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17/ Jun

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Labour law

Time Savings Account (compte épargne-temps): towards a general framework for employees (draft law no. 262)


The principle of the compte épargne-temps ("CET") (Time Savings Account) is to enable employees to accumulate paid leave entitlements, or to receive remuneration, in return for periods of leave or rest not taken, or overtime worked.

Law no. 1.505 of 24 June 2021 on the concerted organisation of working hours introduced the CET into Monegasque law, as a form of compensation that can be granted to employees whose working hours are organised over a reference period of more than one week (compensation in the form of time off credited to the CET).

Parliamentary draft law no. 262 on the compte épargne-temps, submitted to the Parliament (Conseil National) on 12 June 2024, aims to extend the use of the CET to all employees in the private sector.

This extension is motivated by the lack of interest in the CET among Monegasque employers and employees due to the conditions under which it is implemented. The proposed law takes a "more flexible and comprehensive approach, so as to provide a legal framework that is better suited to the needs of social players". (Explanatory memorandum, p. 2)

The Explanatory Memorandum to draft law no. 262 draws on the numerous reforms to the French CET since it was introduced by Law no. 94-640 of 25 July 1994 (articles L3151-1 to L3153-2 of the French Labour Code, giving a legal basis to practices agreed by professional branches or company agreements) to "make its conditions of use more flexible". These reforms "confirm the growing interest in the CET and, consequently, the need in Monaco to extend the possibility of benefiting from a CET to all employees, given the benefits that all players in the private sector will be able to derive from it".

The CET is seen as a "significant competitive advantage that enhances the attractiveness" of companies, which "helps to increase their productivity and overall competitiveness by fostering employee loyalty, improving motivation and reducing absenteeism, while at the same time encouraging the recruitment of talent and new workers in search of a work-life balance".

The Parliament is also in favour of extending the CET to the public sector (introduced in France in 2002), inviting "the Government to initiate discussions with a view to extending this system to the entire civil service, as part of an effort to modernise and optimise work, and to make employment conditions attractive". (Explanatory memorandum, p. 4)

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Aims of proposed law no. 262

  • Modernising and optimising work, with the aim of making employment conditions attractive;
  • To take account of the growing concern about work-life balance, which companies are seeking to address in order to be attractive while remaining competitive on the labour market;
  • To create a CET system which, while adapting the management of employees' time to their personal needs, preserves the employer's prerogatives of governance to ensure the smooth running of the business.

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Content of draft law no. 262

¤ Definition (article 1)

Draft law no. 262 defines the CET as "a system that enables employees to accumulate paid leave entitlements or to receive immediate or deferred remuneration in return for periods of leave or rest not taken, or hours of rest acquired in the form of overtime or sums allocated to them".

¤ Establishment and general functioning of the CET (articles 2, 3 and 4)

— The CET would be instituted by:

  • a collective labour agreement ("convention collective de travail") as defined in article 1 of Law no. 416 of 7 June 1945 as amended,
  • or, failing that, a decision by the employer, after having obtained, where appropriate, the opinion of the trade union representatives ("délégués syndicaux") or staff representatives ("délégués du personnel") under the conditions and within the timeframe laid down by Sovereign Order. It is envisaged that the condition will be deemed to have been fulfilled even if no response is received from the delegates within a reasonable period of time. The Explanatory Memorandum specifies that "the absence of a response is understood to mean the absence of any collective stipulation relating to the applicable CET, in particular in the event of the failure of negotiations within the company".

The collective agreement or the employer's decision should lay down the following general terms and conditions for the operation of the CET:

  • the conditions and limits for adding time or money to the CET, at the employee's initiative;
  • the conditions and limits for adding time or money to the CET, with the exception of hours worked in excess of the legal working week or hours considered as equivalent, at the initiative of the employer;
  • the terms and conditions for managing the CET;
  • the conditions for using the CET;
  • the conditions for liquidating the CET during the term of the employment contract;
  • the fate of rights acquired by the employee under the CET in the event of termination of the collective labour agreement or the employer's decision.

The employee could deposit rights and withdraw the rights accumulated on his CET according to the terms defined by the collective agreement or the employer's decision. For example, employees may, at their request and in agreement with their employer, use the rights allocated to the CET to top up their pay, or to gradually stop working until they retire.

¤ Protection of employees' rights (articles 5, 6 and 7)

In order to protect employees' right to rest, limits are placed on the freedom of employers, social partners and staff representatives to specify the conditions for using the CET: annual leave may only be allocated to the CET for the period exceeding 24 working days.

The proposed system also guarantees the rights of employees registered in the CET in the event of the employer's bankruptcy by transposing the salary guarantee mechanism in force in Monaco to the CET:

  • The rights acquired within the framework of the CET would be guaranteed by the competent salary claims guarantee body, in accordance with the conditions and ceilings laid down by ministerial order.
  • The collective bargaining agreement or the employer's decision could also provide for insurance or guarantee of the rights acquired for the amount exceeding these ceilings, by a company previously authorised by ministerial order to guarantee these sums.
  • Where the employer does not belong to any wage guarantee body, the collective labour agreement or the employer's decision should provide for an insurance or guarantee scheme for the rights acquired, by a company previously authorised by ministerial order to guarantee these sums.
  • In the absence of an insurance or guarantee scheme for acquired rights provided for by the collective labour agreement or the employer's decision, acquired rights that are not guaranteed will be liquidated without delay.

In the event of termination of the employment contract, the employee would benefit from an indemnity corresponding to the rights registered (monetary conversion) on the CET. In agreement with their employer, employees would have the option of receiving this compensation all at once, or in instalments over a maximum period of 1 year after the termination of their employment contract.

In the absence of a provision in the collective agreement or the employer's decision stipulating how the day is to be valued, the value of the day would be assessed on the date of payment.

¤ Limited exemption from social security contributions (articles 9 and 11)

The draft law is based on the French system, while ensuring a fair balance: the remuneration due in return for rights built up by an employee on his or her CET would be exempt from social security contributions payable by the employee and the employer, up to a ceiling of 10 days per year.

A transitional provision stipulates that this exemption will only apply to rights deposited on the CET as of the the day after the law comes into force.

¤ Procedures for approval of the collective agreement or the employer's decision by the Director of Labour ("Directeur du travail")(article 10)

The employer would have to submit the collective agreement or his decision by registered letter to the Director of Labour, who would rule within 2 months on its conformity with the legal provisions.

The collective agreement or the employer's decision would be applicable when the Director of Labour had explicitly declared its conformity with the law or when he failed to respond within the time limit set.

In all cases, the Labour Director's decision should be substantiated in accordance with the conditions set out in Law no. 1.312 of 29 June 2006 on the motivation of administrative acts.

A standard form ("formulaire type") intended to present the general operating procedures of the CET envisaged by the employer would be made available to any interested party by the Director of Labour.

Any change to the general operating procedures should be submitted in advance in accordance with the above provisions.

¤ Harmonisation of legal systems (article 10)

The first paragraph of article 8-7 of Ordinance-Law no. 677 of 2 December 1959, created by Law no. 1.505 of 24 June 2021 on the organisation of working time for employees, would be amended to bring it into line with the arrangements set out in the draft law.

This amendment would have no impact on the conditions for implementing the organisation of working time.

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