Employers must look for a purchaser before closing a site in France
Multinational employers with smaller sites in France quite often are surprised to hear that, during international restructurings, the requirements of French law may cause them to rethink their timeline, strategy and/or general approach when implementing measures that affect their French entity. We describe one such special requirement which has the potential to make restructurings grind to a halt.
Requirement to search for a purchaser in case of site closure
Since March, 2014, any French employer with at least 1000 employees (or who belongs to a group of companies with at least 1000 employees) must, by law, take appropriate steps to look for a purchaser for the site before any site closure which would lead to redundancies. The search for a purchaser must be carried out in parallel with the consultations of the works council on the redundancies which may result if the site is closed.
Timeline and process
The search for a purchaser must be announced, at latest at the start of the consultation on the redundancies, to the works council, the local mayor, and the labour administration, which informs the other relevant local, regional and/or national elected representatives. The employer must inform potential purchasers of his intention to sell the site and give interested parties – who are subject to an obligation of confidentiality – access to all appropriate information, with the exception of any information which would compromise the interests of the employer or the continuation of the rest of his business. The employer must review any offers received, and must give the reasons for his answer to each offer.
The works council is informed of any offers within 8 days of their receipt and, until the end of the time allowed for consultation on the redundancies, can issue an opinion. It can also take part in the search for an acquirer and make proposals. It can appoint an outside consultant, whose fees are paid by the employer, to assist it. The employer must present to the works council any offer he considers is acceptable, indicating the reasons for this choice with particular reference to the capacity of the potential purchaser to ensure the survival of the business and continued employment. He must obtain the works council’s opinion before accepting any such offer. If no offer is received, or the employer considers that none is acceptable, he must present a report to a meeting of the works council.
Court proceedings possible
Within 7 days of said report, the works council can bring suit before the commercial court if it considers that the employer has not taken adequate steps to search for a purchaser or if he has refused an offer which the works council considers is serious. The employer who fails to respect these new requirements may be required to reimburse any state or local government aid granted in connection with the site in question over the previous two years, and could see the labour administration refuse the redundancy plan related to the site closure