"French labor law has a reputation for filling international entrepreneurs with trepidation"

LEADERS LEAGUE: What makes you different from other German law firms, from an organizational perspective?

Emil Epp: We are the only law firm that has German and French lawyers in its midst, all of whom have earned degrees in France and Germany and work exclusively in the cross-border field. We therefore work in German law for French clients and in French law for German-speaking clients. Our offices in Strasbourg, Paris, Baden-Baden, Sarreguemines, Bordeaux  and Zurich allow us to be close to our clients.

What are your objectives for 2023 as regards the ecosystem of companies you advise?

E.E.: Our clients need legal and tax advice, of course, but that is not enough. We need to provide accounting services, social management, contacts with banks, personnel search services and, if necessary, domiciliation.

In order to meet the needs of our French clients, we founded a pair of companies, one entitled Vis-à-vis and another called EPP Expertise Comptable Steuerberatung, both located in the beautiful city of Baden-Baden, Germany. German-speaking clients can find comprehensive solutions to all their needs in France through the services provided by Euro-Droit and the network Frankreich für Unternehmen.

In 2023, we will strengthen our team in Baden-Baden in order to meet the growing demand from French clients wishing to enter the German market.

You are a founding partner of Cross Border Business Lawyers (CBBL), a global network of German-speaking business lawyers. Tell us a bit about it.

E.E.: In 2022 we received a lot of new applications from lawyers who wanted to join our network of lawyers, which encompasses more than 60 countries. Our selection process will result in one law firm in three new countries joining in the near future.

From 2023 onwards, CBBL will relaunch our website, which will feature details of  accountants, banks, insurance providers and staffing companies for each of the 63 countries in our network.  We are convinced that this project, in which we have invested a great deal of time and effort in 2022, meets the needs of the market. 

What are the current challenges in cross-border or bi-national employment law?

Priscille Lecoanet: Our first challenge is to reassure our clients about French labor law, which has a reputation for filling international entrepreneurs with trepidation. For example, when a client contacts us because they are considering terminating an employment contract, they tend to think it will be a complicated, protracted process. Although it’s true that certain steps must be respected, redundancy under French labor law can, subject to the condition that these steps are followed, be easily implemented. Unlike German law, the risk in French law in the event of a dismissal without real and serious cause, is not the reinstatement of the employee but the obligation for the employer to pay the employee damages. Moreover, since the Macron ordinances of 2017, the monetary amount of these damages is prescribed by law according to the employee’s seniority.

That said, it cannot be denied that French labor law is complex in certain respects. It must therefore be rendered accessible to our clients. The particularity of our clients is that they often have only German labor law as a reference point. If we are to advise our clients properly, we need to know the basics of German labor law in order to understand how they will likely apply national law. Once we know where they are coming from, we can explain  how they should approach French law.

Finally, our other challenge is to propose concrete solutions to our clients. Not being familiar with the French labor law culture and practices, our clients rely on us to offer them concrete solutions.

For French and German companies, what were the most significant labor law issues in the past twelve months, and the major advances?

P.L.: There have not really been any major changes to French labor law in 2022. The recent changes mainly occurred in 2017, shortly after President Macron was elected. In his first months in office, Macron significantly reformed French labor law. In 2022, the reforms of 2017 are still in force.  

One of the major advances of 2017 was regulating the amount of damages to be paid to the employee when a judge considers that a dismissal is without real and serious cause.

Prior to this reform, the law provided for minimum, though not maximum, amounts. It was up to the Prud'hommes Council and Court of Appeal to set the amount of damages to be awarded, which would, in some cases, be very high. Since 2017, an employer now knows in advance the maximum amount in damages they will have to pay to a former employee if a judge were to consider that the dismissal was unfair.

Another major advance that dates back to 2016, namely the scope for collective bargaining within companies. A company can thus define its own rules which can derogate from the law or the collective agreement applicable to it. Since 2017, it’s been possible for small companies to conclude company agreements. However, in practice this possibility is not used enough by small companies, which have been slow to adopt a culture of collective bargaining.

Do you see the world of work evolving differently on each side of the Rhine?

P.L.: The various successive confinements have changed the way people work. Whereas teleworking used to be the exception, it has become a fully-fledged way of working, which is generally very much appreciated by employees in both countries. There is also a shift in the balance of power in the French labor market. As employers find it difficult to find suitable candidates to fill certain roles, it is often the latter who impose their conditions. Flexibility is at the heart of their concerns. This trend, if it continues, will require French labor law to adapt in order to accomodate this desire for flexibility.

Tell us a bit about EPP’s new Zurich office?

E.E.: EPP Rechtsanwälte Avocats’ new branch office in Zurich opened January 2023 further strengthening the firm via dynamic employment, tax and real estate law teams, practice areas which were very active firmwide in 2022.

Interview with EPP Rechstanwälte Avocats:

Emil Epp, Founder, and Priscille Lecoanet, Labor law lawyer