The rules of the Collective Mutual Agreed Termination (CMAT) are listed from articles L. 1237-17 to L. 1237-19-14 and articles D. 1237-4 and D.1237-5 of the French Labor code. 2 orders n°2017-1723 and n°2017-1724 from December, 20 2017, are based on Article 10 of September, 22nd 2017.
Will Collective Mutual Agreed Termination have the same success than the mutual agreed termination (Rupture Conventionnelle individuelle)?
Is it a way to legalize the so-called golden handshakes?
Will these agreements send thousands of employees to their local jobs centers (Pole Emploi) or will they create employment due to more flexible labor market (flexibilisation du marché du travail)?
1) Conclusion of a majority agreement (accord majoritaire) with unions
A collective agreement may define the content of a CMAT excluding any dismissal (licenciement) possibilities with the aim to reach the goal that is tied to it relative to job cuts (suppression d’emploi).
Therefore, this collective agreement should be a majority agreement, that is (i) voted by representative labor unions that obtained more than 50% of all votes casts or (ii) adopted by referendum, organized at the request of labor organizations that represent at least 30% of all votes cast.
Administration is informed without any delay of the opening of negotiations in preparation of the above-mentioned agreement. (L. Code. ; Art. L. 1237-19)
The Decree of December 20, 2017 sets forth that “when an employer intends to open a negotiation in preparation of a GPEC agreement to determine the CMAT content, he/she should inform the Direccte (Director of regional companies, competition, consumption, labor and employment/ Directions régionales des entreprises, de la concurrence, de la consommation, du travail et de l'emploi), in a dematerialized way”. (Article D. 1237-7 of French Labor Code).
When necessary, the signed agreement is sent to him/her using the dematerialized way.
The decision to submit this agreement and to ensure the following ups of the agreement’s implementation goes to the same administrative authority.
The Direccte in charge is the one that is affiliated with the involved institution.
When the chaft of agreement involves multiple instituations with different Direcctes, the Direccte from the company’s headquarters is in charge.
The latter refers the matter to the French Minister of Labor in order to nominate the competent Direccte. This nomination should be communicated to the company within ten days after the employer asked to open a negotiation. If a decision is not made on time, the competent Direccte remains the one from the company’s headquarters. Thereafter, the employer should communicate on his/her nomination to the Worker’s Council and to the company’s labor organizations.
2) Content of the Collective Mutual Agreed Termination
The collective agreement determines:
1° The terms and conditions of information of the Worker’s Council;
2° The maximum number of scheduled departures, associated job losses, and the duration of implementation of collective mutual agreed termination;
3° The conditions that the employee must fulfill in order to benefit from it;
4° The starting criteria between the potential candidates at departure;
5° The methods for calculating severance indemnities (indemnités de depart) guaranteed to the employee, which cannot be lower than the statutory indemnities (indemnités légales conventionnelles) in case of dismissal;
6° the methods of presentation and examination of candidacies at the departure of the employees, including conditions of the transmission of the written agreement of the employer to the device considered by the collective agreement"
7° Measures to facilitate the rehiring of employees to equivalent jobs, such as training activities, the validation of experience or conversion experience, or actions to support the creation of new activities or the resumption of existing activities by employees;
8° The procedures for monitoring the effective implementation of the collective mutual agreed termination (L. Code Article L. 1237-19-1).
3) Acceptance by the employer of the employee's application
The employer’s agreement of the employee's application in the context of the CMAT entails the breach of the contract (rupture de contrat) of employment by mutual agreement of the parties.
Employees enjoying the protection referred to in Chapter I of Title I, Book IV, Part Two of French Labor Code may benefit from the provisions of the collective agreement.
By way of derogation from the first paragraph of this article, the breach by mutual agreement in the context of the CMAT is subject to the authorization of the labor inspector under the conditions laid down in Chapter I of Title II of Book IV of the second part.
In this case the termination of the employment contract can only occur the day following the day of the authorization.
For the labour doctor (médecin du travail), the termination of the contract is subject to the authorization of the labor inspector, after consulting the medical inspector of work (médecin inspecteur du travail). (L. Code Article L. 1237-19-2)
4) Control by the Direccte
The collective agreement mentioned in Article L. 1237-19 of French Labor Code is sent to the administrative authority for validation.
4.1) Validation of the agreement by the Direccte
The administrative authority validates the collective agreement when she has ensured:
1° Conformity with Article L. 1237-19;
2° The presence in the collective mutual agreed termination of the measures provided in the Article L. 1237-19-1;
3° The regularity of the information procedure of the Workers Council. (French Labor Code Article L. 1237-19-3)
The administrative authority shall notify to the employer the validation decision within 15 days of receiving the collective agreement mentioned in Article L. 1237-19.
This delay of 15 days left to the Direccte to validate the agreement, runs from the receipt of the complete file (Decree 20 December 2017).
This file must include the collective agreement and information to verify that it has been concluded under regular conditions, in particular by informing the Worker’s Council, or, pending its establishment, the EC or the staff representatives.
The Direccte may request any additional supporting material necessary for its control (Decree 20 December 2017).
It shall notify it, within the same deadlines, to the Worker’s Council and the signatory representative trade unions. The decision taken by the administrative authority must be motivated.
The silence kept by the administrative authority during the period provided for in the first paragraph constitutes a decision to accept validation. In this case, the employer sends a copy of the validation request, accompanied by its acknowledgment of receipt (accusé de reception) by the administration, to Worker’s Council and representative trade union organisations signatories (organisations syndicales représentatives).
The validation decision or, failing that, the documents referred to in the fifth paragraph and the appeal procedures and deadlines shall be made known to the employees by posting at their workplace or by any other means allowing a certain date to this information. (French Labor Code Article L. 1237-19-4)
The administrative authority competent to take the validation decision is the one of the place where the company or establishment concerned by the draft voluntary agreement plan is established.
If the draft agreement concerning a collective conventional break relates to establishments coming under the jurisdiction of different authorities, the Minister in charge of employment designates the competent authority. (French Labor Code, Article L. 1237-19-5)
4.2) Refusal of validation
In the event of a decision refusing validation, the employer, if he wishes to resume his project, submits a new request after having made the necessary modifications and informed Worker’s Council (Comité social et économique) (French Labor. Code, Article L. 1237-19-6)
In case of a refusal of validation, the employer who wishes to formulate a new application must transmit it electronically under the same conditions as the initial application (Decree 20 December 2017, Article D. 1237-11 of the Labor Code).
5) Follow-up of the agreement (suivi de l’accord)
The monitoring of the implementation of the Collective mutual agreed termination is the subject of a regular and detailed consultation of the Worker’s Council whose opinions are forwarded to the administrative authority.
The administrative authority is involved in the follow-up of these measures and receives a report, drawn up by the employer, of the implementation of the collective agreement breaking agreement. (French Labor Code, Article L. 1237-19-7)
As for the assessment of the implementation of the agreement on the CMAT (Collective mutual agreed termination), it has to be communicated to the Direccte within one month after the end of the rehiring measures. The content of this report will be fixed in a future order (Decree 20 December 2017).
The collective agreement mentioned in Article L. 1237-19, the content of the collective agreed termination, and the regularity of the procedure preceding the decision of the administrative authority cannot be the subject of litigation. Separate from that relating to the validation decision referred to the Article L. 1237-19-3.
Appeals against the decision of validation are formed, educated and judged in the conditions defined in article L. 1235-7-1.
Any other dispute concerning the breach of contract must be filed, under penalty of inadmissibility (peine d’irrecevabilité), before the expiry of a period of twelve months from the date of termination of the contract. (French Labor Code, Art L. 1237-19-8)
7) CMAT and activity creation (création d’activités)
When job cuts resulting from the collective mutual agreed planned in the article L. 1237-19 affect, by their importance, the balance of employment aeras in which they are implanted, companies or establishments of at least one thousand employees as well as companies were mentioned in the article L. 2331-1 and those answering the conditions mentioned to articles L. 2341-1 and L. 2341-2, since they employ all in all at least one thousand employees, have to contribute to the creation of activities and to the development of jobs and to limit the effects of the collective agreed termination envisaged on the other companies in labor pool (bassin d’emploi).
These measures are not applicable in companies in recovery or in liquidation (French Labor Code; Art. L. 1237-19-9)
8) CMAT and social and territorial impact study (étude d’impact social et territorial)
An agreement between the undertaking and the administrative authority, concluded within six months of the validation provided for in Article L. 1237-19-3, shall determine, where appropriate on the basis of a study of the social and territorial impact prescribed by the administrative authority, the nature as well as the methods of financing and implementing the actions provided for in Article L. 1237-19-9.
The agreement takes into account actions of a similar nature that may be implemented by anticipation within the framework of a collective agreement relating to the forward-looking management of jobs and skills or provided for in the context of a collective agreement establishing a collective contractual break established by the business or planned as part of a voluntary initiative of the company which is the subject of a framework document (l’objet d’un document cadre) concluded between the State and the company.
The content and methods of adoption of this document are defined by decree. When a group, company or establishment collective agreement provides for actions of this kind, accompanied by financial commitments from the company at least equal to the amount of the contribution provided for in Article L. 1237-19- 11, the agreement shall, at the request of the enterprise, take the place of the agreement provided for in this article between the enterprise and the administrative authority, unless the latter objects to it within two months from the date of the request. (French Labor Code. Art L. 1237-19-10)
The actions provided for in Article L. 1237-19-9 are determined after consultation with the local authorities concerned, the consular bodies and the social partners who are members of the Regional Joint interprofessional committee (commission paritaire interprofessionnelle régionale).
Their execution is subject to monitoring and evaluation, under the supervision of the administrative authority, in accordance with procedures defined by decree. This decree also determines the conditions under which companies whose head office is not established in the employment area affected by the collective agreement breaking agreement contribute to the planned actions. (French Labor Code, Article L. 1237-19-12)
Houses of employment (les maisons de l’emploi) may participate, under conditions fixed by agreement with the companies concerned, in the implementation of the measures relating to the revitalization of employment areas (bassins d’emploi). (L.Code, Art L. 1237-19-13)
9) Framework-Convention on Revitalization (Convention-cadre de revitalization).
A national framework revitalization agreement (convention-cadre nationale de revitalisation) is concluded between the minister in charge of employment and the company when the job cuts concern at least three departments.
In determining the amount of the contribution mentioned in Article L. 1237-19-11, the total number of jobs eliminated is taken into account.
The framework agreement is signed within six months of the validation provided for in Article L. 1237-19-3.
It gives rise, within four months of its signature, to one or more local agreements concluded between the State representative and the company. These conventions conform to the content of the national framework convention. (Art., L. 1237-19-14).
Frédéric CHHUM, Avocats à la Cour (Paris et Nantes)
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