France - Labor Law Update - Opportunity?
This AP - Yahoo news update refers to a small but important step in creating a more flexible work force in one of Europe’s biggest economies.
Companies (small) in France will now be able to terminate workers with less than two years service for little, if any reason. The government hopes this move will (among other incentives) stimulate employment in small business.
Having recently returned from a trip to China visiting healthcare manufacturers it makes you wonder if this is not too little too late.
As a small business owner based in France however, I must say this is good news!
This may also provide the additional stimulus to some of our healthcare clients to establish some form of direct distribution operations in France as opposed to the classical “can you find us a distributor because we don’t want to hire our own people route”.
We can get you more information if you need it.
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This new law providing “employment at will” for the first 2 years is effective August 4 and is open to all French companies having 20 or less employees, no matter the size of the overall group or the revenue. This means that international groups who want to enter the French market will be able to employ staff in France and terminate them without having to justify of a good cause. There will however be a termination tax of 10% (8% to the employee and 2% to the unemployment fund) and a notice period of up to 1 month, but this is the price of flexibility.
This may seem like a small step compared to what is available in China, but it is great improvement compared to the legislation of other European countries such as Germany, Spain, Italy and even the UK.
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