France: Role of the Social and Economic Committee in the Context of a Restructuring or Downsizing

In addition to the information and consultation obligations linked to their general responsibilities,1 Social and Economic Committees (“Comité Social et Economique” or "CSE") in French workplaces, which replace and merge all the employee representative bodies, staff representatives, works council, and health, safety and working conditions committee, must be informed and consulted in the event of a “restructuring and downsizing.”2 What is their scope of intervention?

Cases Requiring Consultation

Consulting the CSE is relevant to a wide range of situations, some of which require specific procedures to be implemented.

First of all, it should be noted that CSE consultation is only necessary if the employer wishes to implement a project that is likely to affect the size or structure of the workforce.3

Cases are varied and cover various situations, such as:

  • redundancies on economic grounds4;
  • a collective contractual termination or collective performance agreement. Please note that the consultation does not relate to the draft agreement, but to the reasons leading to the reorganisation project, its timetable and the impacts on working conditions;
  • more generally, any regular and significant reduction in a company's workforce over a given period as part of a deliberate strategy.5

Possible Involvement During the Project Study Phase

The French Labor Code6 states that the CSE “shall be informed in a timely manner of restructuring and downsizing projects.

This notion of “timely” is particularly difficult to determine when it comes to a restructuring and downsizing project prepared several weeks or months in advance.

It is clear that the CSE can only require that it be consulted if a specific project actually exists, and not for preliminary studies (which are essential for the development of a project). If some companies involve employee representatives right from the study phase, this is certainly not out of a legal obligation, but out of the desire to encourage the most transparent social dialogue possible.

Such involvement enables the staff representatives to be informed in advance, making it easier for them to understand the objectives and principles of the project.

However, this should not encourage social partners to adopt a form of “German-style co-management” system. The aim is not to establish a co-decision right.

In any case, this involvement should be treated with caution. First, because it necessarily creates a “precedent,” even though not all projects are suitable for it, and second, because the involvement of the CSE at this stage may lead to difficulties or even tensions with the employees’ elected representatives. Therefore, involving the CSE from the study phase will also depend on the quality and maturity of the social dialogue within the company.

Note: In our opinion, the extra-legal involvement of the CSE during this phase should be structured by favoring the negotiation and signature of a method agreement which is a collective agreement concluded in order to define in advance the method of negotiation and/or information/consultation of the CSE.

Involvement During the Information-Consultation Phase

During this phase, the CSE's involvement is crucial, as it can:

  • demand the communication (possibly in court) of precise information regarding the project
  • decide to call in an expert, the conditions of funding and operation of which will depend on the framework of such recourse;
  • make proposals for improvements or alternatives to the project
  • communicate with employees;
  • be a privileged counterpart of the labor administration, to which it will communicate its opinion.7

A collective agreement (or, in the absence of a trade union delegate, an agreement between the employer and the CSE adopted by a majority of the members) can provide a framework for the information-consultation procedure of the CSE.8

This agreement makes it possible to define:

  • the content of the information-consultation procedure in compliance with public policy provisions;
  • the modalities of this procedure and more particularly the number of meetings; and
  • the deadlines for consultation.

During the implementation of the project, the CSE can take part in a project-monitoring committee.

The Prior Information and Consultation of the CSE on Company’s Strategic Planning: A Mandatory Precondition?

Over the last few years, a “movement” has emerged, consisting of wanting to impose another information-consultation process on an employer’s strategic planning prior to the launch of an information-consultation procedure on a one-off restructuring and downsizing project.

However, recurrent information-consultation procedures, and those of an ad hoc nature, fall under a separate regime. There is no legal or conventional provision or rule requiring coordination between recurrent information-consultation (notably that relating to strategic planning) and ad hoc information-consultation procedures.

On the contrary, the French Court of Cassation has already ruled in favor of the independent nature of recurrent consultations regarding forecasting employment and skills management (GPEC- Gestion prévisionnelle des emplois et des compétences) and one-off consultations with the works council (now the CSE) on an economic redundancy project.9 In our opinion, this case law is perfectly applicable to distinguish mandatory recurrent consultations on strategic planning from one-off consultations.

It is also in this sense that the lower courts have ruled, on several occasions, in favor of a dissociation between consultations on strategic planning and ad hoc consultations on a specific project.10

In 2018, the Créteil Regional Court recalled that “no rule of positive law obliges the employer to consult the works council on strategic planning before initiating or completing the consultation on a specific project.11

In a more recent decision, the Paris Court of Appeal confirmed this principle by ruling that an employer could not be required to respect a priority by carrying out a consultation on strategic planning before a specific consultation on a particular project, as such a hierarchy does not result from either legal or conventional provisions.12

Nevertheless, two decisions rendered by the Nanterre Regional Court,13 in which the judge suspended the one-off project until the mandatory recurring consultation on strategic planning had been arranged, are sometimes used in an attempt to have a one-off project suspended.

However, at no time do these decisions lay down a principle of suspension of the project until the end of the legally required recurrent consultation on strategic orientations.

Moreover, none of these decisions requires the employer to carry out, prior to the specific information-consultation procedure relating to a given project, an update on the strategic planning. In reality, the court only imposed the implementation of the legal procedure on the strategic planning that had not been undertaken during the year under consideration14; the decision would have been different, in our opinion, if the company had fulfilled its obligation to inform and consult on strategic planning.

Mohamed Materi is a Partner, and Louis van Gaver is Of Counsel, with Littler France

A version of this article was first published in “Les Cahiers du DRH“ n°288.

See Footnotes

1 French Labour Code, art. L.2312-8 et seq.

2 French Labour Code, art. L. 2312-37 and L. 2312-39. For a detailed description of the applicable procedure, refer to the section in the present issue entitled “Modalités et délais de consultation du CSE en schémas”

3 French Court of Cassation, Criminal Chamber, 2 December 1992, no. 89-86.240.

4 Which involves following a specific procedure set out in articles L. 1233-1 et seq. of the French Labour Code.

5 French Court of Cassation, Criminal Chamber, 4 November 1997, no. 96-84.594.

6 French Labour Code, art. L. 2312-39, quoted above.

7 French Labour Code, art. L. 2312-39, quoted above.

8 French Labour Code, art. L. 2312-55.

9 French Court of Cassation, 30 September 2009, no. 07-20.525.

10 Paris Court of Appeal, Division 6, Ch. 2, 3 May 2018, no.17/09307, Natixis; see also: Marseille Regional Court, 7 Sept. 2018, no.18/03389; Bobigny Regional Court, 10 July 2018, no.18/01118; Créteil Regional Court, interim order, 30 August 2016, no.16/01010.

11 Créteil Regional Court, interim order, 5 July 2018, no.18/00733, confirmed by Paris Court of Appeal, Division 6, Ch. 2, 31 Jan. 2019, no.18/16898.

12 Paris Court of Appeal, Division 6, Ch. 2, 10 December 2020, no.19/22258

13 Nanterre Regional Court, 28 May 2018, no.18/01187; Nanterre Regional Court, 11 July 2019, no.19/02211.

14 The periodicity, in this case, is annual.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.