Optimisation of working time: how to use legal tools to improve working time management
November 2017 | EXPERT BRIEFING | LABOUR & EMPLOYMENT
French regulations on working time, and namely the 35-hour rule, can be too rigid a framework for companies needing flexibility and adaptability. A common rule is that working time is counted within one week. As soon as the employee works more than 35 hours a week, he or she should be entitled to extra payment for overtime (overtime is usually paid at 125 to 150 percent of the applicable hourly salary), even if during another week in the same month, he or she had (or might have) worked less than 35 hours. In practice, under the 35-hour rule, a company facing a temporary increase of activity has to ask its employees to work overtime or hire temporary workers. Those solutions are both rigid and expensive, as they require extra payments (overtime and temporary work indemnities) and formalities.
The total amount of overtime performed by each employee is also counted during the year. Overtime performed above the annual threshold (fixed by the company agreement, the collective bargaining agreement, or by the law – usually around 100 to 250 extra hours per year) should grant a compensatory rest period in addition to the overtime payment.
Broadly speaking, asking employees to work overtime may lead to extra costs corresponding to extra rates and compensatory rest periods. Consequently, it may be in a company’s best interests to adapt its working time and work organisation in order to gain flexibility and adaptability. Several adjustments to the 35-hour rule are enabled by the French Labour Code.
Adapting the 35-hour rule to a company’s activity
Companies may face high activity and lower activity periods during the same year. Applying the 35-hour rule without any adjustment in this situation is not the optimal solution. When faced with this situation, companies may implement an ‘annualisation’ of working time. This allows them to organise working time, taking into account a period exceeding the week and up to three years if a collective bargaining agreement enables it.
In practice, a reference period of one year is commonly used. This system allows the company to count extra hours, referring to an annual threshold (1607 hours) and not to the weekly limit (35 hours).
In this situation, a company will not pay overtime to employees unless they work more than 1607 hours a year, or more than a weekly limit eventually stated in the agreement (such a weekly limit is mandatory if the chosen reference period exceeds one year).
If during the year, due to an increase of activity, employees are temporary asked to work above a 35-hour a week (and below the weekly limit, if stated), those hours are not immediately considered as overtime but are instead counted in a specific working time balance. This overtime is then compensated by periods in which an employee works less than 35 hours a week. At the end of that period, a company counts the number of hours worked by each employee and pays as overtime any hour worked above 1607 hours. Over the year, overtime periods may be compensated by low activity periods.
This system, when used properly, enables companies to save money by paying less overtime, using less temporary workers and optimising employees’ working time regarding real workload. This can be implemented by a company agreement, or by a collective bargaining agreement (in some sectors, collective bargaining agreements indeed provide for such a system and may be directly applied within a company).
If no company or collective bargaining agreement is applicable within the company, a subsidiary system has been implemented by the French Labour Code, allowing companies which cannot apply any collective agreement to increase the reference period up to nine weeks, instead of the common one week.
Making executives’ working time flexible
Companies may require their executives to manage their working time and work more in strong periods of activity. Broadly speaking, it may even be difficult for the company to ensure its high level executives that their working time will not exceed 35 hours a week, or 1607 hours a year.
Executives’ responsibilities and level of salary may lead the company to consider that they should work more than 35 hours a week in order to handle their duties. The French Labour Code allows companies to implement two different types of ‘forfeits’ for executives. First, the ‘hourly based forfeit’. This enables the company and the executive to negotiate a number of hours which the executive may perform in the month, or in the year. The executive shall then manage his or her workload within this ‘forfeit’, working more or less during the different periods of the year depending on the company’s needs.
This forfeit allows the company to pay the executive the same salary every month, taking into account the base salary and the contractual overtime resulting from the forfeit. At the end of the year, the company counts the number of hours worked by the employee and, if needed, makes a supplementary payment corresponding to the hours worked above the forfeit. The annual threshold triggering the granting of a compensatory rest period is not applicable to executives working under hourly-based forfeit.
This system may be effective for middle-level executives from whom a company expects flexibility, who are not subject to collective working hours, but who are not autonomous enough to be subject to the second type of forfeit.
The second forfeit is the ‘day-based forfeit’ or ‘fixed-day forfeit’. This forfeit goes further in the flexibility of working time, as it provides for a number of days to be worked by the executive during the year (up to 218 per year), without any reference to the hours worked within each day. The number of hours worked by the executive during each day is not counted in any way, and rules on maximum working time and overtime are not applicable. The only limit is that minimal rest periods (11 hours a day, 35 hours a week) are respected. ‘Fixed days forfeits’ may only be agreed with high-level executives who autonomously manage their working time and not subject to collective working hours.
The salary granted to executives under a ‘fixed-day forfeit’ shall be higher than the normal salary for the same position.
These two forfeits can be implemented provided a company agreement or a collective bargaining agreement enables it. Those two systems may be, under strict limits, extended to non-executives placed in specific situations.
Ensuring continued activity at night, on weekends and during public holidays, when needed
Companies may have to ask employees to work, or at least to remain available, during weekends, during public holidays or at night. These needs may be permanent when a company cannot close for industrial, safety or activity reasons. In this case, activity may be organised using sequential crews or shift work. These systems may be implemented through company agreement, collective bargaining agreements or under limited conditions by the employer itself.
The need may also be temporary. In this case, an employer may have to think about how to ask employees to work at night, perform on call or work on Sundays. This may require authorisation from the work inspector (for Sunday work, for example). Therefore, it may be important to anticipate the needs of the company before they arise and to prepare to implement exceptional work when necessary.
A company agreement may then usefully provide for exceptional work and extra payments applicable to night work, on call work or Sunday work, which would be applicable if such hours are performed.
Broadly speaking, we recommend analysing what allows or bans applicable collective bargaining agreements regarding annualisation, forfeits, night and Sunday work, and whether or not collective provisions are appropriate. Depending on the adequacy of the collective provisions, a company agreement may be the most relevant when adapting work requirements to a company’s needs.
Grégory Chastagnol and Barbara Mollet are attorneys at Fromont Briens. Mr Chastagnol can be contacted on +33 (1) 4451 6380 or by email: firstname.lastname@example.org. Ms Mollet can be contacted on +33 (1) 4451 6380 or by email: email@example.com.
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Grégory Chastagnol and Barbara Mollet