If you make a mistake in your hiring plans, you cant correct it.
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For the 100 employees we have in France, we have 10 employee representatives, for whom we have to organize weekly meetings even when there is nothing to discuss, Haan says. Every time a social security contribution changes, which is frequently, we have to update software and send our HR people for training. We cant fire anyone without exorbitant costs.
The code sets hurdles for any company that seeks to shed jobs when its turning a profit. It also grants judges the authority to reverse staff cuts years after theyre initiated if companies don't follow the rules. The courts even deem some violations of the code a criminal offense that could send executives to jail.
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Software maker Viveo Group, an arm of Geneva-based Temenos Group, began the required talks with the workers council in February 2010 because it wanted to cut about a third of its 180-member staff, according to court records. Viveo offered employees a voluntary departure plan in June of that year as the council dragged its feet on evaluating the earlier proposal, court records show. The workers council then went to court to block the cuts. It won a ruling against the original plan in January 2011 on the grounds that Viveo was forecasting an 18 percent increase in sales, meaning its future didnt depend on the layoffs. Frances highest appeals court is reviewing the decision and is expected to rule on May 3. What holds back hiring in France is the lack of clarity on how to legally cut jobs, says Déborah David, a labor lawyer at Jeantet Associés in Paris who has followed the case. If the decision is upheld, Viveo will have to take back the workers and hand over two and a half years in back pay, she says.
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