A contrat nouvelle embauche (abbreviated CNE), known as a new employment contract, new recruitment contract or new-job contract in English is a French employment contract proposed by Prime Minister Dominique de Villepin (UMP) which came into force by ordinance on August 2, 2010. The measure was enacted by the prime minister after he was authorized by Parliament to take legislative measures to stimulate employment. Unlike the later First Employment Contract (CPE) which was repealed in 2010 (soon after its enactment), after protests the CNE has been used as a job contract despite opposition from trade unions.
Background
The CNE was created by the French government as part of its June 2005 Emergency Employment Plan to fight France's high unemployment. The plan aimed to create jobs by giving flexibility to small businesses, since many employers blame their inability to hire on rigid French labour laws. One of the most frequent claims by employers and the employers' union (MEDEF) has been inflexibility regarding layoffs.
Clauses
Small companies
The CNE applies only to new permanent employees, of any age, in firms with no more than 20 employees.
First-two-years contract-termination clause
The contract allows employers to fire at will during the first two years of employment, after which legal justification is required. The flexibility clause was a major break with the protective conditions usually applying to long-term job contracts in France. Under the usual long-term job contract, an employer needs to justify the firing of an employee. If an employer terminates the contract during its first two years, they must provide advance notice of two weeks to one month. An employee may terminate the contract with no advance notice during its first two years. After the first two years the contract is identical to the existing long-term contract, with protective measures for the employee. The CNE also limits to 12 months the period during which an employee can contest their firing before labor-law courts; in ordinary contracts, the period is 30 years.
Burden of proof in litigation
Under normal long-term labour contracts, an employer bears the burden of proof as the defendant; if the plaintiff is the fired employee, the employer must justify the firing. This is known as the reversal of burden of proof, and is based on the legal justification provided to fire the employee.
This 1973 law was enacted under Pierre Messmer's prime ministry during Valéry Giscard d'Estaing's presidency. Pierre Mesmer had succeeded Jacques Chaban-Delmas, who after May 1968 had a "new society project" aiming to modernize France. This included social measures, although Giscard d'Estaing and the ministers supported economic liberalism.
Although at first the CNE said that "no motive" had to be given during the first two years, a Conseil d'Etat ruling in October 2005 imposed such a motive in litigation. If a plaintiff (employee) alleges they have been fired due to discrimination based on religion, political opinion, physical disability, age or sexual orientation, the Conseil d'Etat ruled to reverse the burden of proof to the employer's side.
For other claims, the burden of proof remains on the employee side. Avoiding the risk of court procedures is a key issue behind the CNE. With the similar CPE contract discussions, opponents (unions and opposition leaders) have supported the reversal of burden of proof to the employer in all employment cases.
Support
Improvement through flexibility
According to Prime Minister Dominique de Villepin, easier firing would make small companies less reluctant to hire new employees. This idea is not new; employers and economists have been asking for more flexibility, and consider that globalization makes protective labour law unaffordable. "The issue of flexibility must be addressed, and quickly", said the leader of CGPME (France's association of SMEs) and Laurence Parisot, leader of MEDEF (France's major employers' union). MEDEF and CGPME expected the government to push for stronger reforms.
The two-year period gives flexibility to small companies, who will be able to hire without the probation-period deadline of long-term contracts. The "no justification" clause is a key issue, since "employers often also argue that the tribunal is heavily prejudiced in favour of the employee". The CNE is in line with International Monetary Fund (IMF) advice to "introduce flexibility in the French labour market", and the IMF called CNEs a "first step" towards reform. After the First Employment Contract was discontinued, a survey showed that 57 percent of small employers feared that the CNE might also be scrapped.