- Phase
- Labour Code, Commercial Code, Law on the Modernisation of the Economy No 2008-776 of 4 August 2008
- Native name
- Code du travail, Code du Commerce, Loi n° 2008-776 du 4 août 2008 de modernisation de l'économie
- Type
- Staff information and consultation on business transfers
- Added to database
- 16 August 2015
Article
Labour Code: Article L2312-8 (transfer of undertaking)
Commercial Code: Articles L23-10-1 to L23-10-6 (sale of business)
Description
Information and consultation on business transfers
There is no specific provision requiring the transferee to inform and consult the works council. The information and consultation procedure in case of transfers shall follow the general principles of information and consultation, as under French law, the employer is responsible for informing the works council.
However, the Labour Code denies information and consultation rights to the employees when no representative bodies are present within the company. In fact, the French legislation has not directly implemented article 7 § 3 of the European Directive on transfers of undertakings that states that 'the information and consultations shall cover at least the measures envisaged in relation to the employees'. In two decisions, the Social Chamber of the Supreme Court refused compensation to an employee, working in a company without an information and consultation body who had not received information from their employer in case of a transfer.
Information and consultation on sale of business
Since 2014, employers of companies employing fewer than 250 employees and with a turnover of less than €50 million (or a balance sheet total of less than €43 million), have to inform their staff about any project to sell the company, so that they are able to look for a buyer or take over their company. The information to provide to the employees' representatives or directly to the employees if there are no information and consultation bodies shall include
- a statement of the seller’s wish to sell the business, and
- a statement indicating that the employees may make an offer to buy it.
The employer must provide such information by any means:
- two months before selling at the latest, in companies with fewer than 50 employees (and therefore not submitted to the commitment to set up a works' council)
- at the latest the day of the first meeting of the works council on the project to sell the company
Once the employees are informed, the employer has two years to complete the sale of the company. If he/she fails to sell within this time period, he/she will have to start a new information and consultation process (Commercial Code, [articles L23-10-1 to L23-10-6]).
For companies with fewer than 50 employees, if all employees inform the employer before the end of the two months’ period that they will not submit an offer to take over the company, the transaction can be completed earlier. The employer is entitled to reject the offers made by the employees as the law does not grant the employees a right of first refusal in this matter. If the employer fails to comply with these regulations (no information provided or information provided too late), employees can introduce an action before the civil court against the employer to obtain damages.
Citation
Eurofound (2015), France: Staff information and consultation on business transfers, Restructuring legislation database, Dublin,
https://apps.eurofound.europa.eu/legislationdb/staff-information-and-consultation-on-business-transfers/france