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Decision no. 2013-672 DC of 13 JUNE 2013

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Law on the protection of employment

In the conditions provided for by Article 61-2 of the Constitution, the Constitutional Council was seized of an application relating to the Law on the protection of employment on 15 May 2013 by Mr Christian JACOB, Mr Élie ABOUD, Mr Bernard ACCOYER, Mr Yves ALBARELLO, Mr Patrick BALKANY, Mr Xavier BERTRAND, Mr Xavier BRETON, Mr Philippe BRIAND, Mr Yves CENSI, Mr Alain CHRÉTIEN, Mr Dino CINIERI, Mr Philippe COCHET, Mr François CORNUT-GENTILLE, Mr Jean-Michel COUVE, Ms Marie-Christine DALLOZ, Mr Bernard DEFLESSELLES, Mr Rémi DELATTE, Mr Nicolas DHUICQ, Mr Jean-Pierre DOOR, Mr David DOUILLET, Ms Marianne DUBOIS, Ms Virginie DUBY-MULLER, Mr François FILLON, Mr Yves FROMION, Mr Claude de GANAY, Mr Sauveur GANDOLFI-SCHEIT, Ms Annie GENEVARD, Mr Guy GEOFFROY, Mr Bernard GÉRARD, Mr Alain GEST, Mr Claude GOASGUEN, Ms Arlette GROSSKOST, Mr Christophe GUILLOTEAU, Mr Michel HERBILLON, Mr Antoine HERTH, Mr Patrick HETZEL, Mr Philippe HOUILLON, Mr Sébastien HUYGHE, Mr Christian KERT, Ms Valérie LACROUTE, Mr Jacques LAMBLIN, Ms Laure de LA RAUDIÈRE, Ms Isabelle LE CALLENNEC, Mr Dominique LE MÈNER, Mr Pierre LEQUILLER, Mr Philippe LE RAY, Ms Geneviève LEVY, Mr Alain MARTY, Mr Jean-Claude MATHIS, Mr Philippe MEUNIER, Mr Pierre MOREL-A-L'HUISSIER, Mr Jean-Luc MOUDENC, Ms Valérie PÉCRESSE, Mr Bernard PERRUT, Mr Jean-Frédéric POISSON, Ms Bérangère POLETTI, Ms Josette PONS, Mr Didier QUENTIN, Mr Arnaud ROBINET, Mr Martial SADDIER, Mr François SCELLIER, Mr Fernand SIRÉ, Mr Thierry SOLÈRE, Mr Claude STURNI, Mr Jean-Charles TAUGOURDEAU, Mr Guy TEISSIER, Mr Dominique TIAN, Ms Catherine VAUTRIN, Mr Philippe VITEL and Mr Michel VOISIN, Members of Parliament;

And on the same day by Mr Jean-Claude GAUDIN, Mr Pierre ANDRÉ, Mr Gérard BAILLY, Mr Philippe BAS, Mr Christophe BÉCHU, Mr Michel BÉCOT, Mr Pierre BORDIER, Mr Joël BOURDIN, Ms Marie-Thérèse BRUGUIÈRE, Mr François-Noël BUFFET, Mr François CALVET, Mr Christian CAMBON, Mr Jean-Noël CARDOUX, Mr Jean-Claude CARLE, Ms Caroline CAYEUX, Mr Pierre CHARON, Mr Alain CHATILLON, Mr Jean-Pierre CHAUVEAU, Mr Gérard CORNU, Mr Jean-Patrick COURTOIS, Mr Philippe DALLIER, Mr Serge DASSAULT, Ms Isabelle DEBRÉ, Mr Francis DELATTRE, Mr Robert del PICCHIA, Mr Gérard DÉRIOT, Ms Catherine DEROCHE, Ms Marie-Hélène DES ESGAULX, Mr Éric DOLIGÉ, Mr Philippe DOMINATI, Mr Michel DOUBLET, Mr Alain DUFAUT, Mr André DULAIT, Mr Ambroise DUPONT, Mr Louis DUVERNOIS, Mr André FERRAND, Mr Bernard FOURNIER, Mr Jean-Paul FOURNIER, Mr Christophe-André FRASSA, Mr Yann GAILLARD, Mr René GARREC, Mr Jacques GAUTIER, Mr Patrice GÉLARD, Ms Colette GIUDICELLI, Mr Alain GOURNAC, Mr François GROSDIDIER, Mr Charles GUENÉ, Mr Michel HOUEL, Mr Alain HOUPERT, Mr Jean-François HUMBERT, Mr Jean-Jacques HYEST, Ms Sophie JOISSAINS, Mr Roger KAROUTCHI, Ms Fabienne KELLER, Mr Marc LAMÉNIE, Mr Gérard LARCHER, Mr Robert LAUFOAULU, Mr Daniel LAURENT, Mr Jean-René LECERF, Mr Antoine LEFÈVRE, Mr Jacques LEGENDRE, Mr Dominique de LEGGE, Mr Jean-Pierre LELEUX, Mr Jean-Claude LENOIR, Mr Gérard LONGUET, Mr Roland du LUART, Mr Pierre MARTIN, Ms Hélène MASSON-MARET, Ms Colette MÉLOT, Mr Alain MILON, Mr Albéric de MONTGOLFIER, Mr Philippe NACHBAR, Mr Louis NÈGRE, Mr Philippe PAUL, Mr Jackie PIERRE, Mr François PILLET, Mr Louis PINTON, Mr Rémy POINTEREAU, Mr Christian PONCELET, Mr Hugues PORTELLI, Ms Sophie PRIMAS, Ms Catherine PROCACCIA, Mr Jean-Pierre RAFFARIN, Mr Henri de RAINCOURT, Mr Bruno RETAILLEAU, Mr Charles REVET, Mr René-Paul SAVARY, Mr Michel SAVIN, Mr Bruno SIDO, Mr André TRILLARD, Ms Catherine TROENDLE, Mr François TRUCY and Mr Jean-Pierre VIAL, Senators.

THE CONSTITUTIONAL COUNCIL,

Having regard to the Constitution;

Having regard to Ordinance no. 58-1067 of 7 November 1958 as amended, concerning the basic law on the Constitutional Council;

Having regard to the Labour Code;

Having regard to the Social Security Code;

Having regard to the Insurance Code;

Having regard to the Mutual Insurance Code;

Having regard to the observations of the Government, registered on 6 June 2013;

Having heard the Rapporteur;

1. Considering that the applicant Members of Parliament and Senators have referred to the Constitutional Council the Law on the protection of employment; that they dispute the constitutionality of certain provisions of Article 1 thereof along with Article L. 912-1 of the Social Security Code, which is supplemented by the provisions of Article 1; that the applicant Members of Parliament also call into question certain provisions of Articles 12 and 15 thereof;

– ARTICLE 1 OF THE LAW REFERRED AND ARTICLE L. 912-1 OF THE SOCIAL SECURITY CODE:

2. 2. Considering that the contested provisions of Article 1 of the law referred provide for the general application of complementary collective health cover for all employees; that the first subparagraph of letter A of paragraph I of this Article provides that: "Organisations linked by a sectoral agreement, or in the absence thereof by professional agreements, shall initiate negotiations on sectoral or company level prior to 1 June 2013 with a view to enabling the employees who do not benefit from mandatory collective cover providing for the complementary reimbursement of expenses incurred by illness, maternity or an accident, under which each class of guarantees and the employer's contribution are at least as favourable as those of the minimum cover referred to under paragraph II of Article L. 911-7 of the Social Security Code, to access such cover prior to 1 January 2016"; that the seven following subparagraphs of letter A specify the scope of the negotiations; that in particular, according to indent 2 of letter A, appearing in the fourth subparagraph of Article 1, the negotiations shall relate in particular to "insurer selection criteria" and shall examine "the conditions, including in particular the tariff rates, under which companies may retain the insurers of their choice, without prejudice to the effective cover of all employees of sectoral companies and to universal access to healthcare";

3. Considering that subparagraph 2 of paragraph II of Article 1 has the objective of supplementing Article L. 912-1 of the Social Security Code by a subparagraph which is worded as follows: "If the professional or interprofessional agreements referred to in Article L. 911-1 provide for a pooling of risks pursuant to the first subparagraph of this Article or if they recommend to companies on a non-binding basis that they subscribe with one or more bodies with regard to risks for which they organise cover, they shall issue a call for bids from the bodies referred to under Article 1 of Law no. 89-1009 of 31 December 1989 in order to reinforce the guarantees provided to individuals insured against certain risks. This tender process shall be implemented under conditions of transparency, impartiality and equal treatment between candidates and according to procedures laid down by decree. The decree in question shall stipulate in particular the rules intended to guarantee sufficient prior publicity, to prevent conflicts of interest and to specify contract monitoring arrangements. The tender procedure shall be repeated upon each review";

4. Considering that, according to the applicants, in allowing on the one hand a sectoral agreement to designate a social insurance body for a general class of sectoral companies, whilst on the other hand allowing this designation to be imposed on sectoral companies which already benefit from complementary healthcare, the provisions of Article L. 912-1 of the Social Security Code, which is supplemented by subparagraph 2 of paragraph II of Article 1 of the Law referred, violate the principle of freedom of contract resulting from Article 4 of the 1789 Declaration of the Rights of Man and the Citizen; that they argue that, insofar as they impose new limits on the principle of free competition between different social insurance bodies, the provisions of subparagraph 2 of paragraph II of Article 1 run contrary to the principles of freedom of enterprise and equality before the law; that the Senators also call into question, on all of the above grounds, the provisions of subparagraph 2 of letter A of paragraph I of Article 1; that the Members of the National Assembly also assert that the provisions of Article L. 912-1 of the Social Security Code violate the provisions of the eighth recital of the Preamble to the 1946 Constitution on the grounds that the right of workers to determine their employment conditions on a collective basis must be exercised within the company and not on the level of the professional sector;

5. Considering that pursuant to Article 34 of the Constitution: "The law shall determine the fundamental principles... of civil and commercial obligations"; considering that the legislature is at liberty at any time, when ruling on the matters within its jurisdiction, to amend earlier legislation or to repeal and replace it, as the case may be, with other provisions; that, when doing so, it may not encroach upon the legal guarantees of constitutional requirements;

6. Considering that on the one hand, the legislator is at liberty to subject the principles of freedom of enterprise and freedom of contract as resulting from Article 4 of the 1789 Declaration to restrictions related to constitutional requirements or justified by the general interest, provided that it does not result in breaches which are disproportionate having regard to the objective pursued; that on the other hand, any encroachment by the legislator upon lawfully concluded agreements that is not justified by a sufficient reason of general interest will violate the requirements resulting from Articles 4 and 16 of the 1789 Declaration;

7. Considering in the first place that the provisions of letter A of paragraph I of Article 1 have the objective of requiring professional sectors to initiate negotiations prior to 1 June 2013 with a view to guaranteeing cover to employees "for the complementary reimbursement of expenses incurred by illness, maternity or an accident"; that the complementary health cover thereby provided for is "collective" and "mandatory"; that it must take effect prior to 1 January 2016; that such negotiations will relate in particular to the content and level of guarantees, the allocation of contribution costs between employers and employees and "the insurer selection criteria"; that they will examine in particular the conditions, in particular in relation to tariffs, under which companies may retain the body or bodies which they have chosen "without prejudice to the effective cover of all employees of sectoral companies and to universal access to healthcare"; that insofar as they are limited to providing for the initiation of negotiations relating to "the arrangements for selecting the insurer" and the conditions under which companies may retain the social insurance body or bodies which they have chosen, these provisions do not violate any principle or rule of constitutional standing;

8. Considering that the constitutionality of a law which has already been promulgated may be assessed during a review of legislative provisions which amend or supplement or affect its scope; that the contested provisions from subparagraph 2 of paragraph II of Article 1 of the Law referred supplement those of Article L. 912-1 of the Social Security Code;

9. Considering that pursuant to the first subparagraph of Article L. 912-1, where professional or interprofessional agreements provide for a "pooling of risks" in respect of which they organise cover with one or more social insurance bodies "of which they are members, then the companies will mandatorily fall within the scope of these agreements, which shall contain a clause specifying under which conditions and at which intervals the arrangements for the organisation of risk pooling may be reviewed. Intervals between reviews may not exceed five years"; that, according to the second subparagraph of the same Article, if the agreements referred to above "apply to a company which, prior to the effective date, subscribed to or signed an agreement with a body other than those provided for under the agreements in order to guarantee the same risks at an equivalent level", the provisions of the higher level agreement shall prevail, in accordance with the provisions of Article L. 2253-2 of the Labour Code;

10. Considering that, according to the provisions of Article L. 912-1 of the Social Security Code, the legislator intended to facilitate access to complementary protection by all companies from the same sector and to ensure a risk pooling regime by deferring the task of organising cover for these risks with one or more social insurance bodies according to professional and interprofessional agreements; that it accordingly pursued a goal of general interest;

11. Considering however that, on the one hand, according to the provisions of the first subparagraph of Article L. 912-1 of the Social Security Code, all companies belonging to a single professional sector may be required to bear responsibility not only for the price and arrangements for complementary protection, but also the choice of the social insurance body entrusted with the provision of such protection amongst all companies regulated by the Insurance Code, the institutions falling under Title III of Book IX of the Social Security Code and the mutual insurance bodies falling under the Mutual Insurance Code; that, whilst the legislator may encroach upon the principles of freedom of enterprise and freedom of contract as part of a risk-pooling approach, in particular by providing that one single social insurance body be recommended on sectoral level which proposes a reference contract including a specific insurance tariff or by granting the possibility for several social insurance bodies proposing at least those reference contracts to be designated on sectoral level, it cannot violate these freedoms in such a manner that the company will be bound to a contracting party which has already been designated under a contract negotiated on sectoral level and the contents of which have been entirely predetermined; that accordingly, the provisions of subparagraph one violate the principles of freedom of contract and freedom of enterprise;

12. Considering that, on the other hand, the provisions of the second subparagraph of Article L. 912-1 enable provision to be made that, following the entry into force of a sectoral agreement, the companies from that sector will be required to contract with the social insurance body designated under the agreement, even if they have previously concluded a contract with a different body; that, for the same reasons as those set out in recital 11, and without any requirement to examine the objecting alleging a violation of lawfully concluded agreements, these provisions also violate the principles of freedom of contract and freedom of enterprise;

13. Considering that according to the above, the provisions of Article L. 912-1 of the Social Security Code violate the principles of freedom of enterprise and freedom of contract in a manner which is disproportionate having regard to the objective pursued of a pooling of risks; that, without any requirement to examine the other objections raised against subparagraph 2 of paragraph II of Article 1 of the Law referred, these provisions, along with those contained in Article L. 912-1 of the Social Security Code, must be ruled unconstitutional;

14. Considering that the ruling that Article L. 912-1 of the Social Security Code is unconstitutional shall take effect on the date of publication of this decision; that it shall not apply however to agreements concluded on this basis, which have come into force prior to publication, between companies and bodies regulated by the Insurance Code, institutions falling under Title III of the Social Security Code and mutual insurance bodies falling under the Mutual Insurance Code;

– ARTICLE 12:

15. Considering that Article 12 concerns the regulation of the use of part-time work; that in particular, on the one hand, paragraph I supplements Chapter I of Title IV of Book II of Part II of the Labour Code, dedicated to mandatory sectoral and professional negotiations, with a section 5 entitled "Part-time work" and which includes Article L. 2241-13; that according to the first subparagraph of that Article: "Organisations which are bound by a sectoral agreement or, in the absence thereof, by professional agreements, shall engage in negotiations relating to the arrangements for the organisation of part-time work if at least one third of workers within the professional sector is employed on a part-time basis"; that on the other hand, paragraph IV of Article 12 introduces an Article L. 3123-14-1 into the Code, according to which: "The minimum duration of part-time salaried employment shall be set at twenty four hours per week or, as the case may be, the monthly equivalent of such a period or the equivalent duration calculated over the period provided for under a collective agreement concluded under Article L. 3122-2"; that Articles L. 3123-14-2 to L. 3123-14-5 lay down the conditions under which exceptions may be granted to this minimum duration;

16. Considering that, according to the applicant Members of Parliament, the obligation to negotiate within the professional sectors which make significant use of part-time labour and the setting of a minimum duration of part-time work at 24 hours violates lawfully concluded agreements;

17. Considering that the obligation to negotiate the arrangements applicable to the organisation of part-time work, which grants the right of all workers to participate through appointed delegates in the collective determination of working conditions, does not in itself cause any violation to lawfully concluded agreements; that the right to maintain lawfully concluded agreements does not prevent the legislator from setting the minimum duration of part-time work;

18. Considering that Articles 2241-13 and 3123-14 of the Labour Code, which do not violate any other requirement of constitutional law, must be ruled constitutional;

– ARTICLE 15:

19. Considering that Article 15 inserts a new sub-section entitled "Internal mobility" including Articles L. 2242-21 to L. 2242-23 into Section 3 of Chapter II of Title IV of Book II of the Labour Code; that it encourages the negotiation and conclusion of agreements to promote internal mobility within companies and groups of companies; that according to the fourth subparagraph of Article L. 2242-23: "If one or more employees refuse to apply the terms of the agreement on internal mobility referred to under the first subparagraph of Article L. 2242-21 to their contract of employment, they may be dismissed on economic grounds, which may be carried out according to the procedures applicable to individual dismissals on economic grounds and shall grant entitlement to the job transition and requalification measures which must be provided for under such agreements, which shall adapt the scope of and arrangements for the carrying out of internal requalification provided for under Articles L. 1233-4 and L. 1233-4-1";

20. Considering that, according to the applicant Members of Parliament, in classifying the dismissal of an employee who refuses the application of the terms of the agreement on internal mobility to his contract of employment as a dismissal on economic grounds, these provisions violate the principle of freedom of enterprise;

21. Considering however that the legislator was at liberty to to determine the rules applicable to the dismissal of employees who refuse to accept the application of the terms of an internal mobility agreement; that in subjecting such dismissals to the rules applicable to individual dismissal on economic grounds, it did not violate any requirement of constitutional law; that accordingly, the fourth subparagraph of Article L. 2242-23 of the Labour Code must be ruled constitutional;

22. 22. Considering that there are no grounds to raise any question of compatibility with the Constitution ex officio,

HELD:

Article 1. – Subparagraph 2 of paragraph II of Article 1 of the Law on the protection of employment is unconstitutional.

Article 2. – The following provisions of the same Law are constitutional:

– in Article 1, subparagraph 2 of letter A of paragraph I;

– in Article 12, Articles L. 2241-13 and L. 3123-14-1 of the Labour Code;

– in Article 15, the fourth subparagraph of Article L. 2242 of the Labour Code;

Article 3. Article L. 912-1 of the Social Security Code is unconstitutional.

Article 4 The declaration of unconstitutionality of Article 3 shall take effect on the date of publication of this decision under the terms set down in recital 14.

Article 5. This decision shall be published in the Journal Officiel of the French Republic.

Deliberated by the Constitutional Council in its session of 13 June 2013, sat on by: Mr Jean-Louis DEBRÉ, President, Mr Jacques BARROT, Ms Claire BAZY MALAURIE, Ms Nicole BELLOUBET, Mr Guy CANIVET, Mr Michel CHARASSE, Mr Renaud DENOIX de SAINT MARC, Mr Valéry GISCARD d'ESTAING, Mr Hubert HAENEL and Ms Nicole MAESTRACCI.