Offering an open-ended contract to an employee at the end of a fixed-term contract: New formalities to be complied with

The law of December 21, 2022 (“Labor Market” law) introduced a new procedure for employers intending to offer an open-ended contract to an employee at the end of a fixed-term contract, as well as an obligation to inform France Travail (formerly Pôle Emploi), the aim of which is to limit the entitlement to unemployment benefits of an employee at the end of a fixed-term contract or temporary assignment who refuses an open-ended contract on several occasions.

To this end, the law of December 21, 2022 created two new articles in the Labor Code: article L. 1243-11-1 for fixed-term contracts and article L. 1251-33-1 of the Labor Code for temporary employment contracts.

Although in force since December 23, 2022, the law refers to a Conseil d’Etat decree the task of setting the terms of application of these two articles.

This decree was published on December 28, 2023. It has added two new articles to the French Labor Code, R. 1243-2 (CDD) and R. 1251-3-1 (contrat de mission), describing the procedure to be followed by employers or user companies offering a permanent contract to an employee, as well as how France Travail is to be informed in the event of refusal.

The new procedure applies to proposals for permanent contracts made by the employer or user company from January 1, 2024.

When the employer proposes that the contractual employment relationship be continued after the end of the fixed-term contract in the form of an open-ended contract, he must notify the employee of this proposal before the end of the fixed-term contract by registered letter, by hand-delivered letter against receipt, or by any other means giving certainty of receipt.

The job must have the following characteristics:

• A position identical or similar to the one held ;
• At least equivalent remuneration ;
• Equivalent working hours ;
• Identical classification ;
• An identical workplace.

The employer must allow the employee a reasonable period of time in which to decide whether or not to accept the offer of an open-ended contract, and must inform the employee that if he or she fails to respond within this period, the offer will be rejected.

In the event of an express or tacit refusal by the employee within the cooling-off period, the employer (or user company) has one month to inform France Travail of this refusal, by electronic means via a dedicated platform (www.demarches-simplifiees.fr/commencer/refus-de-cdi-informer-francetravail).

The information is accompanied by a description of the proposed job and the elements needed to justify the extent to which the proposed job is identical or similar to the one held; the proposed remuneration is at least equivalent; the proposed working hours are equivalent; the classification of the proposed job and the place of work are identical.

The information is also accompanied by details of the period of time given to the employee to decide on the offer of a permanent contract, and the date of the employee’s express refusal, or in the absence of a reply, the date of expiry of the above-mentioned period, after which the employee’s refusal is deemed to have been accepted.

If France Travail finds that the information provided is incomplete, it must send a request for additional information to the employer, who has fifteen days from the date of the request to respond.

On receipt of the complete information, France Travail must inform the employee of this receipt and of the consequences of refusal of the CDI on entitlement to the insurance allowance.

After the second refusal in the previous 12 months of an offer of an open-ended contract meeting all these conditions, the employee will not be entitled to unemployment insurance benefits.

As a result of this restriction on entitlement to unemployment benefits, employee unions (FO, CGT, FSU and Solidaires) have lodged a number of appeals with the Conseil d’Etat against the December 28, 2023 decree.