The technical unemployment system helps support a company in difficulty, while preserving jobs. - IStock / City Presse

The hard knocks are legion in terms of entrepreneurial activity. A whole bunch of events can indeed cause the temporary shutdown of a company or a factory, as is currently the case with the coronavirus crisis. To cope with this, employers can resort to partial unemployment, but not on any conditions.

Exceptional circumstances

This system, framed by law, concerns situations in which employees no longer have the material means to work but where they are still part of the company. Their employment contract is therefore only suspended and not broken. We commonly speak of technical unemployment.

To activate this mechanism, the cessation of activity must be motivated by “difficult economic conditions”, “supply difficulties”, “an exceptional disaster or bad weather”, “transformation, restructuring or modernization of the company ”, or more broadly by“ any other exceptional circumstance ”. Ideally, the weekly hours may have been reduced only. Otherwise, some services, or even the entire establishment, may have been temporarily closed.

It is for example possible when a fire ravages a factory, that professional offices undergo a flood or that the raw material necessary for the manufacture cannot be imported any more because of a war or, why not, of a global epidemic. At a time when the coronavirus is endangering the national economy, the government has announced that the mechanism of technical unemployment will not only be possible for businesses that have been shut down, but that it will also be reinforced.

Guaranteed compensation

Since employees can no longer work, they therefore do not receive their pay. To compensate for this financial loss, the legal system provides for the payment of compensation up to 70% of gross hourly pay per hour worked and up to 100% of net hourly wages if the company takes advantage of this unused time to offer its staff to carry out training. It is even a legal obligation if it has already used partial activity during the previous three years.

But in practice, it is all the same for the employer to pay this compensation, even when he no longer has any cash inflows. This is why the State reimburses him for the partial activity allowance. The latter is however limited to a ceiling set at 8.04 euros per hour worked per employee, ie the minimum wage. The rest is the responsibility of the company. In the exceptional framework of the coronavirus, the government has announced the capping of the partial activity allowance, so that it is the State which assumes all of the costs of compensation to employees.

In addition, insofar as this device aims to alleviate a temporary problem, its duration of use is logically limited in time: compensation can reach 1,000 hours maximum per calendar year and per employee. But if the cessation of activity is due to modernization works, the duration is only 100 hours per year per employee. Beyond that, either the company resumes its normal activity, or it must consider redundancy. Note: this forced inactivity has no impact on social rights since it is assimilated to a period of work.

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Strict procedure

The use of partial unemployment must follow a strict procedure, under penalty of sanction.

First of all, consultation with employee representatives: the employer must consult, for an opinion, the social and economic committee (the CSE), setting out the reasons for using the system, the activities concerned and the commitments made.

Then, administrative authorization: it must then obtain the approval of the Regional Directorate for Business, Competition, Consumption, Labor and Employment (Direccte). In the event of a disaster or bad weather, its request for partial activity authorization must also be sent within 30 days. The CSE's prior opinion must be attached. In the absence of a response within 15 days, the authorization is considered to have been granted for 6 months renewable.

As part of the coronavirus, procedural flexibility is planned to speed up the implementation of the device.

  • Legislation
  • Employment
  • Labor Code
  • Unemployment