The Collective Performance Agreement: a tool for flexibility in the face of the challenges of the current crisis

Written on 15 May 2020

The Covid-19 epidemic is forcing companies to adapt quickly to variations in their activity in order to ensure their sustainability and safeguard employment.

The Collective Performance Agreement (CPA) is a mechanism to be considered when the company wishes to adapt its organisation and in particular modify employment contracts to meet the current challenges of the crisis.

1. Possibility to modify contractual provisions on certain topics

The CPA allows a company to modify one or more elements of the employment contract (working hours, remuneration, professional or geographical mobility), without having to justify current and proven economic difficulties.

This device can therefore be implemented even if the company is unable to justify a valid economic reason within the meaning of the texts and French case law .
The undertaking must, however, clearly define the objectives of the agreement, which must be achievable:

  • to meet the operating needs of the undertaking; OR
  • to preserve or develop employment.

Such a mechanism is therefore particularly interesting in the current context, in the total absence of visibility on the outcome of the crisis.

Content of the APC

The conclusion of a APC allows the company to make adjustments to the contrary provisions of the employment contract on the following topics (which constitute, in principle, a modification subject to the prior written agreement of each employee):

  • Working hours, their organisation and distribution: reduction or increase in working hours without a corresponding increase in employee remuneration;
  • Remuneration in compliance with the minimum hierarchical wages provided for by law or collective agreement: reduction of the basic salary or variable remuneration, elimination of bonuses, thirteenth month's pay, etc.;
  • The conditions of professional or geographical mobility within the company: redefinition of the attributions of certain positions, modification of the employees' place of work outside the geographical sector, etc.

Thus, the content of the agreement may automatically contravene the contrary provisions of the employment contract of all or part of the employees, whether or not on a temporary basis.

The CPA may also contain additional commitments from the employer, in particular concerning the conditions under which managers employees, corporate officers and shareholders must make efforts proportioned with those required of employees.

It is likely that certain employee representatives will make their signature conditional on the making of such commitments in the current economic context.

2. Conditions of validity of the CPA

In the presence of trade union delegates

For companies with one or more trade union delegates, the validity of the CPA will be subject to its signature by one or more trade union organisations having received more than 50% of the votes cast for representative organisations in the first round of the last elections (or 30% + referendum).

In case of absence of trade unions in the company

If the company does not have a trade union delegate, it will be necessary to adopt derogatory rules for collective bargaining with elected representatives or employees, whether or not they are mandated.

Role of the Social and Economic Committee (“SEC”)

The SEC does not have to be consulted specifically on the draft CPA, but it can mandate a chartered accountant to provide any analysis useful to the trade union organisations in preparing this negotiation.

At the same time, in companies with more than 50 employees, it should be considered whether the implementation of the measures provided for in the CPA will be such as to require consultation of the CSE as part of its duties.

3. Terms for implementing the agreement at the end of the negotiations

  • Notification of the existence and content of the CPA to the employees concerned as well as their right to accept or refuse the application of the CPA.
  • One-month reflection period to inform the employer in writing of the refusal.
  • In the absence of an express refusal by the employee, the provisions of the APC automatically replace the contrary and incompatible clauses of his or her employment contract at the end of the one-month period.
  • If the employee expressly refuses, the employer may dismiss him/her within two months. This is a sui generis ground for dismissal (and not a dismissal for economic reasons) so that the employee will only be entitled to severance pay, notice of termination and a contribution to his personal training account of 3,000 euros.

The CPA is thus a more flexible and simple mechanism than dismissal for economic reasons: no obligation to redeploy, no priority for re-employment, no support measures such as employment security agreements (“contrat de sécurisation professionnelle”) or redeployment leave (“congé de reclassement”).

We remain at your disposal to provide you with more information or to assist you in the implementation of this mechanism.