Labour law in France has undergone significant changes over the course of the last few years. Among the reforms one of the most significant is Act No. 2016-1088 of 8 August 2016, known as the ‘Labour Act’ or the ‘El Khomri Act’, relating to labour, the modernisation of social dialogue and the securing of career paths in the workplace. This Act aimed in particular to give greater scope to collective bargaining and to to bring about changes to several rules applicable to companies and employees.
Since 2016, however, employment law has continued to evolve. In particular, the decrees adopted in September 2017 have radically altered the rules governing collective bargaining, social dialogue, dismissal and the security of employment relationships.
It is therefore necessary, in 2026, to view the Labour Act within the broader context of developments in labour law. Several measures resulting from this reform remain in force, whilst others have been amended, supplemented or replaced by more recent provisions.
Collective bargaining plays a central role
One of the main objectives of the 2016 reform was to strengthen the role of social dialogue and collective bargaining within companies. This approach was subsequently pursued to a large extent by the 2017 Macron decrees.
Company-level bargaining now enables the social partners to establish a number of rules tailored to the company’s circumstances, whilst complying with the mandatory provisions of the Labour Code. Collective agreements may, in particular, cover the organisation and duration of working time, pay and certain working conditions.
The 2017 regulations reinforced this approach by giving greater prominence to company-level agreements in the relationship between the various levels of collective bargaining. The aim was, in particular, to provide companies with a framework better suited to their constraints and their business activities.
This development has also changed the way in which companies need to approach their relations with employee representatives. Since the introduction of the Social and Economic Committee (CSE), social dialogue has been based on a different organisational structure to that which existed when the Labour Act was passed.
Redundancy on economic grounds: a more detailed framework
The 2016 reform also changed the definition of redundancy on economic grounds. The Labour Code now sets out several situations that may constitute economic grounds, including economic difficulties, technological change, the reorganisation of the business necessary to safeguard its competitiveness, or the cessation of business.
Economic difficulties may, in particular, be characterised by a significant fall in orders or turnover, operating losses, a deterioration in cash flow or in gross operating surplus, in accordance with the conditions laid down in the Labour Code.
One of the aims of this definition is to make the assessment of the economic grounds more predictable and to enable the employer to justify their decision on the basis of objective evidence.
The situation regarding corporate groups also remains a particularly sensitive issue. Assessing the economic grounds and the relevant sector of activity can have significant consequences when a company is part of a group. A detailed analysis of the group’s economic situation and organisational structure is therefore essential before any redundancy proceedings are initiated.
Protection in the event of termination of an employment contract
The reforms introduced since 2016 have also sought to provide greater certainty in relations between employers and employees, particularly in the event of the termination of an employment contract.
The 2017 regulations introduced, amongst other things, a scale of compensation applicable, subject to certain conditions, in the event of dismissal without real and serious cause. They also amended certain rules relating to the dismissal procedure, the grounds for dismissal and the time limits for challenging a dismissal.
The stated aim was to make the financial consequences of a dismissal challenged before the employment tribunal more predictable. However, this change does not prevent an employee from challenging their dismissal if they consider that it is not based on a genuine and serious ground or that the applicable procedure has not been followed.
For both the employer and the employee, the circumstances under which the contract is terminated must therefore be carefully considered. Any error in the procedure or in the grounds for dismissal may have significant consequences.
Occupational health: prioritising prevention
The reform of labour law has also brought about changes to the way employees’ health is monitored. The system now places greater emphasis on prevention and on tailoring medical check-ups to the risks associated with the role held.
The occupational health doctor plays a vital role in this process. In particular, they may recommend individual measures to adjust, adapt or redesign a post where the employee’s state of health warrants it.
This approach aims to help employees remain in work and prevent them from becoming excluded from the labour market. Monitoring an employee’s health must therefore take into account the nature of their work and the risks to which they are actually exposed.
The reform has also clarified the conditions under which a person may be deemed unfit for work. Where an employee is no longer able to carry out their duties for medical reasons, the opinion of the occupational health doctor is a key factor in the procedure.
Incapacity and the obligation to redeploy
The issue of unfitness for work remains particularly important in employment law. Where an employee is declared unfit for their post, the employer must, subject to any exceptions provided for by law, seek a suitable alternative post that matches the employee’s abilities.
This assessment must take into account the conclusions and recommendations of the occupational health doctor. The employer must therefore consider the options available to enable the employee to continue working under conditions that are compatible with their state of health.
In certain situations, however, the occupational health doctor’s report may expressly state that allowing the employee to continue in their post would be seriously detrimental to their health, or that their state of health precludes any redeployment. In such cases, dismissal proceedings may be initiated in accordance with the provisions of the Labour Code.
The applicable rules also differ depending on whether or not the incapacity results from an accident at work or an occupational illness. It is therefore essential to identify the cause of the incapacity before initiating proceedings.
Posting of workers and the fight against illegal employment
Regulations governing the posting of workers have also been tightened in recent years. Posting allows a company established in another country to temporarily deploy its employees to France, provided that the applicable rules are complied with.
This option is subject to certain conditions in order to combat fraudulent practices and situations of unfair social competition. In particular, the companies concerned must comply with certain reporting obligations and the French rules applicable to posted workers.
The issue of posting must therefore be distinguished from that of undeclared work or fraudulent posting. Companies that make use of this scheme must carefully check their obligations before the employees concerned commence work.
Fixed-term contracts and the regulation of short-term contracts
The use of fixed-term contracts is also governed by the Labour Code. A fixed-term contract may not be used to fill, on a long-term basis, a post linked to the undertaking’s normal and permanent activities.
The use of a fixed-term contract must fall within one of the categories permitted by law, such as replacing an absent employee or a temporary increase in the company’s workload.
The rules governing the duration of the contract, its renewal and the succession of several fixed-term contracts must also be complied with. Failure to do so may, in particular, entitle the employee to request that their contract be reclassified as a permanent contract.
The issue of short-term contracts therefore remains a significant challenge for businesses, which need to ensure their contractual practices are sound in order to avoid the risk of legal disputes.
Preventing stress and psychosocial risks
Protecting employees’ health is not just about physical risks. The prevention of psychosocial risks – including work-related stress, harassment and certain forms of violence in the workplace – is also a key priority.
The employer must take the necessary measures to ensure the safety and protect the physical and mental health of workers. This obligation involves, in particular, identifying occupational risks and implementing appropriate preventive measures.
Workload, the way the organisation is run, management practices, relationships between colleagues and even situations of conflict can all contribute to the emergence of psychosocial risks.
Prevention must therefore be integrated into the company’s overall organisation and not be limited to providing individual support to an employee when a problem arises.
Employment law continues to evolve
The 2016 Labour Act marked a significant milestone in the transformation of French labour law, but it can no longer be viewed in isolation in 2026. In particular, the 2017 Macron decrees have profoundly altered the framework governing collective bargaining, social dialogue and the termination of employment contracts.
Further legislative and case-law developments have since supplemented this framework. Labour law is therefore a particularly dynamic field, in which any rule applicable to a given situation must always be checked against the current version of the Labour Code and recent case law.
For both employees and employers, the consequences of a mistake can be significant: a disputed dismissal, the reclassification of a fixed-term contract, failure to redeploy an employee, a breach of the duty of care, or an irregularity in a termination procedure.
Why should you consult an employment lawyer?
A labour law issue can quickly escalate into a legal dispute if statutory or contractual obligations are not properly met. Consulting a solicitor enables the situation to be analysed in the light of the relevant legislation, the collective agreement and case law.
Whether it is a case of redundancy, incapacity for work, a dispute between an employee and an employer, an issue relating to a fixed-term contract, or a dispute before the employment tribunal, legal support can help ensure that the necessary steps are taken correctly and that your interests are effectively defended.
In 2026, labour law reform therefore does not consist of a single piece of legislation: it is the result of a series of laws that have gradually transformed employment relations. An up-to-date legal analysis is essential to determine the rights and obligations of each party.
