How to Determine the Applicable Collective Agreement for Your Business

Every private sector company is, in principle, covered by a branch collective agreement. This text sets the rules concerning minimum wages, working hours, leave, provisions, and termination of contracts. However, identifying the correct collective agreement remains a challenging task for many leaders and HR managers.

The error in application is not insignificant: applying the wrong agreement exposes the employer to back pay claims, reclassification of contractual benefits, and, in the most serious cases, to labour court judgments accompanied by damages. The payslip must mandatorily mention the applicable collective agreement (Article R.3243-1 of the French Labour Code), which makes any error immediately visible to the employee and the control bodies.

In this article, DAIRIA Avocats guides you step by step to reliably determine which collective agreement applies to your business, regardless of whether the situation is straightforward or involves more complex cases of multiple activities or restructuring.

The Foundational Principle: The Main Activity of the Company

French law uses an objective criterion to determine the applicable collective agreement: the main activity actually carried out by the company. This principle is laid down in Article L.2261-2 of the Labour Code, which states that the applicable collective agreement is the one corresponding to the employer’s main activity.

It does not relate to the business purpose registered in the commercial register or the APE code assigned by INSEE. The Court of Cassation has repeatedly reiterated that the APE code is merely a simple presumption that can be overturned by evidence of the activity actually performed (Cass. soc., 10 November 2010, n°09-42.255). In practice, the judge seeks to determine what activity employs the largest number of employees or generates the highest revenue.

How to Identify the Main Activity in Practice?

For industrial and commercial companies, two criteria are traditionally used:

The revenue criterion: the activity that generates the largest portion of revenue is considered the main activity. This criterion is preferred for commercial companies.
The employee criterion: the activity that employs the largest number of employees is considered the main activity. This criterion is preferred for industrial and mixed companies.

Jurisprudence allows the judge a degree of discretion to choose the most relevant criterion based on the situation. In a ruling from 23 April 2003 (Cass. soc., n°01-41.196), the Court of Cassation confirmed that the trial judge has sovereign discretionary power to determine the main activity, provided they justify their decision.

The Scope of Application of the Collective Agreement

Once the main activity is identified, it must be verified that the company falls within the scope of application of the corresponding collective agreement. Each agreement precisely defines its scope according to three dimensions:

The Professional Scope

The collective agreement lists the covered activities, generally referring to the NAF/APE codes. For example, the national collective agreement for technical study offices (SYNTEC, IDCC 1486) targets companies whose main activity corresponds to NAF codes 62.01Z, 62.02A, 62.09Z, 70.22Z, etc. If your company’s main activity corresponds to one of these codes, it falls within the professional scope of this agreement.

The Territorial Scope

Most collective agreements have a national scope. However, some regional or departmental agreements persist, particularly in the construction, agriculture, or metallurgy sectors (before the 2024 overhaul). It is essential to ensure that the company’s location is adequately covered.

Extension by Ministerial Decree

When a collective agreement is extended by a ministerial decree (Article L.2261-15 of the Labour Code), it binds all companies falling within its scope, including those not members of one of the signatory employers’ organisations. In the absence of an extension, only companies that are members of a signatory organisation are bound.

In practice, the vast majority of branch agreements are extended, simplifying determination: if your main activity falls within the professional and territorial scope of an extended agreement, it applies by right.

Specific Cases: Companies with Multiple Activities

The difficulty increases when a company engages in multiple activities governed by different collective agreements. Three situations must be distinguished.

Accessory Activities Linked to the Main Activity

When a secondary activity is the natural extension of the main activity, the entire company is covered by the collective agreement of the main activity. For instance, a furniture manufacturing company with a sales showroom falls under the collective agreement for the furniture industry, with sales being ancillary to manufacturing.

Distinct Autonomous Activities in Separate Establishments

When a company carries out distinctly different activities in separate establishments, each establishment may fall under a different collective agreement. The Court of Cassation accepts this plurality of agreements provided that the establishments have real management autonomy and the activities are genuinely distinct (Cass. soc., 18 November 1998, n°96-42.997).

For an establishment to be considered distinct in a conventional sense, it typically must possess:

Its own management or significant management autonomy;
Personnel specifically assigned to the concerned activity;
A geographically separate location (a criterion not systematic but frequently applicable).

Mixed Activities Without Distinct Establishments

This is the most delicate case. When a company operates in the same location with activities governed by different agreements and none is clearly ancillary, the collective agreement of the main activity must be applied according to the previously mentioned criteria (revenue or employee count). The Court of Cassation categorically rejects the distributive application of several agreements within the same establishment (Cass. soc., 26 January 2000, n°97-45.476).

Special Situations to Be Aware Of

Employer Groups

Employer groups (Articles L.1253-1 and following of the Labour Code) present a specific question. When a group comprises companies that are governed by different agreements, the law stipulates that the group must apply the collective agreement of the activity branch relevant to its member companies or, failing that, one of its choosing, provided the employees enjoy benefits at least equivalent. In practice, the group must determine a reference agreement, often the one applicable to the majority of its members.

Business Transfer and Change of Activity

In the event of a business transfer (Article L.1224-1 of the Labour Code), the acquirer may be bound by a different agreement than that of the seller. In this case, Article L.2261-14 of the Labour Code provides for a mechanism for calling into question the seller’s agreement, with a survival period of 15 months (3 months of notice + 12 months of survival) during which the transferred employees retain the benefits of the old agreement, unless a substitution agreement is reached.

Similarly, when a company changes its main activity, the applicable agreement may change. The employer must then inform employee representatives and employees, and the transition operates according to the same mechanism for questioning.

Absence of an Applicable Collective Agreement

It sometimes happens, though rarely, that no collective agreement covers a company’s activity. In this case, the employer only applies the Labour Code and may voluntarily choose to apply a convention of its choice, provided it is done in a comprehensive and lasting manner. The voluntary application of a convention commits the employer as if legally bound.

Mandatory Mention on the Payslip

Article R.3243-1 of the Labour Code mandates that the payslip must mention the title of the applicable collective agreement or, failing that, reference to the Labour Code for provisions relating to paid leave and notice periods. This mention constitutes a presumption of application that the employee may invoke to their advantage.

The Court of Cassation considers that mentioning a collective agreement on the payslip constitutes a commitment by the employer to apply this agreement, unless they demonstrate it was an error (Cass. soc., 15 November 2007, n°06-44.008). Conversely, the absence of a mention or an incorrect mention does not prevent the employee from claiming the application of the convention that is actually applicable.

It is therefore crucial to regularly check that the convention mentioned on payslips accurately reflects the reality of the activity undertaken. A periodic conventional audit is recommended, especially in cases of diversification of activities, mergers, or internal reorganisation.

Practical Tools to Identify Your Collective Agreement

Several resources are available to determine the applicable collective agreement:

The Légifrance website (legifrance.gouv.fr): it lists all currently valid collective agreements, classified by IDCC number (Identifiant Des Conventions Collectives). You can search for your agreement by activity or NAF code.
The APE/NAF code: assigned by INSEE upon registration, it constitutes a useful but not determinant indicator. You can find it on your Kbis extract or your notice of situation in the SIRENE directory.
DREETS services (formerly DIRECCTE): the labour inspection can inform you about the applicable agreement for your activity.
Your chartered accountant or employment law lawyer: in case of doubt, especially for multiple activities, professional advice is essential to secure your choice.

Points of Caution for the Employer

Determining the applicable collective agreement is not a one-off exercise. Several situations should alert you and lead you to reassess your conventional situation:

Change of activity or diversification: if the distribution of your revenue or workforce evolves significantly, the main activity may shift.
Merger, split, partial asset transfer: these operations frequently result in a change of the applicable agreement, calling into question the old agreement.
Creation of a distinct establishment: check whether the new establishment falls under the same agreement as the main one.
URSSAF or labour inspection control: control bodies systematically verify consistency between the undertaken activity and the applied collective agreement.

In case of doubt, DAIRIA Avocats can assist you in conducting a complete conventional audit, ensuring compliance with your social obligations and anticipating litigation risks.

FAQ

Does the APE code automatically determine the applicable collective agreement?

No. The APE code (Activity Principale Exercée) assigned by INSEE is merely a simple presumption. The Court of Cassation has repeatedly confirmed that it is the actual activity performed that determines the applicable agreement, not the APE code (Cass. soc., 10 November 2010, n°09-42.255). If your actual activity does not correspond with your APE code, the real activity takes precedence. You can indeed request modification of your APE code from INSEE.

What happens if my company applies the wrong collective agreement?

Applying an incorrect collective agreement exposes the employer to several risks. Employees may claim benefits from the more favourable provisions of the agreement that actually applies, particularly concerning minimum wages, bonuses, leave, or notice periods. Back pay can be demanded for a period extending up to three years (prescription under Article L.3245-1 of the Labour Code). URSSAF may also proceed with a correction of contributions if the bases differ between the two agreements.

Can an employer freely choose to apply a more favourable collective agreement?

An employer can decide voluntarily to apply a collective agreement other than the one they are legally bound to, provided that this application is comprehensive (all provisions of the chosen agreement) and does not deprive employees of the benefits of the legally applicable agreement. However, voluntary application creates a commitment that will be challenging to undo. The Court of Cassation considers that an employer who voluntarily applies a convention is bound to respect it fully.

How can I tell if my collective agreement is extended?

You can check if your agreement is extended on the Légifrance website, in the data sheet for each collective agreement. Extension is pronounced by ministerial decree (Article L.2261-15 of the Labour Code) and published in the Official Journal. An extended agreement applies to all companies within its scope, including those that are not members of the signatory employers’ organisations. Almost all major branch agreements are currently extended.

What should I do in case of disagreement with an employee about the applicable agreement?

In the event of a dispute, the labour court has the jurisdiction to determine the applicable agreement. The judge relies on the activity actually performed by the company, analysing the documents presented by the parties (statutes, Kbis, contracts, distribution of revenue, organisation chart, etc.). It is advisable to compile a solid file documenting your main activity before any litigation. DAIRIA Avocats can assist you in this process.