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How will the revised Posted Workers Directive be implemented in France?

Global
27.07.20
6
Written by
Capstan Avocats, the law firm setting the benchmark for labour law in France.
This article sets out the detail of how the revised Posted Workers Directive will be implemented in France from 30 July 2020.

Act of transposition of the of June 28, 2018

The revised Posted Workers Directive (EU Directive 2018/957) has been transposed into French law by a Government Ordinance no. 2019-116 of 20 February 2019 (published in the French Official Gazette of 21 February 2019). Its provisions will enter into force on 30 July 2020. A project of Ratification Law (no. 1927) is still under review by the French Parliament but this will have no impact on the date of entry into force of the Ordinance.

In addition, Law no. 2018-771 of September 5, 2018 (known as the ‘Loi Avenir’), which enabled the French government to transpose the EU Directive by way of a government ordinance, has brought several changes at national level to regulations on the posting of workers in France (mainly exemption from pre-secondment declaration in certain situations and an increase in the applicable administrative fines). These changes relate only to French law and are not detailed here.

Summary of main changes

Equal treatment

Under current French legislation, any employer established outside of France, posting employees on French territory must comply with certain ‘core’ provisions of French law, as specified by statutory provisions, towards these posted employees,.

These core French legal provisions:

  • take into account both statutory provisions and provisions of national sector-wide CBAs; and
  • relate to employees of companies in the same sector of activity established on French territory (French labor code, Section L.1262-4 I.- and R.1261-2).

 

From 30 July 2020, an explicit reference to the notion of ‘equal treatment’ is introduced in the French Labour Code, in a way which significantly strengthens the employers’ duty in the context of posting employees in France.

Instead of having to (merely) ‘comply with’ the core provisions of French law described above for their posted employees, the employers concerned (i.e. employers established outside of France, posting employees on French territory), will now have to ‘guarantee’ each posted employee ‘equal treatment’ with locally employed personnel, under the same conditions.

(French Labour Code, Section L.1262-4 I.- as of July 30, 2020)

Extension of the core set of rules to be complied with under French law

As of 30 July 2020, the ‘core’ French legal provisions, will be extended in two ways:

  • Strengthened definition of equal pay: Under current French legislation, employers must comply, with the ‘applicable minimum wage’ as well as ‘statutory and CBA-based salary add-ons’ (French labor code, Section L.1262-4 in its current version), for posted employees. From 30 July 2020, in accordance with the French transposition ordinance, employers will have to guarantee each posted employee the ‘minimum or basic wage, as well as all other benefits and add-ons paid, directly or indirectly, in cash or in kind, by the employer to the employee by reason of his/her employment’.

(French Labour Code, Section L.1262-4 as of July 30, 2020)

This change in wording strengthens the employers’ duty in terms of equal treatment (as described above) regarding, specifically, compensation matters.

From 30 July 2020, instead of having to (merely) comply with the applicable minimum wage as well as statutory and CBA-based salary add-ons for their posted employees, the employers concerned will have to guarantee each posted employee equal treatment (as described above) in relation to any kind of employee compensation, of whatever nature (i.e. fixed or variable, in cash or in kind, etc.).

  • Transport, meals and accommodation expenses: From July 30, 2020, certain business expenses are also explicitly added to the list of ‘core’ provisions of French law to which the equal treatment rule applies, namely ‘transport, meals and accommodation expenses’ borne by the posted employee ‘in the context of the performance of his/her duties’ and which are ‘of a specific nature inherent in his/her function or duties’.

(French Labour Code, Section L.1262-4, I.- 11° from 30 July 2020)

Long-term posting in France (main rule)

Under current French legislation, the rules described above apply, irrespective of the duration of the employee’s posting in France.

In accordance with the French transposition ordinance, from 30 July 2020, where an employee has been seconded in France for more than 12 months (taking into account, where appropriate, the period worked before 30 July 2020), he/she will automatically be subject, from his/her 13th month of secondment on French territory, to all provisions of the French Labour Code, except the following:

  • provisions regarding the hiring of employees (which govern, mainly, the pre-hiring declaration, recruitment processes, and trial periods);
  • provisions regarding modification on economic grounds, transfer or termination of the employment agreement (this includes rules governing dismissals, mutual terminations, and resignation by the employee);
  • the secured voluntary mobility scheme (mobilité volontaire sécurisée);
  • provisions regarding fixed-term employment agreements, including all similar contracts (e.g. building site contracts, mission-based contracts, etc.)

(French Labour Code, Section L.1262-4, II.- as of July 30, 2020).

Long-term posting (calculating the 12-month period)

In the event a posted employee is replaced by another posted employee in the same position, the 12-month period referred to above shall be reached when the cumulative period of secondment of successive employees in the same position is equal to 12 months.

(French Labour Code, Section L.1262-4, II.- as of July 30, 2020)

Long-term posting (extension to 18 months upon reasoned statement)

Where the specifics of the posting situation justifies it, the 12-month period can be extended to 18 months, with a declaration with reasons (the form and content of which is to be determined by a government  decree to be published) by the employer to the relevant administrative authority, before the end of the 12-month period, taking into account the period worked before 30 July 2020, if any.

(French Labour Code, Section L.1262-4, II.- as of July 30, 2020)

In the event of a breach of this declaration obligation, the employer will be liable for an administrative fine of up to EUR 4,000 per posted employee, increased to up to EUR 8,000 per posted employee in the event of a repetition within two years as from the date of notification of the first fine, up to a total maximum fine of EUR 500 000.

(French Labour code, Section L. 1264-3 as of July 30, 2020)

The French transposition ordinance does not provide any specific ‘mitigating circumstances’ (as suggested by s1, paragraph 2, a) of the EU Directive), but states that the administrative authority may take into account the employer’s ‘good faith’ to determine the amount of the fine.

(French Labour Code, Section L. 1264-3 as of July 30, 2020)

Specific changes regarding temporary work agencies

Under current French legislation, if a temporary work agency established outside of France seconds employees on the French territory, specific statutory provisions apply. Such provisions have been modified by the French transposition ordinance, as set out below.

User company established outside of France (mandatory declaration replaced by a simple information duty)

Under current legislation, for indirect postings of employees by a temporary work agency established outside of France (i.e. secondment, by a temporary work agency established outside of France, of its employees to a user company also established outside of France, which temporarily seconds the employees on the French territory), the user company must send a declaration to the French Labour Inspection stating that the temporary work agency is aware of the posting of its employees on the French territory , before the posting begins. From July 30, 2020, this mandatory declaration to the French Labor Inspection is replaced by an information duty. The user company established outside of France will now only have to inform the temporary work agency, before the beginning of the posting of:

  • the fact that its employees are posted on the French territory; and
  • the ‘core’ rules of French law applicable to them (the exact content of this information is to be determined by a ministerial ruling that is still to be published).

 

The user company will only have to justify by any means that it complied with this obligation in the event of an inspection by the French Labour Inspection.

(French Labour Code, Section L.1262-2-1, version to come as of July 30, 2020)

User company established in France (new information duty)

In addition to the above, a new information duty is introduced under French law, on the part of the user company established in France. Where the user company is established in France, it has the obligation (in the situation described above), to inform the temporary work agency established outside of France of the salary conditions applicable to its employees during their posting in France.

(French Labour code, Section L.1262-2-1, version to come as of July 30, 2020)

Penalties

The sanction mentioned above (i.e. administrative fine the amount of which may be up to EUR 4,000 per posted employee, increased to EUR 8,000 per posted employee in the event of a repetition within 2 years as from the date of notification of the first fine) will apply:

  • to the user company established outside of France in case of failure on its part to inform the temporary work agency of the posting of its employees on the French territory, and the rules applicable to them; and
  • to the user company established in France in the event of a failure on its part to inform the temporary work agency of the salary conditions applicable to its employees during their posting in France.

(French Labour code, Sections L.1264-2 and L.1264-3, version to come as of 30 July 2020)

Authors
Anne-Laure Périès
Partner - France
Capstan Avocats