The interests of companies undoubtedly lie at the heart of the reform of the French Labor Code introduced by the so-called Macron Ordinances of September 22, 2017. Driven by the concept of "flexicurity", the objective of the Government was to give more freedom and security to both companies and employees.
In this context, how to offer companies a more secure framework whereas French labor law is internationally known for its complexity, its rigidity and its large corpus of rules? One of the solutions adopted by the Government is to help better assess a risk so feared by French and foreign businesses: The litigation risk.
During the presentation of the five so-called "Macron" Ordinances on August 30, 2017, Minister of Labor Muriel Pénicaud declared that "the objective of the reform of the French Labor Code is to give more freedom and security to both companies and employees". This statement encapsulates the spirit of the reform: The French Labor Code must no longer only protect the interests of employees but it must also protect the interests of companies. The reform is not just part of the trend initiated during the past legislature with the LSE Law of June 14, 2013, the El Khomri Law of August 8, 2016, the Macron Law of August 6, 2017 and the Rebsamen Law of August 17, 2017. It actually amplifies it substantially.
Companies' interests lie at the heart of the reform. This idea is promoted through the concept of "flexicurity". Drawing on the Danish model, "flexicurity" is about giving more freedoms to companies while offering employees greater security. Very concretely speaking, this approach means that dismissals should be facilitated (more flexibility for companies) in return for a more efficient vocational training and lifelong learning scheme and a more protective unemployment insurance system (more security for employees).
The Macron Ordinances of September 22, 2017 primarily address the "flexibility" part, the "security" for the employees being supposed to be dealt with subsequently in the reform agenda. The concept of "flexibility" is not, however, alien to that of security. On the contrary, both concepts are closely connected, the one being the catalyst for the other. This stands out clearly in Macron Ordinance n°2017-1387 appropriately named "the predictability and securing of work relationships". But what does the concept of "securing", as driver of business flexibility, imply?
Based on the Macron Ordinances, "securing" clearly implies a limitation of the powers of the judge and, consequently, a diversion of employee-employer disputes away from courts. Indeed, bringing a dispute before the judge means that the parties are deprived of any decision-making power and implies that the outcome is necessarily uncertain. As such, it is per se a risk and must be recorded in companies' accounts as a contingent liability.
While the existence of an economic risk...