Voluntarily Applying a Collective Bargaining Agreement in France: An Employer’s Guide

The application of a collective bargaining agreement (convention collective) does not always stem from a legal obligation tied to the company’s main activity. In many situations, an employer deliberately chooses to apply a collective agreement that would not normally be mandatory for it. This apparently harmless choice carries considerable legal consequences that every executive must understand before committing.

DAIRIA Avocats analyses the mechanisms of voluntary application, its forms, its effects and the possibilities of reversing course.

What is the voluntary application of a collective bargaining agreement?

Voluntary application of a collective bargaining agreement refers to the situation in which an employer decides, without being legally required to do so, to subject its company to the provisions of a given collective agreement. This approach differs from mandatory application, which results either from membership in a signatory employers’ organisation or from a ministerial extension order (arrêté d’extension) (Article L.2261-2 of the French Labour Code).

In practice, voluntary application may result from several situations:

• The employer wishes to provide a collective framework to its employees where no extended agreement covers its sector of activity
• The employer prefers to apply an agreement more favourable than the one normally applicable
• The employer is mistaken as to the applicable agreement and applies another one in good faith
• The employer takes over a company whose employees benefited from a different agreement

Whatever the initial motivation, the legal effects are identical once voluntary application is established.

The forms of voluntary application

The reference on payslips

The most common form of voluntary application results from mentioning a collective agreement on employees’ payslips. In accordance with Article R.3243-1 of the French Labour Code, the payslip must state the title of the applicable collective agreement. Where the employer records an agreement that is not legally imposed on it, this reference constitutes a commitment to apply that agreement.

The French Supreme Court (Cour de cassation) has consistently set out this principle: “the reference to a collective agreement on the payslip constitutes recognition of the application of that agreement to the company” (Cass. soc., 18 November 1998, No. 96-42.991). This case law has been confirmed on numerous occasions (Cass. soc., 15 November 2007, No. 06-44.008).

It is important to stress that this reference creates a rebuttable presumption (présomption simple): the employer may provide evidence to the contrary by demonstrating that it was a clerical error, but in practice this evidence is very difficult to produce where the reference has appeared on payslips for a significant period.

The reference in employment contracts

Including a reference to a collective agreement in employment contracts constitutes an even stronger commitment. Since the employment contract is binding as law between the parties, referring to a collective agreement in this document creates a contractual right for the benefit of the employee. The Cour de cassation considers that “the reference to a collective agreement in the employment contract constitutes a contractual clause” (Cass. soc., 13 March 2001, No. 99-45.651).

The consequence is major: unlike a unilateral commitment or a custom (usage), a contractual clause cannot be amended or removed without the individual consent of each affected employee. The employer therefore cannot unilaterally go back on this commitment.

The employer’s unilateral commitment

Voluntary application may also result from a formal unilateral commitment (engagement unilatéral) by the employer, for example through an internal memo, internal regulations or a decision posted within the company. This unilateral commitment binds the employer for as long as it has not been duly terminated in accordance with the procedure applicable to unilateral commitments.

Company custom

Finally, the repeated, constant and general application of a collective agreement may constitute a company custom (usage d’entreprise). For a custom to be recognised, three cumulative conditions must be met: generality (application to all staff or to an objective category), constancy (regular and non-random application) and fixity (determined and stable application criteria).

The legal consequences of voluntary application

The obligation to apply the entire agreement

One of the most debated questions in case law concerns the scope of the commitment: must an employer who voluntarily applies a collective agreement apply it in its entirety, or may it limit itself to certain provisions?

The Cour de cassation’s answer is nuanced. In principle, “an employer who decides to voluntarily apply a collective agreement is required to apply all of its provisions” (Cass. soc., 10 February 1999, No. 96-44.337). This principle rests on the idea that the collective agreement forms an indivisible whole, an overall balance between rights and obligations.

However, case law allows for exceptions. Where the employer’s commitment expressly relates only to certain provisions — for example a salary scale or a supplementary benefits scheme (régime de prévoyance) — the courts may limit the obligation to those provisions alone. The Cour de cassation has thus held that “where the employer’s commitment relates only to certain benefits of the collective agreement, employees cannot claim the benefit of the other provisions” (Cass. soc., 19 November 2008, No. 07-40.749).

In practice, the distinction between full and partial application depends on how the commitment is worded. A generic reference such as “National Collective Bargaining Agreement for the Metallurgy Industry” on the payslip entails full application, whereas a contractual clause specifying “the provisions relating to leave under CBA X are applicable” may limit the commitment.

Interaction with the mandatorily applicable agreement

Where the company is already subject to a mandatory collective agreement (by extension or employer membership), the voluntary application of another agreement creates a situation of overlap. In accordance with Article L.2254-1 of the French Labour Code, the employee may rely on the most favourable provisions of each of the two agreements, in accordance with the principle of favourability (principe de faveur).

This overlap can prove extremely costly for the employer. The comparison is carried out benefit by benefit, within each homogeneous category of provisions, in accordance with established case law (Cass. soc., 17 July 2001, No. 99-41.917). The employer then finds itself required to apply the most favourable arrangement drawn from two separate agreements.

Effects on current and future employees

Voluntary application benefits all employees present in the company at the time of the commitment, as well as employees hired subsequently, for as long as the commitment has not been validly terminated. No length-of-service or occupational-category condition can be relied upon, unless the initial commitment was itself limited to a specific category.

Terminating voluntary application

Termination as a custom

Where voluntary application results from a company custom or a unilateral commitment, the employer may put an end to it by complying with the custom-termination procedure established by case law. This procedure imposes three cumulative conditions:

1. Informing employee representatives: the Social and Economic Committee (comité social et économique, CSE) must be informed of the employer’s decision to terminate the custom. This information must be sufficiently precise to allow an informed discussion.
2. Individually informing employees: each affected employee must be personally informed, preferably in writing, of the termination of the custom. A simple posting is not sufficient.
3. Observing a sufficient notice period: the employer must allow a reasonable period between the announcement of the termination and its actual effective date. This period, assessed at the discretion of the lower courts, must allow for possible substitution negotiations. In practice, a period of three months is generally considered sufficient.

The Cour de cassation reaffirmed these requirements in a landmark ruling: “the employer may only abolish a custom after complying with the termination procedure, which requires informing employee representatives and each affected employee” (Cass. soc., 16 March 1989, No. 85-45.934).

The impossibility of terminating a contractual benefit

By contrast, where voluntary application results from a clause in the employment contract, unilateral termination is not possible. The employer must obtain the express consent of each employee to amend or remove the contractual reference to the agreement. The employee’s refusal does not constitute misconduct and cannot justify dismissal (Cass. soc., 14 May 1998, No. 96-43.767).

An employer who nonetheless wishes to remove the benefit may consider a dismissal on economic grounds if the removal is justified by genuine economic difficulties, but it will have to comply with the entire redundancy procedure and pay the corresponding compensation.

The effects of termination

The proper termination of voluntary application ends the employer’s obligations for the future. Employees can no longer claim the benefit of the collective provisions as from the effective date of the termination. However, rights arising before the termination remain vested: wages due, accrued leave, and compensation calculated on the basis of the terminated agreement for the prior period.

It is important to note that the termination of voluntary application does not follow the regime for the termination of a collective agreement within the meaning of Article L.2261-9 of the French Labour Code. There is therefore no 15-month survival period (3 months’ notice + 12 months), no obligation to negotiate a substitution agreement, and no guarantee of remuneration within the meaning of Article L.2261-13. This distinction is fundamental and constitutes an advantage for the employer who wishes to reverse its commitment.

Precautions for the employer

Before committing

Before voluntarily applying a collective agreement, the employer must assess all the consequences of its choice:

• Assess the overall cost: minimum wages, contractual bonuses, increased severance pay, mandatory supplementary benefits scheme, additional leave
• Check compatibility with any agreement already applicable to avoid a costly overlap
• Draft precisely the contractual clause or the commitment memo to delimit exactly the scope of application
• Anticipate the possibility of termination by avoiding irreversible contractual commitments

During application

The employer must ensure that it effectively applies all the provisions to which it has committed. Partial or intermittent application exposes the company to back-payments of wages and benefits over three years (three-year limitation period under Article L.3245-1 of the French Labour Code), and even to damages for bad-faith performance of the employment contract.

The employer must also monitor developments in the voluntarily applied agreement: amendments, revisions and new contractual provisions are binding on it to the same extent as the initial provisions.

In the event of termination

Termination must be prepared rigorously: assembling a supporting file, scrupulously complying with the information procedure, granting a reasonable notice period and, where possible, opening negotiations with employee representatives to accompany the transition.

Litigation risks

Disputes relating to voluntary application are frequent and primarily concern:

• The reclassification of partial application as full application
• Non-compliance with the procedure for terminating a custom
• The calculation of back-payments of wages and contractual benefits
• The determination of the agreement actually applicable in the event of a conflict

In litigation, the burden of proof falls differently depending on the situation: it is for the employee to prove the existence of the employer’s voluntary commitment, but it is for the employer to demonstrate that it duly terminated that commitment.

Awards can be significant: back-payments of wages over three years, damages, and even the nullity of the dismissal if the termination of a contractual benefit led to an unfair dismissal.

FAQ — Voluntary application of a collective bargaining agreement

Does mentioning a collective agreement on the payslip bind the employer?

Yes. The established case law of the Cour de cassation holds that mentioning a collective agreement on the payslip creates a presumption of voluntary application. The employer is then required to apply the provisions of that agreement, unless it proves that it was a clerical error, which remains very difficult in practice.

May the employer apply only certain provisions of an agreement?

In principle, voluntary application entails the application of all the contractual provisions. However, if the employer’s commitment is expressly limited to certain provisions (through a precise contractual clause or a targeted unilateral commitment), the courts may allow partial application. The wording of the commitment is therefore decisive.

How can voluntary application of a collective agreement be ended?

If application results from a custom or a unilateral commitment, the employer may terminate it by informing employee representatives and each employee individually, while observing a sufficient notice period. If application results from a contractual clause, the consent of each employee is required.

What is the difference between terminating a custom and terminating a collective agreement?

Terminating a custom (voluntary application) follows the simple case-law procedure: informing employee representatives, individually informing employees, and a notice period. Terminating a collective agreement in the strict sense follows the statutory regime of Articles L.2261-9 et seq. of the French Labour Code, with 3 months’ notice, a 12-month survival period and an obligation to negotiate a substitution agreement.

Does voluntary application create a vested individual benefit?

Not in the strict sense. The concept of a vested individual benefit (avantage individuel acquis) — now replaced by the guarantee of remuneration since the 2016 Labour Act (loi Travail) — applies only to the termination of a collective agreement in the statutory sense. The termination of a custom of voluntary application ends the benefit for the future, without any maintenance under the heading of vested individual benefits.