France: Agreement regulates temporary "portage" work

An innovative agreement signed in France in June 2010 provides, for the first time, a regulatory framework for the growing practice of "portage salarial". This a work arrangement whereby skilled professionals provide temporary freelance and consultancy services to companies through a special firm, which formally acts as their employer.

On this page:
"Portage salarial"
Legal status 
Contractual relationships
Workers concerned 
Role of portage firms 
Client companies
Ported workers' remuneration 
Working time
Other terms and conditions
Implementation
Reactions.

"Portage salarial"

"Portage salarial" is a practice whereby a worker provides specialist services to a client company, on a temporary basis, via a special "portage" firm (société de portage). The workers involved are essentially freelancers or consultants, but are not paid directly by the client. Instead, the "ported" workers have a form of employment relationship with the portage firm, which bills the client company for their services. The portage firm pays the worker, after deducting a commission (usually 5% to 10%), and handles administrative and social security matters. Portage salarial has been described as midway between dependent paid employment and self-employment. The workers involved maintain their independence but do not need to undergo the formalities of setting themselves up as self-employed or deal with social security.

Portage salarial differs from temporary agency work in that the ported workers themselves are responsible for finding clients and negotiating the price for their services and the terms of the work. They have considerable autonomy and are not regarded as being employees when working in the client company.

Portage first emerged in the 1980s but remained a fairly obscure practice until the 2000s, since when it has grown rapidly. While there is no official data on the matter, experts estimate that portage was used for the equivalent of between 20,000 and 30,000 full-time jobs in 2009, with more than 50,000 people involved. The main portage firms predict a major expansion of their activity over the coming decade.

The workers concerned are generally professionals in areas such as IT, journalism, communications, training, translating, marketing, sales or business consultancy.

Legal status

Portage salarial developed without a specific legislative framework and legal uncertainty surrounded certain aspects of its operation, especially whether or not the portage relationship conformed with the law on employment contracts. The Cour de cassation, France's highest court, issued several rulings, most recently in early 2010, emphasising the need to provide legal security and certainty for the workers involved.

As a step in this direction, a national cross-industry agreement on "labour market modernisation" reached by trade unions and employers' organisations in January 2008 included a definition of portage. The definition was enshrined in law in June 2008. This states that portage salarial is the set of contractual relationships among a portage firm, the worker concerned and client companies. The worker must be considered as an employee of the portage firm and receive remuneration for being put at the disposal of a client company by the portage firm.

The 2008 agreement and law provided that details of the portage relationship should be regulated by a sectoral collective agreement negotiated by the social partners in the temporary agency work industry. Talks over such an accord began soon afterwards between the main trade union confederations and PRISME, which represents 600 temporary-work agencies and other firms providing employment services. During the negotiations, PRISME consulted the main organisations representing portage firms.

After nearly two years of talks, an agreement was reached on 24 June 2010, signed by PRISME and four out of five union confederations - CFDT, CFE-CGC, CFTC and CGT signed, with FO abstaining.

Contractual relationships

According to the agreement, a portage relationship starts with the worker concerned making contact with a client company, or vice versa, and agreeing to provide specialist services to that company. The worker and client negotiate directly the price for the services, and the conditions under which they are to be provided. A portage firm of the worker's choice then signs a service-provision contract with the client company. This sets out the details of the "ported" worker's expertise, the foreseen duration of the work, and the price, as previously agreed between the worker and the client. The client company pays the agreed price to the portage firm.

The worker and the portage firm conclude a specific fixed-term "portage salarial employment contract", usually to perform a "precise and temporary task" for a defined or undefined period of up to 18 months (any renewals included). If the worker starts a new task for the same client, he or she must sign a new contract with the portage firm, but the "waiting period" that, by law, [Article:98434#3.10 "must normally elapse between fixed-term contracts with the same employer"] does not apply. Ported workers may have more than one fixed-term contract at the same time, as long as their overall working time does not exceed legislative or collectively agreed maximum limits.

Where the work for the client company is predicted to last for more than 18 months, a different type of [Article:98434#3.10 "fixed-term contract to achieve a "defined objective""] must be signed, which may last up to three years. This must set out clearly the objective or task concerned and its foreseen duration.

In cases where the worker provides services to a number of clients simultaneously and/or successively over a long period, he or she may sign an open-ended contract with the portage firm, which is updated for each new assignment. The worker must make active efforts to find new clients.

Workers concerned

Portage salarial must always be undertaken at the initiative of the worker, and not the client. In order to engage in portage, a person must have the level of expertise and qualifications necessary to allow them autonomy in negotiating terms with a client company and in performing the tasks concerned. Only workers with the status of a "cadre" may participate. This term, usually defined in collective agreements, essentially means an employee occupying a professional or managerial position and exercising important responsibilities, based on a high level of education, training or experience.

Ported workers, the agreement states, must provide the services agreed with the client, under the agreed conditions. They must give the portage firm the information necessary for the firm to sign a service-provision contract with the client company, and to prepare a payslip relating to the assignment. The worker must provide a progress report at least once a month, and inform the portage firm of any developments that might affect the continuity of the assignment.

Role of portage firms

Only companies that are solely dedicated to the activity may act as portage firms. If temporary-work agencies want to operate in the field, they must set up a specific subsidiary. Portage firms must post a financial guarantee, to cover the payment of remuneration and social contributions in the event of bankruptcy.

The role of a portage firm is to:

• sign an employment contract with the worker concerned, and undertake the administrative and social security formalities involved;
• ensure the smooth running of the worker's assignment;
• manage the administrative aspects of the relationship between the worker and the client company; and
• bill the client for the sum agreed between that company and the worker, and pay the worker.

The agreement stresses that portage firms do not "own" the clientele found by the workers with which they have employment contracts.

Client companies

Client companies may use ported workers only to perform occasional tasks falling outside their normal, ongoing activity, or one-off tasks requiring expertise that they do not possess.

The client company negotiates the price and terms of the services to be provided by the worker and signs a service-provision with the portage firm chosen by the worker. It is up to the client company to satisfy itself that the worker has the relevant skills, qualifications and aptitude to perform the tasks concerned. The client company must provide the appropriate conditions to allow the worker to provide the agreed services.

The client must pay the portage firm the agreed sum at the agreed intervals, and inform the firm of any developments that might affect the continuity of the assignment.

Portage workers' remuneration

From the amount paid by the client to the portage firm under the service-provision contract, the portage firm retains a management fee and deducts social security and related contributions. The worker receives the remainder.

All ported workers must receive gross monthly remuneration of at least €2,900 per month for full-time work. The future adjustment of this minimum amount will be dealt with in a forthcoming sectoral collective agreement for portage firms. In addition, workers are entitled to a supplement of 5% to cover preparation time. In the case of employment on a fixed-term contract, the ported worker is entitled at the expiry of the contract to an "end-of-contract bonus" of 10% of total gross remuneration during the term of the contract (this bonus is a [Article:98434#3.10 "statutory requirement that applies to all fixed-term contracts"]).

Ported workers must be provided with a "statement of account" at least once a month, detailing all sums received from client companies and all deductions made by the portage firm.

Working time

Ported workers are free to organise their working time as they choose in order to perform the agreed tasks, but should inform the client and the portage firm of their hours. The overall duration of working time must be laid down in the employment contract. This takes the form of an "inclusive" working time agreement (convention de forfait), a statutory arrangement that assumes that a certain amount of overtime is worked each year, calculated in hours or days, and that these extra hours are remunerated automatically as part of the employee's salary.

The maximum working time for ported workers is set at 173 hours per month, 1,827 hours per year or 218 days per year, depending on the nature of the agreement.

Other terms and conditions

The agreement states that the nature of ported workers' activities makes it complex to organise their supplementary pension and welfare provision and to apply their statutory rights to vocational training. This is because they, for example, move frequently between assignments and workplaces, and often alternate periods of work and periods of time off. To address this situation, the agreement's signatories will conduct an exercise comparing the relevant provisions of the existing sectoral collective agreement for temporary-work agencies with current practice in portage firms. The aim is to identify and implement the arrangements that provide the best guarantees for ported workers.

The health and safety of ported workers is the responsibility of the client company while a worker is on the company's premises.

Implementation

The agreement on portage salarial has been forwarded to the Ministry of Labour, which will prepare legislation to give it legal force, whereupon the agreement will take effect.

Portage firms set up since 25 June 2008 (the date on which legislation defining portage came into force) will be covered immediately by the agreement's provisions once it takes effect. Those firms established before this date will have a two-year transitional period, during which to harmonise their practices with the agreement's terms. Notably, they will still be able to employ workers without "cadre" status during this period. However, the agreement sets a minimum basic remuneration level for these workers, of €1,700 per month in the first year of the transitional period and €1,800 in the second.

Reactions

PRISME welcomed the "particularly innovative" agreement, and the fact that it fills the "legal void" that had previously characterised portage salarial. It said that the "experiment" of asking the social partners in one sector to negotiate an agreement with cross-industry effect had been a success. According to PRISME, the accord gives ported workers a secure status while fully legitimising the activities of portage firms. Portage is a new and growing form of employment and, now that it has been regulated by the agreement, it may offer many people opportunities for work.

The main organisations representing portage firms had been consulted by PRISME during the negotiations. However, a number of firms had expressed disquiet at the process and what they saw as the possibility of temporary work agencies "muscling in" on the portage market. Once the agreement was signed, SNEPS, which represents 18 portage firms, stated that it was satisfied with the outcome, which reinforces the legality of portage and makes its operation more secure. For SNEPS, a key point is that the agreement accepts that portage should be carried out solely by specialist firms. SNEPS also said that many of the agreement's provisions are in line with existing practice in its member firms.

The CGT union confederation said that it was opposed to aspects of portage salarial, which it believes can promote excessive workforce flexibility and competition among workers, but that it had signed the agreement in order to create a strict regulatory framework for the practice. The CGT is particularly pleased that the accord gives ported workers a clear status as employees, restricts portage to "cadres" and allows only dedicated portage firms to engage in the practice.

This article is based on material provided by Christophe Boulay, correspondent for France.