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COUNTRY OVERVIEW

Employees are represented on the boards of both public-owned French companies and some private sector companies – largely those which have recently been privatised. Both unions and employers were consulted on how the directive was to be implemented in France. However, this did not lead to a wider public debate.

For further information on the SE legislation, such as the choice of SNB members, click on the more button.

In most cases in France only public-owned companies and those which have recently been privatised have board members who represent all employees – other private sector companies can choose to introduce this but only rarely do so. In addition, employee representatives can also be present as board members representing employee shareholders. The number of employee representatives on French boards varies according to the size of the company, whether it is publicly or privately owned and the size of the board. In a publicly-owned company with more than 1,000 employees, one third of the board members are elected by employees; in a recently privatised company where the board has fewer than 15 members, employee members should have three seats (two elected by all employees and one elected by employee shareholders).

Unions and employers were consulted on the implementation of the directive in France, receiving an initial draft of the French legislation in March 2003 which was modified in the light of their comments. The modified draft was discussed at a meeting of the Social Dialogue Committee for European and International Questions (Comité du dialogue social pour les questions européennes et internationales) in June 2004, although MEDEF, the principal employers’ organisation was absent. The implementation of the directive did not, however, lead to a wider public debate.

Form of transposition

Directive was implemented through legislation passed in July 2005, more than nine months after the October 2004 deadline.

The legislation implementing the directive on employee involvement in European companies was signed into law on 26 July 2005 and published in the Official Journal the following day. The paragraphs dealing with the transposition of the directive were part of a much more extensive piece of legislation, which also introduced changes in taxation, the treatment of shareholdings and investments. Only one Article of the legislation Article 12 relates to the implementation of the directive, through modifications to the Labour Code. Throughout Article 12 there are references to changes to Articles in the legislative part of the Labour Code and these are the references given in other sections. The title of the legislation which also adapted French law to the Regulation on European companies is Law No. 2005-842 of 26 July 2006 for trust and modernisation of the economy (LOI n° 2005-842 du 26 juillet 2005 pour la confiance et la modernisation de l'économie). In addition regulatory details and clarifications were added by a decree passed in November 2006: Decree No. 2006-1360 of 9 November 2006 relating to the involvement of employees in the European company and modifying the Labour Code (Décret n° 2006-1360 du 9 novembre 2006 relatif à l'implication des salariés dans la société européenne et modifiant le code du travail).

Special negotiating body (SNB)

Selection of national members

French members of the SNB are chosen by the unions in the company in proportion to the level of support they received in the most recent works council elections of employee representatives. Only if there are no unions are the French members of the SNB directly elected.

French SNB members are chosen by the unions with members in the company on the basis of their support in the most recent elections for works councils in the companies involved. The seats are split between the different groups of employees – “electoral colleges” in the wording of the French legislation – on the basis of the number of employees in each. There are normally two “electoral colleges”, one for manual and one for non-manual employees, although where more than 25% of employees are non-manual workers, a third college – for more senior staff – is also set up. Within each college the unions choose the SNB in line with the number of seats they won in the same college in the most recent works council elections.

The unions must choose the SNB members from among the existing elected works council members or from the union delegates in the companies involved. (Unions with members in a company employing more than 50 can designate a union delegate, who has a range of rights.) (Art. L. 439-29 and Art. R. 439-6)

Only if there is no union in the company are French SNB members directly elected by the employees, with elections being organised in electoral colleges (Art. L. 439-30 and Art. R. 439-8).

External trade union representatives

French legislation prevents external union representatives from France being members of the SNB.

The fact that French SNB members must be chosen from among existing works council members or union delegates, who in both cases must be employees, or, if there is no union, be directly elected from among the employees means that external union representatives cannot be SNB members from France (Art. L. 439-29).

Financing of experts

Funding limited to a single expert.

The French legislation on funding states that while the SNB can be assisted by “experts of its choice” the companies involved pay only for “a single expert” (Art. L 439-31).

Standard rules under the fallback procedure

Allocation of national seats on SE representative body

Same arrangements apply as for SNB members – French members are chosen by the unions in the company in proportion to their level of support, with direct elections only if there are no unions.

The same arrangements which apply for the choice of French members of the SNB also apply for the choice of French members of the SE representative body – known as the committee of the European company (comité de la société européenne) in the French legislation. In other words, they are chosen by the unions with members in the company on the basis of their support in the most recent elections for works councils in the companies involved. Only if there is no union are they directly elected by the employees. This also prevents external union representatives being members (see section on SNB). The legislation states that SE representative body members from France are chosen “in line with the provisions of article L. 439-29” – the article covering the selection of SNB members (Art. L. 439-37).

Budget of representative body

The company should bear the expenses of the representative body, including one expert.

The company is obliged to cover the costs of the representative body. These specifically include organising meetings, interpreting services, accommodation and travel expenses of members and the cost of a single expert “within the framework of the annual meeting” of the representative body. Members of the representative body have up to 120 hours of paid time off a year each, in addition to the time taken by meetings of the representative body itself and the select committee (Art. L. 439-40).

National procedure for the allocation of board seats

The mechanism for choosing board members is generally left to the SE representative body – but if there is an election it is run under the same rules as those for employee board-level representatives in national French companies.

The legislation does not set out in detail how French employee representatives at board level are to be chosen. It states that if a single system of board-level representation exists, this should continue to be used. However, if several systems exist, it is up to the SE representative body to choose the system, with management taking the decision if the SE representative body cannot agree. Where the system adopted is one where employee board members are either recommended or opposed, it is the SE representative body that makes the recommendation or expresses its opposition. Where there is an election, it should be run in accordance with the rules for the election of employee board-level representatives in a national French company – in other words through an election by all employees, with nominations coming either from the unions or from 5% of employees (at least 100 in companies with more than 2,000 employees) (Art. L. 439-42)

Misuse of procedures and structural change

Misuse of procedures

The issue of misuse of procedures is not directly addressed in the French legislation. However, it does contain provisions on structural change, which in many ways have an equivalent, if not more far-reaching, effect.

There is nothing in the legislation that directly covers the situation where procedures are misused to deprive employees of their right to participate in company decisions. However, there is an article that deals with structural and other changes (see section on structural change). In some ways the safeguards this provides are stronger than the misuse provisions in many other states, as these typically have a one-year limit when changes are assumed to be a misuse of procedures unless the opposite can be proved. The French legislation on changes is not time-limited in this way.

Structural change

The agreement must be renegotiated if, after the SE has been established, there are changes which are likely to affect employees’ rights to participate at board level or the make-up the SE representative body.

French legislation includes a clear requirement for the agreement to be renegotiated, if there are changes in “the structure of the company, the location of its headquarters or the number of workers it employs” which are like to affect substantially the composition of the SE representative body or the way that employees are involved at board level. This may be at any time after the SE has been established (Art. L. 439-50).

Position of trade unions and employers

Both unions and employers were consulted on the legislation implementing the directive. The unions had a number of concerns which focussed principally on the impact of the directive on existing structures. The employers have been less vocal.

Initial drafts of the legislation were sent to both the union confederations and the employers’ associations and the modified draft was discussed at a meeting of the Social Dialogue Committee for European and International Questions (Comité du dialogue social pour les questions européennes et internationales). The unions expressed regret that the legislation did not permit external union representatives to be SNB members, and the CGT – one of the two largest confederations – voiced its concerns that the legislation meant that where a French company became a European company, the existing top-level national structures of representation could be abolished.

The main employers’ association MEDEF was absent from this meeting, so it is more difficult to assess its position. In a statement issued in 2002 it welcomed the prospect of the European company, although it also described its social provisions [on the involvement of employees] as “heavy and complex”.

L. Fulton (2008) Anchoring the European Company in National Law - Country Overviews (online publication, prepared for worker-participation.eu)

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