Monaco: Reform Of The Organization Of Working Time: Revolution Or Evolution ?

The concerted organization of working time, management and social dialogue tools.

New law on the organization of working hours in Monaco: Revolution or Evolution?

Adapting the legal and normative framework to the needs of the business is a common expectation of companies, in need of flexibility, especially in the context of the health crisis and tense economic climate.

Collective bargaining is one of the management tools that can be used to modulate operating conditions and meet the respective expectations of the company and its employees. Used in various fields, collective bargaining has been particularly developed in the neighbouring country regarding the working time.

Monegasque law is not developed in this area, so that the provisions on working time and rest periods are still not flexible.

To such an extent that the law n°1505 of June 24, 2021 on the concerted organization of working time undeniably characterizes a step forward, in that it authorizes the implementation of a multi-weekly organization of working time. It remains to be seen to what extent this step forward really takes the Principality into the future.

A revolution ...

This text constitutes a major reform of Monegasque law in several respects.

First of all, it offers Monegasque companies the possibility to organize working hours over a reference period, longer than a week (up to a year), by category of employees, thus establishing a double level of flexibility:

• As for working time: it is possible to adopt a multi-weekly approach and to vary the working time from one week to another so that the organization of working time is in line with the activity. In this way, overtime can be assessed at the end of the reference period and not at the end of each week.
• As for the categories of employees, a company may adopt as many time organizations as it has types of populations.

In addition, this reform introduces the time savings account (TSA), an instrument that already exists in neighboring jurisdictions such as Luxembourg, France, or Germany for example. In these countries, this system generally allows employees to accumulate paid leave entitlements or to receive remuneration (immediate or deferred) in return for periods of leave or rest not taken, or for the sums they have allocated to them. In principle, it offers greater flexibility in the management of working time for both companies and employees, limiting any impact of temporary crises and improving the work-life balance.

... economical or costly ?

Although the introduction of the concerted organization of working time constitutes a genuine reform, this statement should nevertheless be qualified since this tool is limited due to its cost.

Thus, understood as a derogatory agreement, the collective agreement on the concerted organization of working time must provide for any hour worked over 39 hours per week or the duration considered equivalent or the contractual duration, in addition to the payment, if any, of overtime, one of the following financial compensations:

• A 10% increase in salary;
• A 10% recovery time to be credited to a time savings account, it being specified that this time will have to be settled at the end of the reference period or on the day of the termination of the employment contract or of the company agreement or of the collective agreement. It should be noted that this time is considered as overtime.

In fact, if, in the context of a multi-weekly organization of working hours, the hours worked over 39 hours do not constitute overtime from a legal point of view, they will be overtime from a financial point of view, since they will entitle the employee to additional pay or additional rest.

Therefore, new cost constraints arise where it could be considered that the spirit of the original project was to offer companies a legal tool to face times of crisis by allowing them to reduce the use of external flexibility measures (downsizing and outsourcing) by resorting to new internal flexibility measures (modulation, TSA).

The organization of working time in Monaco will not therefore be a tool available to all economic players or to meet all contingencies.

Objective : an evolution of social dialogue

Thanks to this reform, it is above all the social dialogue that is undergoing a major democratic evolution.

Two alternative modes of collective bargaining are introduced in the company, namely those :

• with the staff delegates at company level, whose mission defined by the law has been enlarged; the prerogative and primacy of the trade unions on social dialogue has thus been discarded
• with an employee representative specially appointed for this purpose in the absence of a staff representative; the voice of the first actors of the company is thus preserved.

Social dialogue and democratic logic are thus given pride of place, since the collective agreement will have to be approved by a simple majority of the employees concerned by the agreement within 14 days of its signature, in addition to the express authorization of the Director of Labor, necessary condition for the agreement to come into force.

This reform constitutes a major evolution of the dialogue processes by conferring to the employees and to their representatives a faculty of concerted adoption with the employer of standards adapted to their respective needs and constraints.

The powers thus conferred are such that the relationship between the collective agreement and the employment contract is substantially modified: the organization of working time set by mutual agreement is binding on each full-time employee (excluding part-time employees) concerned, without this constituting a change in the employment contract.

In other words, intra-company collective bargaining takes precedence on the subject of the organization of working time, not only over sectoral union bargaining, but also over the individual contractual logic.

How to use it

As it stands, this tool can be useful for adapting the organization of working time to an activity that is not homogeneous due to its seasonal nature, fluctuating orders, and/or for limiting the direct and knock-on effects of activity reductions. In systemic or exceptional periods of low activity, a temporary reduction in working hours could be envisaged, which would then be offset by a probable increase in working hours during a period of high activity.

To do so, it is nevertheless necessary to master the collective negotiation process as well as the multi-weekly organization of working hours, avoiding the pitfalls, errors and risks.

CMS Monaco's employment team supports Monegasque employers in their questions concerning collective and individual relations and is familiar with the specific local legal and case law requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.