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Economic Simplification Act: Changes affecting employment

Published on : 30/07/2026 30 July Jul 07 2026
Newsletter / New legislation
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The Economic Simplification law of 26 May 2026 aims at making it easier to run businesses by amending the Labor Code and the Commercial Code on several subjects that have an impact on employment.

Sale of a company
Under French law, employees of small and medium-sized enterprises must be informed in the event of a project to sell either the business (Commercial Code, Art. L.141-23 and L.141-28), or a share representing more than 50 % of the stock (Commercial Code Art. L.23-10-1 and L.23-10-7) allowing them to make an offer to acquire the business themselves.

For companies with at least 50 employees that have a Workers’ Council (Comité social et économique), the law has abolished the requirement to directly inform employees of the intended sale. Only the obligation to inform and consult the Council remains, subject to the general legal provisions set out in Articles L.2312-8 and seq. of the French Labor Code.

For companies with less than 50 employees, the period for providing prior information to employees is reduced from two months to one month.

This law has also reduced the maximum amount of the civil fine incurred for failure to comply with the information obligation from 2% to 0.5% of the selling price of the company. (Commercial Code, Art. L.141-23 and L.23-10-1, amended).

Internal regulations
Prior to the Simplification Act of May 2026, the enforceability of internal regulations (Règlement intérieur) was subject to the fulfilment of certain formalities, including the submission of the regulations to the secretary of the industrial tribunal (Conseil des prud’hommes).

This requirement is no longer a condition for the internal regulations to enter into force and be enforceable towards employees (Labor Code, Art. L.1321-4, amended).

Submission is still required, but this does not prevent the internal regulations from coming into force provided that the other legal requirements have been met. The other formalities remain unchanged, namely the information of the Workers’ Council, where one exists, the submission of the regulations to the labor inspector, and their display within the company.

Entry into force
The new rules on the sale of businesses apply to sales concluded on or after 26 July 2026. The removal of the requirement to submit the internal rules to the industrial tribunal has been in force since 28 May 2026.

 
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