France: the role of alternative measures to redundancies in managing the crisis

Faced with the economic impact of the health crisis, many companies that have found themselves compelled to curtail their business operations have begun restructuring. Besides making personnel redundant, such firms can make use of the various mechanisms introduced by the successive reforms of France’s labour code, such as the collective performance agreement (accord de performance collective [APC]), collective conventional termination of contract (rupture conventionnelle collective [RCC]), and the long-term short-time working scheme (activité partielle de longue durée [APLD]). Are they suited to the current crisis? Why not resort to a long-term partial activity agreement? The terms and conditions of application of the common law partial activity will gradually deteriorate from June 2021 onwards. The specific long-term partial activity scheme (APLD) will become more attractive in terms of compensation and duration of application, provided that the conditions for implementation are met. Main features of the LTPA The LTPA scheme is available provided that :

– a company or branch collective agreement is concluded;

– this agreement defines the counterparts to which the employer commits, particularly in terms of maintaining employment and training; in the event of the application of an extended branch agreement, these counterparts are defined in a unilateral document of the employer;

– the agreement or the unilateral document is, depending on the situation, validated or approved by the Dreets (ex-Direccte);

– the reduction in activity does not exceed 40% of the legal duration for each employee (assessed on average over the entire APLD period).

When the Urssaf proposes a plan, the contributor must respond within one month. If he fails to do so, the plan is deemed to have been accepted. If there is an extended branch agreement, a unilateral document from the employer is sufficient to set up the plan. Failing that, in Very Smal Entities with fewer than 11 employees, as well as in those with fewer than 20 employees without a CSE, the APLD can be implemented by a collective agreement ratified by 2/3 of the workforce. The APLD is a temporary arrangement. It applies to agreements or unilateral documents sent to the Dreets until 30 June 2022. Comparison between APLD and common law partial activity

APLD

Partial activity under ordinary law

Employee compensation

70 %*

60 %* starting July 1st, 2021

Allowance paid to the employer

60 %*

Floor of 8,11 € per hour

Progressive decrease up to 36 %* starting June 1st, 2021

Floor of 7,30 €

Maximum duration

24 months, consecutive or not, assessed over 36 months

3 months, renewable for 3 months, from July 1st, 2021, except in exceptional cases

*Percentage of the gross remuneration used as a basis for the paid holiday allowance according to the salary maintenance method, within the limit of 4.5 Smic (Minimum wage).

Contributing Advisors