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05.05.2020Patrick Thiébart, Silvia Rumanescu

Alert Coronavirus n° 7 – France: restart your business at the end of the lockdown period with the CPA

  Questions Answers
Why negotiating a CPA ? CPA stands for “Collective Performance Agreement”. This legal tool has been in force since January 2018. Its main goal is to help companies to adjust quickly to upward or downward market trends.

With the end of lockdown period scheduled on May 11, many companies, although financially weakened by the covid-19 crisis, will need all their employees to restart their business.

The CPA makes it possible for companies to temporarily adjust employees’ working conditions through a company-wide agreement that prevails over employment contracts. In other words, the employer does not have to seek each employee’s consent.
Imposing new working conditions through the CPA

 

 Two types of measures are particularly important in anticipation of the upcoming lockdown:

  • Adapting employee’s working time to company’s business needs through the following measures:
    • Increasing working time, while complying with the maximum working time duration as set out in the labor code, without increasing employees’ remuneration;
    • Paying employees a monthly remuneration that is independent of their actual working time and based on average monthly working hours over a predetermined period of reference so as to avoid overtime pay during this period;
    • Implementing or amending lump-sum working time agreements based on a number of working days or a number of working hours over the year.
  • Adapting employees’ remuneration:
    • Implementing pay cuts, subject to compliance with the minimum wages provided for by the applicable collective bargaining agreement.
No need to prove the existence of financial difficulties Negotiating and signing a CPA is not subject to the demonstration that the company is facing financial difficulties.

However, the existence of a deteriorating or potentially deteriorating economic situation can be a strong argument for unions to engage in the negotiation of a CPA.

If necessary, the employer may undertake to temporarily discontinue any redundancy process while the CPA is in force.
Inserting a preamble in the CPA Even though the absence of a preamble is unlikely to invalidate the CPA, it is highly advisable to include one in order to clarify the objectives of the CPA and thus justify its implementation.
What are the optional clauses to be inserted in a CPA?
  • Procedures for informing employees about the application of the CPA and following-up throughout its duration, as well as, where applicable, reviewing employees’ position at the end of the CPA.
  • The conditions under which salaried managers as well as corporate officers and shareholders make financial efforts proportionate to employees’ efforts throughout the duration of the CPA.
  • Conditions for maintaining employees’ work-life balance.
What is the duration of a CPA? A CPA may be negotiated for an indefinite or a fixed-term period. In the absence of specific duration, the CPA is deemed to have been entered into for a 5-year period.
How to negotiate a CPA? ·        In companies having unions: the CPA must be signed by union delegates representing more than 50% of the workforce or, failing that, by union delegates representing more than 30% of the workforce subject to a referendum approved by a majority of the votes cast.

·        In the absence of unions: the CPA may be entered into with employees’ reps. whether or not mandated by representative unions at the industry level or, failing that, at the interprofessional national level.

·        In companies with less than 11 employees: employers may propose a draft agreement directly to the employees, subject to the approval of two-thirds of the employees
Should the works council be consulted? There is no requirement to consult the works council when signing, amending or terminating a CPA. However, when the CPA includes measures that may significantly impact employees’ working conditions, the works council will have to be consulted on the contemplated restructuring project.
What are the procedures for informing employees? It is possible to either inform the employees directly on an individual basis or inform them through the employees’ reps.
Are employees allowed to refuse the application of the CPA? The provisions of the CPA supersede any inconsistent clauses in employees’ employment contracts.

However, employees may refuse the application of the CPA within a 30-day period starting when they have been informed of the signature of the CPA and its measures.
What happens in case of employees’ refusal? The employer is entitled to dismiss the employee who expressed his/her refusal. The dismissal should take place within the next 2 months following the notification date of the refusal.

The dismissal will necessarily be grounded, meaning that the employee will not be allowed to get damages for unfair dismissal, should s/he decide to go to court to challenge his/her termination.

In case 10 or more dismissal occur over a 30-day period in a company with 50 or more employees, the employer will not have to implement a reduction in force process (“plan de sauvegarde de l’emploi”).

The dismissed employee will nevertheless be allocated a sum of 3,000€ to his/her Personal Training Account.

For further information on the CPA, feel free to get in touch with Franklin! We will be happy to answer any questions you may have.