Court upholds some of the law’s requirements but deems provisions on sanctions to be unconstitutional.
The French Constitutional Court rendered an important decision on 27 March regarding the validity of the so-called “Florange” law, which was adopted by the French Parliament on 24 February 2014 in response to ArcelorMittal’s 2013 closure of the Florange blast furnace in northeast France.
The main measure of this law is the requirement that companies employing more than 1,000 employees in France and/or Europe must research a purchaser in the event that the company contemplates closing a profitable site thatcould potentially lead to a redundancy exercise.
According to the last version of the law adopted by the French Parliament on 24 February, when a company contemplates closing a site in France under the conditions above, it has to, among other things,
The version of the Florange law reviewed by the Constitutional Court also provided that, if the company refused a purchase offer, its works council could file a claim before the Commercial Court, which would determine if
If the Commercial Court found that the company breached one of these obligations, the Commercial Court could order the company to
The Constitutional Court considered the six obligations listed above and deemed them to be compliant with the French Constitution.
However, the court ruled that the obligation to accept a purchase offer in the absence of a legitimate reason as well as the Commercial Court’s jurisdiction to sanction any violation of this obligation were provisions that would unnecessarily affect companies’ constitutional rights of property and entrepreneurial freedom.
The Constitutional Court also ruled that sanction 1 was out of proportion in light of the obligation sanctioned. However, sanction 2—applicable if a company fails to research a purchaser—was considered to be compliant with the French constitution.
The provisions of the law that were deemed compliant with the French constitution by the Constitutional Court will be applicable as of the publication of the law, which should take place in the next few days.
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