FRANCE LAW AND PRACTICE Contributed by: Michael Doumet, François-Xavier Naime, Guillaume Nataf, Léna Sersiron, Eléonore d’Anthonay, Nella Picou, Pauline Celeyron and Magalie Dansac Le Clerc, Baker McKenzie Paris
Collective Bargaining Agreements After completion of the transaction, the transferred employees’ collective agreements continue to apply to the transferred employees until they are replaced by a substitution agreement or – in the absence of a substitution agreement – for a maximum transitional period of 15 months. A substitution agreement may therefore need to be negotiated with trade union del - egates (if any) or the works council. 11. Intellectual Property and Data Protection 11.1 Intellectual Property Considerations for Approval of FDI Please refer to 7.2 Criteria for National Security Review for further details. The FDI authorities assess the sensitivity of the French target activities on a multi- criteria analysis basis. The nature and scope of the R&D operations performed in France and the IP cre - ated as a result thereof are scrutinised when such IP can be deemed critical for French national interests – notably, in the defence or high-tech sectors. 11.2 Intellectual Property Protections Strong IP Protections in France France is renowned for its robust IP protection sys - tem and its reputation as a copyright-friendly coun - try. The legal framework offers strong safeguards for registered IP rights, such as trade marks, patents and designs (protected by French and EU titles), as well as unregistered rights such as copyrights (which cannot be registered in France) and trade secrets. This frame - work ensures that these rights are well protected, providing a secure environment for authors, creators and innovators. Additionally, the concepts of unfair competition and “passing off” serve as effective tools in France, allowing businesses to protect their brand identity and products from imitation. Protection Exclusions and Compulsory Licensing Although France offers comprehensive IP protections, there are certain exclusions. By way of example, ide - as, discoveries, scientific theories and mathematical methods are typically not eligible for IP protection. This is a common practice globally to ensure that fun - damental knowledge remains accessible.
Disparities between the acquiring and acquired com - panies may necessitate adjustments. Employers must compare salaries, bonuses and benefits, potentially leading to negotiations with employee representatives or the denunciation of company customs. Employers should carefully evaluate compensation structures and harmonisation strategies during acqui - sitions to mitigate disputes and ensure compliance. 10.3 Employment Protection Automatic Transfer of Employment Contracts Under Article L. 1224-1 of the French Labour Code, employment contracts are automatically transferred to the new employer when the transaction involves the transfer of an autonomous economic entity. This means that the transferred activity must retain its iden - tity and include the necessary and specific resourc - es for its operation, such as personnel, clients and equipment. Employees retain their contracts under the same terms, including salary, seniority and accrued benefits. Dismissal and Redundancy Rights If economic redundancies are planned following the transaction, affected employees are entitled to statutory or contractual dismissal indemnity, notice period and, where applicable, redeployment assis - tance. These rights depend on the company’s size, the employee’s seniority and the applicable collective bargaining agreements. Works Council Consultation Depending on the type of transaction and the size of the company, employers may be required to inform and consult with the works council before complet - ing the transaction. The consultation process must be completed – ie, the works council must have rendered its opinion – before any binding agreement is signed. Unless otherwise provided for in an in-house collec - tive bargaining agreement, the works council has one month to render its opinion (extended to two months if the works council engages the services of an expert). A negative opinion of the works council would not prevent the completion of the proposed transaction. Non-compliance with the consultation obligations can result in penalties or pause the transaction in the event of litigation.
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