Employment Contracts in France
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There are a variety of contract types in France. The main types are:
Open-ended, indefinite employment contract (Contrat à durée indéterminée – CDI): This is the most common form of contract, giving full-time employees the security of long-term work with an agreement that is by definition indefinite. Permanent contracts are, by default, full-time. They can be terminated either by the employee resigning, by the employer dismissing them with just cause or economic reasons or by mutual agreement. The employee need not give a specific reason for resigning but must give notice and continue to work as per their contract unless mutually agreed otherwise.
Fixed-term employment contract (Contrat à durée déterminée – CDD): The Labour Code allows these only under specific circumstances. These include:
- Replacing a full-time employee temporarily absent from work for such as illness or injury, maternity or paternity leave, attending a training course or retirement. The end date of the contract should be given with the justification for the CDD
- Increase in business activity due to demand
- Seasonal work
- Maximum contracted duration between three and 24 months or up to 36 months for ‘specific purpose’ or a ‘senior’ CDD for staff over 57 years old
- A CDD can be renewed only twice, making a total of three CDDs
- Failure to meet requirements for a CDD can see it automatically become a CDI
Trial Period Contracts: Both CDIs and CDDs can begin with a trial or probationary period, usually varying between three and six months as contractually agreed.
Temporary / Agency Contracts: Similar to CDD but involving agency as the third party; usual maximum of 18 months with employee due end-of-contract 10% bonus of total gross salary. The employee is hired and paid by the agency.
Part-time Employment Contract: This can be a CDI or CDD for employees working fewer than 35 hours a week and not more than 1,607 annually. Part-time contracts must be in writing and include job title, remuneration, monthly or weekly payments and overtime limits.
Youth Employment Contracts: They include:
- The three-year Apprenticeship Contract for 16-25 year-olds towards obtaining a professional qualification, paid at between 28% and 78% of the national minimum wage depending on age and year of apprenticeship
- The professional training contract for unqualified 16-25 year-olds or those aged over 26 years needing professional training, for six to 21 months at between 55% and 85% of the national minimum wage
Collective Agreements in France
Individual employers, employer federations, trade unions and employer organizations are part of Collective Bargaining Agreements (CBAs) that lay the framework of employment terms and conditions for employees. They generally cover specific sectors or industries.
Foreign companies who do not have a legal entity in France, but employ staff who are registered with social insurance and tax authorities, must still adhere to applicable collective agreements. Failure to comply risks fines and other sanctions that will compromise your business activity.
Compliance is mandatory if the agreement has been applied to the sector by the Ministry of Labour, or if the company is part of an employers’ organization that signed the agreement.
Collective agreements are binding on employers, regardless of the employer being a member of the organization that drew up the agreement or whether the employee is a union member. However, collective agreements can provide extra benefits not covered by employment law, affecting such as salary increases, extra holiday benefits, paid sick leave and minimum wages.
There are more than 300 collective agreements in France, which are also known as national collective agreements (Conventions Collectives Nationales, CCN). Collective agreements generally enhance the minimum requirements of the French Labour Code and in some cases introduce guarantees that are not covered by the Code. These agreements cover more than 90% of the workforce.