France

When the company becomes insolvent or faces financial difficulties, a receiver is called by a judge for helping the manager to put the situation right or to sell all or a part of the firm or else, to liquidate the assets of the company.

If the firm is in financial difficulties but can still run:

Then, the receiver will assist the manager to manage the firm and redress the financial situation, which can lead to collective bargaining. In that case, the receiver must be authorized by the judge (commercial Court) to do so after he has justified that the measure is necessary and the procedure has regularly be followed.

The collective bargaining procedure is a “classical” one. The manager, with the help of the receiver, has exactly the same obligations of consulting the elected representatives ; informing and notifying the minutes of the meetings to the administration authority. They also must elaborate together with the elected representatives a “plan for the safeguard of the company”….

If necessary, the firm can be sold, even partially.

In that case, for the employees, the consequences are the same as in case of a “classic” transfer of undertakings , out of insolvency procedure.

Then, the article L 122-12 of the labour code must be applied and the transfer of the company mustn’t affect individual employment contracts.

But of course, it does not prevent the new employer from the necessity to change the terms of the employment contract and/or to bargain a new collective agreement.

The financial health of the company can also be so bad that there is no other solution but to liquidate its assets.

In that case, the receiver can dismiss all the employees (within a collective bargaining). No prior commercial court authorization is necessary.

Whatever the situation:

Salaries’ debts are guarantied and insured by a legal association called AGS (Association for employees’ debt).

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