Further to the French Supreme Court decision of 18 May 2011 "French Supreme Court Rules Intra-Company Postings Must Include Personnel Management Costs or Risk Being Classed as For-Profit", the French Labor Code provisions on posting of employees has been modified. When posting an employee to or from any French company, including a group company, it is now compulsory to:
- Execute a posting agreement between the employer of the posted employee and the other company
- Amend the employment contract, providing for the posted employee’s duties, place of work and working hours during the posting
- Consult with the Works Council prior to posting an employee to another company
- Consult with the Works Council and Health Council prior to having a posted employee come from another company.
To compensate for these additional requirements, the new provisions appear to make it acceptable not to pay management fees under posting agreements. However, we still recommend making provisions for such fees, as, despite this new statute, which was enacted in haste, the Supreme Court might uphold its ruling of 18 May 2011.
What Does This Mean For Companies?
- For future posting of employees to and/or from a French company, you must comply with all these new requirements
- For employees currently posted to and/or from a French company, we would recommend complying immediately with at least the first two new requirements.