How are time savings accounts set up?

Solely by means of a collective bargaining agreement or an inter-professional convention

A time-saving account can only be introduced within the framework of collective bargaining, either through a collective labour agreement or through an inter-professional agreement at national or sector level.

As regards cross-industry agreements at national or sector level, these must set a general framework allowing companies not covered by a company-specific collective labour agreement to introduce such a system, which must, however, emanate from a common agreement between the individual employer and the company’s staff delegation.

Ministerial approval of company agreements

In order to check that company-level agreements comply with the general framework laid down in the cross-industry agreement at national or sector level, they must be submitted to the minister responsible for labour for approval, following inclusion of the opinions of the signatory parties of the inter-professional framework agreement.

This approval is necessary, as the Employment Fund will get involved if necessary.

When was this introduced into the Labour Code?

A law dated 12 April 2019 introduced a time savings account (CET) for employees who have an employment contract governed by the Labour Code.

This law follows on from the government’s 2013 programme, which had announced that ‘the introduction of the time-saving account will allow greater flexibility in managing working time for both companies and employees, particularly with regard to continuing training and balancing work and family responsibilities’.

It is more of a framework law offering the social partners the ability to negotiate, since the introduction of a time-saving account can only be done through the negotiation of a collective or an inter-professional agreement.

In order to benefit from it, an employee must have at least two years’ seniority within the company. The CET can have a maximum of 1,800 hours.


How are contributions to a time savings account made?

To be able to contribute to the account, employees must have been with the company for two years and have submitted a written request.

No employee can be obliged to contribute to the time savings account against his will.

The individual time savings account is kept in hours.

The following hours can be put into a time savings account:

  • additional days of leave granted under a work organisation plan depending on the length of the reference period;
  • excess balances from the reference period or the flexitime system;
  • overtime worked at the employer’s request or with his permission one hour of overtime worked earns one and a half hours in the account;
  • compensatory rest is granted for work on Sundays;
  • compensatory leave for public holidays falling on a Sunday;
  • additional days of leave beyond the 26 statutory days insofar as they have not yet been taken in the current year;
  • a maximum of five days of paid recreation leave that could not be taken during the calendar year due to illness of the employee, maternity leave or parental leave, intended to be used after 31 March of the following year, which would otherwise be lost.

The maximum hourly balance of a time-saving account is set at 1,800 hours, i.e. 45 weeks at 40 hours or approximately one year’s worth of working days.

How does one use a time savings account?

Application similar to that for requesting leave

Employee can submit a written request. Employers can only refuse this if the needs of the service and substantiated wishes of other employees in the company do not challenge such a request.

Unless an exemption is agreed upon between the social partners, this leave must be set up at least one month in advance.

Full-time or part-time work

In order to make the use of the time-saving account more flexible, the law provides that the time-saving account can be used for paid leave for full or part-time employees. This means that employees can use it as leave for a certain prolonged period, or to take only a few days or half-days each week until it runs out.

Within the framework of this part-time use, employees must work a minimum of ten hours on average per week. The aim is to avoid weekly working hours that are so short that they could make work organisation in the company difficult or even impossible.

Sickness and extraordinary leave where used

In case of illness of employees during the period of use of their time-saving account, the days of illness will be added to their account upon presentation of a medical certificate within three days, if such employees are in the country. Employees who are abroad shall inform their employer as soon as possible.

The same applies if, during the use of the CET, an event occurs which triggers extraordinary leave (death of a relative, moving house, marriage, etc.).

How are employees protected?

Leave taken from a time savings account is considered working time. This period therefore also generates annual leave and will be counted against the length of service for determining rights to a supplementary pension scheme.

These employees are considered to be on paid leave and their employer is obliged to keep the employee’s job open, or a similar job corresponding to the employee’s qualifications and featuring the same salary.

How is a time savings account liquidated?

The liquidation of the time-saving account will take place via the payment of an indemnity in the following cases:

  • the dismissal of an employee by an employer;
  • resignation of an employee;
  • termination of the employment contract by mutual agreement;
  • cessation of business due to the death, physical incapacity or bankruptcy of the employer;
  • on the day on which the employee is awarded an old-age pension and at the latest at the age of 65, provided that he is entitled to an old-age pension;
  • on the day on which the employee is awarded a disability pension;
  • on the day that cash benefits for illness end;
  • on the day of notification of the decision on external reclassification;
  • on the day of withdrawal of a disabled person’s status as a disabled employee;
  • on the day of confirmation of the decision to reorientate a disabled employee towards the ordinary labour market;
  • in the event of the employee’s death, in which case a compensatory indemnification will be paid to beneficiaries.

The compensatory indemnification corresponds to the monetary conversion of all the rights the employee has acquired, multiplied by the hourly rate in force at the time of payment.

What are an employer’s obligations?

Employers must set up a system to ensure that time savings accounts are kept accurately and in detail. They must ensure that employees can consult the account individually at any time and that an employee can check that the funds are being used in accordance with his initial wishes by means of a monthly statement.

Employers must also make provision for the financial counterpart of an employees’ time savings accounts on the liabilities and assets sides of the balance sheet, plus employer’s charges, and adapt it to changes in the cost of living if necessary.

What guarantees are in place in case of employer bankruptcy?

Setting up a system of guarantees primarily addresses the need to protect the rights of employees in the event of bankruptcy or liquidation of a company.

The law aims to avoid that time savings accounts or sums set aside for hours accumulated in these accounts, which are due to employees, be considered as company assets that are swallowed up during bankruptcy proceedings and are consequently lost to employees.

Creation of a super-privilege

The law provides for an amendment to Article 2101 of the Civil Code.

Employee claims resulting from the liquidation of the time savings account are included in the privileges provided for by this article. Next, in case of bankruptcy or liquidation of the company, the claims resulting from the liquidation of the time savings account are also covered by this super-privilege.

Unlike wage claims, there is no ceiling. Claims arising from the liquidation of the time savings account are moved up in the hierarchy of super-privileges to a position ahead of claims for wages, salaries and allowances relating to the last 6 months of employment and claims by employees for compensation of any kind arising from the termination of employment or apprenticeship contracts.

This is in fact a super-super-privilege.

Guarantee of the Employment Fund

In addition, an amendment to Article L. 126-1 of the Labour Code provides that claims arising from a CET will henceforth be guaranteed by the Employment Fund up to a ceiling equal to twice the minimum social wage, in the event of bankruptcy, the opening of insolvency proceedings against the employer or the definitive closure of an employer’s business or establishment.

Accordingly, employees who have contributed to their time savings account and whose employer is in bankruptcy or liquidation proceedings may recover a maximum amount equal to twice the minimum social wage even if a total absence of assets precludes the super-privilege provided for in the new paragraph 2 of Article 2101 of the Civil Code.

What about current collective bargaining wage scales?

A transitional provision specifies that the rules established by a collective agreement before the entry into force of the law remain in force as long as the collective labour agreement providing for them is valid. It is only when a new agreement is negotiated that these provisions will have to be adapted to comply with the new law.

What is the task of the staff delegation with regard to the time savings account?

The task of the staff delegation has been enlarged in terms of information and consultation: from now on, it will also have the task of supervising the set up and the correct use of time savings accounts, where necessary.

What is the impact of a time-saving account on unemployment benefits?

For an employee in a period of use of acquired rights resulting from a time savings account, the amount of the full unemployment benefit is determined on the basis of the gross salary actually received during the three months preceding the period in question.

In terms of ancillary income that the unemployed person is obliged to declare to the National Employment Agency, the rights acquired under a time savings account can be added to full unemployment benefits.

What is the tax treatment of time savings accounts?

Monetary compensation for time accumulated in a time savings account provided for by a legal or regulatory provision, a collective agreement or any other collective labour contract is considered as income from an employed occupation.