it be compulsory or simply possible? How will the two refusals of an open-ended contract be handled when the job seeker has, over the past 12 months, worked under a fixed-term contract and a temporary contract? What if the two refusals are motivated by objective reasons? A job seeker may indeed have accepted a temporary assignment in a sector of activity that does not correspond to their skills simply because they had no other opportunities. Should they be penalized if they refuse a permanent contract under these conditions?

ELECTIONS

The law contains a measure that is unrelated to the labor market but important for businesses. The law clarifies the rules regarding electorate and eligibility for professional elections. Regarding the electorate, the participation of all employees (including those who have functions that could assimilate them to the head of the company) is now affirmed subject to meeting the age and seniority conditions already provided for by the French Labor Code.

As far as eligibility is concerned, employees who have a written delegation leading them to be assimilated to the head of the company or who represent it before the social and economic committee (CSE) cannot be eligible, in accordance with the constant case law of the French Supreme Court. In other words, the executives of a company can now vote in professional elections but cannot be elected.