France: Reform of the Labor Code for flexibilization of employment

September 5th, 2017

Code du travail
On July 31st, 2017, the French government published several Statutory-orders with a view to reforming the Labor Code.

The main objective of the reform is to make the employment of workers more flexible. The main measures taken include the limitation of compensation for unfair dismissal, the redefinition of the market reason for dismissals for economic reasons and the extension of the sectors of application of the so - called "CDI - Chantier".

Thus, indemnities for unfair dismissal that until now were freely set by the judge, as of the entry into force of these ordinances, will be limited according to the seniority of the worker in the company. Thus, for example, a worker, with a seniority of 2 years in the company, will not be able to obtain, in court, compensation for unfair dismissal of more than 3 months of salary. On the other hand, the worker, with 30 years of seniority or more, will not receive more than 20 months of salary, as compensation for unfair dismissal. (For a detailed table of approved limitations, click here).

With regard to the redefinition of the market reason for dismissal, before the reform, in order to assess the financial difficulties of the company, if it was a multinational, the financial situation had to be taken into account in all the countries in which the company carried out an economic activity. After the reform, in order to justify a dismissal for economic reasons, only the financial situation of the French subsidiary will be taken into account.

The "CDI-Chantier" that until now was only authorized in the construction, may be used in other sectors. To do this, the sector in question must negotiate and sign an agreement that sets the precise rules of the use of this type of contract. The “CDI Chantier” will allow workers to be hired for a much longer period than under a temporary contract, since the end of the contract will correspond to the end of the project. To conclude, this type of contract has the advantage of being less onerous, in terms of social contributions for the company, than a temporary contract.


By using our site, you consent to our Terms of Use available in the “Mentions légales” and, particularly, that cookies are used to improve your user experience.