The French Labour Code and national collective bargaining agreements (specific to an economic or industrial sector) govern the relationship between employer and employees.
A company can hire employees as soon as it is registered with the Trade Registry.
Non-EEA nationals who are resident in France must apply for their resident permit to state that they are permitted to act as a "foreign trader" in order to be allowed to perform management functions.
The statutory working time is of 35 hours per week. Hence, any additional hour worked above that limit of 35 hours, will be deemed as overtime and must be compensated (through additional payment or additional time off, if authorised).
In any case, an employee cannot work more than 6 days a week and 35 hours of time off in a row must be given each week, usually including Sundays.
Certain employees are not subject to working time regulation due to their status such as highest executive management.
The minimum wage or SMIC in France is revised at least every year taking into account the changes to the cost of living.
Higher minimum wage than the SMIC can be provided in a collective bargaining agreement.
Termination of employment
There are different rules that apply to the termination of employment contracts. Unless the parties agree to an early termination, a fixed term employment contract can only have early termination in exceptional circumstances (i.e: in case of a serious breach or a force majeure event)
Indefinite-term employment contracts can also be terminated after the probationary period. The employer may terminate an indefinite term employment contract under 3 circumstances:
- dismissal for economic reasons when the continuance of the contract would imply significant economic hardship to the employer;
- dismissal for personal ground (i.e: professional incompetence, incapacity of the employee), and
- agreed termination
In the event of dismissal, a letter must be sent by registered mail to the relevant employee explaining the reason for the dismissal and, in most cases, a meeting with the employee is to be held prior to the sending of the letter.
The employer must always give the dismissed employee the documents necessary to claim for unemployment benefits.
Depending on the grounds for dismissal, a dismissal indemnity may be due. It will vary depending on the employee’s status, length of service and age.
Special regulations apply to redundancies on economic grounds. It is necessary to prepare a job preservation plan if at least 10 employees are affected in a company with more than 50 employees. In addition, there must be consultation with staff representatives, reports must be made to the DIRECCTE, support in finding new employment must be provided and severance payments must be made.