France is known for its rich legal tradition, and employment law is no exception. While it may appear intricate to foreign investors or HR leaders unfamiliar with its framework, the system offers stability, predictability, and room for strategic flexibility—if approached with the right guidance.
Here’s what every foreign company should know when setting up or managing a workforce in France.
Permanent Contracts: The norm, not the exception
In France, open-ended employment contracts (CDI) are the standard form of employment. Temporary arrangements like fixed-term contracts (CDD) are tightly controlled and may only be used for specific, time-limited purposes, such as the replacement of an absent emloyee or in case of temporary increase of business, —never to fill a long-term need.
Before hiring, it's important to ensure that the nature of the role aligns with the appropriate contract type.
Collective Bargaining Agreements: More Than a Legal Formailty
In addition to the Labor Code, most companies in France are governed by industry-level collective bargaining agreements (CBAs). These agreements can define critical elements such as:
- Minimum salaries
- Job classifications
- Working hours
- Health and life insurance coverage
Identifying the correct CBA is essential from the start. In some cases, it may be strategic to negotiate a company-level agreement that better fits your organization’s operational needs, especially if the industry-level agreement proves too rigid.
Employee Representation: A Dual System
France has a well-structured system of employee representation that applies once a certain workforce threshold is met:
Social and Economic Committee (CSE)
This employee-elected body becomes mandatory in companies with at least 11 employees. In organizations with 50 or more employees, the CSE must be consulted on a wide range of business decisions (organization, work conditions, large-scale layoffs, etc.). In most cases, the CSE’s role is advisory, not binding.
Trade Union Delegates
These are appointed by recognized unions in companies with at least 50 employees. Their main role is to negotiate and sign collective agreements. Where no union delegate exists, certain CSE members may step in to negotiate agreements directly with the employer.
Foreign employers should not fear this system—on the contrary, when handled proactively, it creates structured and transparent dialogue.
Working Time: Beyond the “35-Hour Week” Myth
The famous 35-hour workweek is often misunderstood. In practice, it marks the threshold for calculating overtime, not a hard limit.
Companies can organize working hours over longer reference periods—up to one year or more—by applying provisions found in their CBA or a company-level agreement. Some employees, particularly executives, may be placed under a days-based contract (forfait jours), allowing for even more flexibility.
Termination of Employment: Structured but Feasible
Contrary to common perception, terminating an employment contract in France is legally possible and often straightforward—when the correct process is followed.
Dismissal must be based on a genuine and serious cause (disciplinary, economic, or otherwise), and employers must:
- Conduct a preliminary meeting
- Provide a formal dismissal letter
- Justify the termination appropriately
Since the introduction of the Macron scale, compensation for unjustified dismissals is capped, providing predictability and reduced financial risk for employers.
There is also an amicable alternative: the mutually agreed termination (rupture conventionnelle), allowing both parties to part ways under agreed conditions.
Profit-Sharing Plans: Tools to Motivate and Reward
France offers two main mechanisms for employee profit-sharing:
- Mandatory profit-sharing (participation): Required for companies with at least 50 employees, this allows workers to benefit directly from company profits.
- Voluntary profit-sharing (intéressement): Available to all companies regardless of size.
These schemes come with attractive tax and social contribution exemptions, making them an effective way to reward performance.
Mandatory Employee Benefits: Health & Life Insurance
All employers in the French private sector must offer:
- A health insurance plan (mutuelle), with the employer covering at least 50% of the premium.
- A life and disability insurance plan (prévoyance) for executives, and sometimes for other employees if required by the applicable CBA.
These benefits are non-negotiable and must be factored into the overall cost of employment in France.
Final Thoughts: Navigating French Labor Law with Confidence
French labour law may seem daunting at first glance, but it’s far from insurmountable. With the right support, foreign companies can successfully:
- Align with local legal requirements
- Protect their interests
- Build a compliant, motivated workforce
As a French employment lawyer with nearly two decades of experience advising foreign employers, Alexandra DABROWIECKI helps international businesses confidently establish and manage their teams in France. With proper preparation and the right legal guidance, the French system becomes not a hurdle—but a competitive advantage.
