At the initiative of the French government, a draft bill related to the « social and solidary economy » was adopted after a first review by the Senate, and registered for review by the French parliament. Its Title II – Provisions facilitating the transmission of businesses to their employees– introduces new rights for the benefit of employees, and hence new obligations upon owners of very small, small and mid-sized companies .
Indeed, this title II creates an employees information right in the event of a sale of a business having less than 250 employees, to which is also added the existing mandatory consultation of the works council (Comité d’Entreprise) [1] in companies having 50 to 249 employees. Such information right forces the owner or operator of a business, or the majority shareholder of a company, to disclose to the employees a proposed transfer of the business or company with at least two months prior notice. Failure to give such prior notification may result in the sale being declared null and void.
In addition, the Economic Affairs Commission decided to add a further obligation to inform the employees every three years of possible opportunities for an employee buyout, in companies or businesses having less than 250 employees, whether or not a sale is planned.
It is yet too early to analyse in detail these new provisions, since their impact on small and mid-sized business owners will only be revealed by the subsequent governmental decrees and regulatory measures implementing the proposed law. We will keep you posted.
[1] The works council (comité d’entreprise) is a corporate body in charge of certain economic and social aspects of the company, introduced by law and mandatory in companies having more than 50 employees. It is composed of elected employees or union representatives.