Professional branch (« branche professionnelle ») pursuant to French law
What is a professional branch ("branche professionnelle") in France?
The professional branch groups together companies belonging to the same sector of activity - a grouping of companies with the same main economic activity - and covered by an agreement or collective agreement. In French labor law, the professional branch is defined as the field of application of a collective bargaining agreement.
Scope of application of the French concept of professional branch (“branche professionnelle”)
The task of the branches is to define the rules of work and the guarantees applicable to employees, and to regulate competition between companies by setting minimum wages.
However, the fragmentation of collective bargaining agreements has led to a restructuring of the branches since 2009, with the Poisson report (“Rapport Poisson”).
Industry collective agreements are national in scope, but certain provisions can be defined, adapted or supplemented locally.
The employers' organizations affiliated to the representative employers' organizations in the industry may negotiate collective bargaining agreements at the regional, departmental or local level, within the framework of the industry, and request their extension.
Extension and expansion of branch agreements pursuant to French law
The extension procedure for branch agreements aims to make the provisions of the agreement compulsory for all companies within its scope. It requires the intervention of a ministerial order and a procedure guaranteeing the representativeness of the employers' organizations that negotiated the agreement.
Expansion allows an extended agreement to be applied outside its professional or territorial scope, if the existing agreement cannot be revised. The conditions for expansion have been standardized, requiring "similar conditions" with regard to the jobs performed in the sector concerned. The Minister of Labor has discretionary power for extension and expansion, and may refuse for reasons of general interest (CE 28 Sept. 2022, n° 442574)
Restructuring of professional branches in France
The restructuring of professional branches in France was initiated by the law of March 5, 2014 on professional training, employment and social democracy. The Labor Law of August 8, 2016 had accelerated the process by setting objectives to be achieved.
The Minister of Labor may initiate a procedure to merge the scope of application of the collective agreements of a branch with that of a related branch with similar social and economic conditions in certain cases, such as when the branch has fewer than 5,000 employees, has a contractual activity characterized by the low number of agreements signed and negotiation topics covered, or has a geographical scope of application that is solely regional or local.
The Minister shall proceed with the merger after receiving the reasoned opinion of the National Commission for Collective Bargaining, Employment and Vocational Training. Temporary differences in treatment between employees resulting from the merger may not be invoked for a period of five years. If no agreement is reached within this period, the provisions of the collective agreement of the branch to which the merger is attached remain applicable.
Articulation of branch and company agreements pursuant to French law
As a reminder, the branch agreement is an agreement between one or more groups of companies belonging to the same sector of activity and one or more representative trade union organizations. This agreement concerns working conditions, employment and social guarantees granted to employees. It is possible to add rules specifically adapted to a professional branch in addition to the applicable French general law.
On the other hand, a company agreement is a text negotiated and signed between the company's management and the employees' representatives, during the mandatory annual negotiations, concerning remuneration, working hours, professional equality and quality of life at work, or even the forward-looking management of jobs and skills.
According to article L. 2253-1 of the French Labor Code, the provisions of the branch agreement take precedence over those of the company agreement in thirteen areas, such as minimum wages, classifications, the mutualization of funds for the financing of paritarianism and professional training, collective guarantees of supplementary social protection, professional equality between women and men, etc.
However, if the company agreement provides "at least equivalent" benefits, it applies.
If the company agreement is concluded before or after the date of entry into force of the branch agreement, it does not apply in these areas, unless it provides at least equivalent or more favorable guarantees. If the branch agreement provides for a lock-in clause, the company agreement may not contain provisions contrary to those of the branch agreement, unless it provides at least equivalent or more favorable guarantees.
If there is no lock-in clause, the company agreement may provide for more favorable, different or less favorable provisions. In the absence of a company agreement, the branch agreement applies.
French legal texts governing the professional sector:
Labor Code, art. L. 2232-5 et seq, L. 2241-1 et seq, L. 2253-1 et seq, L. 2261-32 et seq, L. 2271-1.