How to Determine Which Collective Agreement Applies to Your Company?

Every company in the private sector is generally covered by a branch collective agreement. This text sets the rules regarding minimum wages, working hours, leave, benefits, and contract termination. Nonetheless, identifying the correct collective agreement remains a challenging task for many leaders and HR managers.

The error of applying the wrong agreement is not trivial: using the incorrect collective agreement exposes the employer to salary back-payments, reclassification of contractual benefits, and, in severe cases, employment tribunal judgments resulting in damages. The payslip must mandatorily mention the applicable collective agreement (Article R.3243-1 of the French Labour Code), making any mistake immediately visible to employees and regulatory bodies.

In this article, DAIRIA Law guides you step by step to accurately determine which collective agreement applies to your company, considering both straightforward situations and more complex cases of multiple activities or restructuring.

Foundational Principle: The Main Activity of the Company

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

This does not refer to the corporate purpose registered with the commercial registry or the APE code assigned by INSEE. The Court of Cassation has repeatedly reminded that the APE code constitutes merely a simple presumption, which can be overturned by evidence of the activity actually exercised (Cass. soc., November 10, 2010, n°09-42.255). In practice, the judge seeks to identify the activity that employs the most workers or generates the highest revenue.

How to Identify the Main Activity Practically?

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

• Revenue Criterion: The activity generating the largest share of revenue is considered the main activity. This criterion is preferred for commercial companies.
• Employee Count Criterion: The activity employing the greatest number of employees is deemed the main activity. This criterion is preferred for industrial and mixed companies.

Case law allows judges some discretion to choose the most relevant criterion according to the situation. In a ruling dated April 23, 2003 (Cass. soc., n°01-41.196), the Court of Cassation confirmed that the trial judge has sovereign discretion to assess the main activity, provided they justify their decision.

The Territorial and Professional Scope of the Collective Agreement

Once the main activity has been identified, it is necessary to verify that the company falls within the scope of the corresponding collective agreement. Each agreement precisely defines its scope based on three dimensions:

Professional Scope

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

Territorial Scope

Most collective agreements have a national scope. However, some regional or departmental agreements still exist, particularly in the building, agriculture, or metallurgy sectors (prior to the 2024 overhaul). It must be verified that the company’s location is indeed covered.

Extension by Ministerial Order

When a collective agreement is extended by a ministerial decree (Article L.2261-15 of the French Labour Code), it applies to all companies falling within its scope, including those that are not members of one of the signatory employer organizations. In the absence of an extension, only companies that are members of a signatory organization are bound.

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

Special Cases: Companies with Multiple Activities

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

Accessory Activities Related to the Main Activity

When a secondary activity is a natural extension of the main activity, the entire company is covered by the agreement of the main activity. For example, a furniture manufacturing company that has a sales showroom is covered by the furniture industry agreement, as sales are ancillary to manufacturing.

Distinct Autonomous Activities in Separate Establishments

When a company conducts clearly differentiated activities in separate establishments, each establishment may be subject to a different collective agreement. The Court of Cassation permits this multiplicity of agreements, provided that the establishments have real management autonomy and that the activities are substantially distinct (Cass. soc., November 18, 1998, n°96-42.997).

For an establishment to be considered distinct in a conventional sense, it generally needs to have:

• Its own management or substantial management autonomy;
• Personnel specifically assigned to the relevant activity;
• A separate geographical location (a criterion that is not systematic but frequently applies).

Mixed Activities Without Distinct Establishments

This is the most complex scenario. When a company conducts various activities in the same location, relevant to different agreements without any being clearly ancillary, the agreement of the main activity must be applied according to the previously outlined criteria (revenue or employee count). The Court of Cassation categorically rejects the distributive application of multiple agreements within the same establishment (Cass. soc., January 26, 2000, n°97-45.476).

Special Situations to Be Aware Of

Employer Groups

Employer groups (Articles L.1253-1 et seq. of the French Labour Code) present a specific question. When the group includes businesses under different agreements, the law stipulates that the group must apply the collective agreement of the branch whose member enterprises are involved, or, failing that, one of its choice, provided that employees receive at least equivalent benefits. 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 case of a business transfer (Article L.1224-1 of the French 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 French Labour Code provides for a mechanism to challenge the seller’s agreement, with a survival period of 15 months (3 months of notice + 12 months of survival) during which transferred employees retain the benefits of the former agreement unless a substitution agreement is concluded.

Similarly, when a business changes its primary activity, the applicable agreement may change. The employer must inform employee representatives and employees, and the transition occurs according to the same challenge mechanism.

Absence of an Applicable Collective Agreement

It occurs, though rarely, that no collective agreement covers the activity of a company. In this case, the employer applies only the Labour Code and may voluntarily choose to apply any convention of their choice, provided it is done comprehensively and sustainably. The voluntary application of a convention binds the employer as if they were legally bound.

Mandatory Mention on the Payslip

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

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

It is therefore crucial to regularly verify that the convention mentioned on the payslips accurately reflects the reality of the activity performed. A periodic conventional audit is recommended, particularly in the case of activity diversification, mergers, or internal reorganization.

Practical Tools to Identify Your Collective Agreement

Several resources are available to determine the applicable agreement:

• The Légifrance website (legifrance.gouv.fr): this site lists all the currently applicable 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 serves as a useful but not determinative indicator. You will find it on your Kbis extract or your situation notice from the SIRENE register.
• The services of DREETS (formerly DIRECCTE): labor inspectors can inform you about the applicable collective agreement for your activity.
• Your accountant or labor law attorney: in case of doubt, especially for multiple activities, professional advice is essential to secure your choice.

Points of Vigilance for Employers

Determining the applicable collective agreement is not a one-time 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 changes significantly, the main activity may shift.
• Merger, division, or partial asset transfer: these operations often lead to a change in the applicable agreement, triggering a challenge to the former agreement.
• Creation of a distinct establishment: check whether the new establishment falls under the same agreement as the head office.
• URSSAF control or labor inspection: control bodies systematically verify the consistency between the activity performed and the agreement applied.

In case of doubt, DAIRIA Law supports you in conducting a complete conventional audit, allowing you to secure your social obligations and anticipate litigation risks.

FAQ

Does the APE code automatically determine the applicable collective agreement?

No. The APE code (Activité Principale Exercée) assigned by INSEE is only a simple presumption. The Court of Cassation has repeatedly confirmed that it is the activity actually exercised that determines the applicable agreement, not the APE code (Cass. soc., November 10, 2010, n°09-42.255). If your actual activity does not correspond to your APE code, the real activity takes precedence. You can even request a 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 demand the benefits of the more favorable provisions of the agreement that actually applies, particularly regarding minimum wages, bonuses, holidays, or notice periods. Salary back-payments can be required for a period of up to three years (prescription under Article L.3245-1 of the French Labour Code). URSSAF may also carry out a reassessment of contributions if there are differences between the two agreements.

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

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

How can I find out if my collective agreement is extended?

You can check if your agreement is extended on the Légifrance website, in the informational sheet for each collective agreement. Extension is granted by a decree from the Minister of Labor (Article L.2261-15 of the French 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 employer organizations. Nearly all major branch agreements are currently extended.

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

In the event of a dispute, it is the labor tribunal that decides on the applicable agreement. The judge relies on the activity actually carried out by the company, analyzing the documents produced by the parties (statutes, Kbis, contracts, revenue distribution, organization chart, etc.). It is advisable to compile a solid file documenting your main activity before any litigation. DAIRIA Law can assist you in this process.