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13 February 2015

Obligation to provide prior information to the employees of SMEs in the event of the sale of a company or on-going concern: there are more questions and discussions than answers …

In France, the law of 31 July 2014 relating to the social and solidarity economy (the “ESS law” or the “Hamon law”, from the name of its author) introduced an obligation to provide prior information to the employees in the context of certain proposed transfers of companies or on-going concerns.

Originally, the aim was to avoid having to close a company following the departure of its director, which was a commendable intention considering that every year, 8,000 companies with less than 100 employees have to close down in the absence of any successor.

However, it must be observed that the legal results are very far from the original intentions. Although we have very relative distance regarding this law, the purpose of this flash is to describe as pragmatically as possible its main impacts, including in terms of timing, and to address the issues which are still pending, as the “accompanying information guide” (guide d’accompagnement) published by the Direction Générale des Entreprises of Bercy, and the “Q&A” available on the Internet, which are devoid of any legal force, raise more issues than they provide answers.

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