Newsletter - May 2018
Since 23 December 2017, companies are able to make use of a new mode of termination of the employment agreement, (which is not a dismissal) with the aim of eliminating jobs. This mode is referred to as a “negotiated separation,” and its acronym in French is “RCC.” On 17 April 2018, the Ministry of Labour published on its web site a document that provides more details on this mechanism.
Use of the negotiated separation
The scope of application of the negotiated separation (formally, “termination under the collective bargaining agreement,” or “RCC”) involves voluntary separations, which are not dismissals or resignations. The RCC relies on a combination of a collective bargaining agreement between the employer and the unions or the authorised signatory bodies and an individual agreement. The collective bargaining agreement must be entered into under the typical legal conditions, regardless of the company’s size.
The RCC does not need to be justified by economic grounds, and the collective bargaining agreement may provide for a number of voluntary departures that is higher than the number of eliminations of actual jobs; the positions that have become vacant may be filled without any legal re-hiring priority. However, the commitment by the employer to maintain employment must be stated in the agreement, thus enabling the employees to be able to opt freely either to separate from the company under the proposed conditions or to continue in their positions.
The RCC is designed as a “fresh” restructuring mechanism and is not intended to be implemented at the same time as a job-saving plan (“PSE”) in the context of the same project to compress staff numbers. In such a situation, voluntary separations and dismissals must coexist in the scope of the procedure that is specific to job-saving plans (“PSE”).
If the employee distorts the measure from its intended use, in order to circumvent the obligation to set up a job-saving plan, the courts may disqualify the plan and heavily penalise the employer.
The contents of the negotiated separation agreement
The logic behind the negotiated separation is to enable the employer to reserve separations for particular sets of employees, especially those exposed to economic and technological changes. Such provisions are legal if they adhere to the principle of “equality of treatment” and if the rules determining the eligible employees are objective and defined in advance. The State will ensure that the criteria for selecting applicants for voluntary separation are clear and take account of the viability of the employee’s personal professional plan; the expression of voluntary intent must be unequivocal.
There is an absolute ban on any discrimination, including to do with age, and this requirement will be monitored specifically by the regional manager of companies, competition, consumption, labour and employment (“DIRECCTE”) that is empowered to approve the RCC agreements. The State will take particular care to ensure that older employees who opt for a voluntary separation will be able, in accordance with the agreement’s provisions, to achieve a real personal professional project or to receive their retirement pension immediately or deferred using funding provided by the company. The State specifies that the RCC must not rely on unemployment insurance provided by the State by inappropriately targeting older employees.
Support mechanisms similar to those associated with the scheme for dismissals on economic grounds may be proposed in the agreement, while they need not be the reserved mechanisms such as the professional security contract (CSP) or transfer leave.
Notification of the CSE
The negotiated separation agreement (or RCC agreement) must set out the procedures and conditions for keeping the CSE, or economic and social committee, informed, or if the company has not yet set up this new body, then the works council or, potentially, the staff delegates.
However, the law does not impose the requirement to consult with a finding needing to be made. The employer is free to carry out a consultation, or not, and according to the procedures that it wishes.
The DIRECCTE will ensure that the actual implementation of the notification of the CSE is in line with the provisions of the RCC agreement.
Procedure for approval of the RCC agreement
The employer is required to send an application to the DIRECCTE, over the web, to the following address: https://www.portail-pse-rcc.emploi.gouv.fr. Once the DIRECCTE receives the complete application, he notifies the employer, the signatories to the agreement, and the CSE, if applicable.
The two-week processing time runs as of the date of receipt of the complete application.
The DIRECCTE will make a comprehensive assessment of the draft agreement with regard to the goal of the order aimed at encouraging the mechanisms of voluntary mobility negotiated in a framework that favours taking steps prior to economic changes, while guaranteeing professional pathways that are secure for the employees.
If the DIRECCTE give his approval, and once options for a voluntary separation are stated, the employer and the employees are able to sign individual termination agreements according to the procedures set forth in the agreement. If the DIRECCTE fails to respond to the application with two calendar weeks, the application is implicitly agreed to.
If approval is denied, a new agreement may be negotiated, which takes into account the grounds for the denial, and then a new approval procedure is followed.
We are entirely available if you have any further queries about the issues discussed in this newsletter or about any other accounting, tax, social security or law related topic.