Following its referral by 60 members of Parliament, the French Constitutional Court recognize nearly all of the Bill of ratification of the “Ordonnances Macron”, including that on the implementation of the new “CSE”.
The text, adopted on February 6 & 14, 2018 by the French National Assembly, followed by the Senate, will remain almost unchanged on the day of its promulgation.
Ordonnance n°2017-1386 dated September 22, 2017 on “the new organization of social and economic dialogue within the Company” merges the three current employee representative bodies – the Employee Delegates, the Works Council and the Committee on Hygiene, Safety and Working Conditions (referred to as “Délégués du Personnel”, “Comité d’Entreprise” and “CHSCT” in French ) – into a single body named: Social and Economic Council (“CSE”).
Establishing a CSE is compulsory for all companies with at least 11 employees. Its duties vary depending on the number of employees, as was foreseen up until now for companies with the Employee Delegates or Works Council.
The CSE must therefore progressively replace the former bodies representing the personnel (IRP), in such a way that they will have completely disappeared by January 1, 2020.
In practice, the CSE must be established at the end of the term of the former IRP, when one of the abovementioned institutions is being renewed and at the latest by December 31, 2019.
For this purpose, the Ordonnance organizes the possibility of extending or shortening the terms underway, so that the end of the term coincides with the date the CSE is established.
Take note: the rules for possibly extending or shortening the term underway depend, firstly, on the date the pre-electoral agreement protocol was signed and, secondly, on the date the current term expires.
When the term of the former IRP reaches its expiry date:
– in 2018: the length of the term may be shortened or extended for at most 1 year;
– in 2019: the length of the term underway may also be shortened
(addition by the Bill of ratification adopted in the Senate on February 14, 2018).
The Constitutional Court censured solely one provision, on the CSE. The employer shall not be exempt anymore from organizing partial elections in case of annulment of election of the CSE members on lists that fail to fulfil the obligation of a balanced representation of men and women (Decision n° 2018-761 DC dated March 21 2018).
The Bill of Ratification should be promulgated in the French Journal Officiel shortly.
According to Article 155, IV of the French Tax Code, LMP status is granted to taxpayers:
– Whose annual income, derived from said activity by the members of their tax household, is over € 23,000 and exceeds their tax household’s professional revenues; and
– Whose tax household has one member registered in the Trade Register as a professional landlord.
As a relieving measure, the French tax authorities granted LMP status to individuals who were not registered in the Trade Register simply due to the Register’s refusal based on the non-commercial nature of the activity, so long as those individuals could provide proof of the reason for said refusal.
In ruling n°2017-689 QPC dated February 8, 2018, the Constitutional Council overturned the obligation for registration in the Trade Register, considering that the aforementioned obligation ignored the principle of equality of public burdens.
As such, only the conditions pertaining to income derived from the activity as a furnished rental property landlord remain necessary for qualifying the activity as professional in nature, or not.