Shop Committee Consultation Rules in French Business Transfers
International Lawyer, Vol. 36, 2002
7 Pages Posted: 11 Nov 2006
French law requires employers to share information and consult with the shop committee (comite d'entreprise) in the face of mergers or acquisitions. Management is not obliged to obtain shop committee consent to contemplated transactions, but a formal information and consultation procedure must precede management's decision concerning proposed business combinations. If the shop committee submits a negative opinion, management may elect to disregard the committee's views and proceed with the transaction. However, management must not relegate the information and consultation procedure to an empty formality. In particular, management must not bind the company irreversibly before receiving the opinion of the shop committee and must maintain the freedom of choice to seek modification or require revocation of the transaction in accordance with the views expressed in the shop committee report. There is sharp controversy as to the appropriate point in time for management to disclose the pendency of a transaction to the shop committee, with potentially explosive labor consequences if the timing is wrong. This article explores how far the parties to a transaction may go before triggering the obligation to present the matter to the shop committee. It also discusses the required procedural steps in the consultation process and the nature of information that must be revealed to the shop committee.
Keywords: France, mergers and acquisitions, mergers, acquisitions, labor, labor law, shop committee, unions, employee, employer
JEL Classification: K10, K22, K31, K33
Suggested Citation: Suggested Citation