FRANCE Trends and Developments Contributed by: Laetitia Tombarello and Audrey Demourgues, Bredin Prat
on the means for obtaining and verifying sustainability information. Companies subject to the new works council’s consultation obligation The companies concerned are those required to include sustainability information in their management report, namely: • large companies (ie, companies that exceed at least two of the following thresholds at the end of the financial year: balance sheet total ( total de bilan ) of EUR25 million, net turnover of EUR50 mil - lion, and an average of 250 employees); • small and medium-sized companies (ie, companies that exceed at least two of the following thresholds at the end of the financial year: balance sheet total ( total de bilan ) of EUR7.5 million, net turnover of EUR15 million, and an average of 50 employees) whose securities are listed on a regulated market; • parent companies of large groups (ie, groups exceeding, on a consolidated basis, at least two of the following thresholds at the end of the financial year: balance sheet total ( total de bilan ) of EUR30 million, net turnover of EUR60 million, and an aver - age of 250 employees); and • companies exempted from including sustainability information in their management report because they are already accounted for in the sustainability information included in the report of a controlling company or another consolidating company. The phased implementation of the works council con - sultation requirement was recently adjusted by the DDADUE Act, which postponed its application by two years for certain companies. This aligns with the EU Commission’s “Omnibus I” proposal and the adop - tion of the “Stop-the-Clock” Directive in April 2025. These developments reflect a growing trend to reduce regulatory burdens in order to support European busi - nesses facing a challenging global environment, and follows increasing concerns among French and EU policymakers regarding the competitiveness of Euro - pean companies – particularly in light of the war in Ukraine, rising energy prices, and shifting global trade dynamics.
The amended regulations now provide that CSRD obligations, including the requirements for works council consultation, have been/will be applicable to the following entities: • since 1 January 2025 large companies or par - ent companies of a large group with an average of more than 500 employees (at company level or consolidated group level) and whose securities are listed on a regulated market, or meet certain characteristics of credit institutions, or insurance/ reinsurance companies, or healthcare institutions; • from 1 January 2028 – all other large companies or parent companies of large groups; and • from 1 January 2029 small and medium-sized companies listed on a regulated market, as well as subsidiaries or branches of non-European compa - nies exceeding certain thresholds. Content and modalities of the new consultation According to the new regulations as amended by the DDADUE Act, works councils must be consulted dur - ing at least one of the three recurring annual works council consultations, namely: • the consultation on the company’s strategic orien - tations; • the consultation on the company’s economic and financial situation; and/or • the consultation on the company’s social policies, working conditions, and employment. By reference to Articles R. 232-8-4 (for large compa - nies and parent companies of large groups) and R. 22-10-29 (for small and medium companies listed on a regulated market, for which the content is simplified) of the French Commercial Code on the sustainability information to be included in management reports, the French Labour Code provides that the works coun - cil’s consultation must cover information enabling the employee representatives to understand the impact of the company’s activities on sustainability issues, as well as the effect of these issues on the company’s business, results, and situation. The consultation must also address the means for obtaining and verifying this information.
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