Employment law
The establishment-level agreement
Many Malian companies find themselves in the same position: the collective agreement governing their sector is dated, its pay scales and bonuses fit their reality poorly, and yet they cannot depart from it. The establishment-level agreement is the tool the Labour Code provides to break that deadlock, not by escaping the collective agreement, but by adapting it.
It is a collective agreement at the scale of a single company. It carries the same legal force, it binds those who signed it, and it then applies to the employment contracts concluded by the employer. Labour Code, Articles L.88 and L.77 (French).
1. How does it relate to the sector collective agreement?
| Collective agreement | Establishment agreement | |
|---|---|---|
| Scope | A branch, a sector, a territory | One company, or one or more specified establishments |
| Function | To set the floor applicable to all | To adapt that floor to the company's particular conditions |
| Who negotiates | Employers' organisations and sector unions | The employer, with staff delegates and the establishment's union representatives |
| Room for manoeuvre | Sets the minimum | May only go beyond it, never below |
The establishment agreement therefore does not replace the collective agreement: it layers on top of it. It is not used to escape a rule felt to be burdensome, but to address what the collective agreement does not cover, or covers poorly.
2. Who negotiates and who signs?
The agreement brings together, on one side, one or more employers, and on the other the staff delegates and the representatives of the most representative unions among the personnel actually employed in the establishment concerned.
Two points deserve attention:
- staff representation is not optional : without duly designated counterparts, no agreement is possible;
- it is the representatives of the personnel of the establishment who negotiate, not an outside body: this is what makes the agreement an instrument of proximity. Labour Code, Article L.88 (French).
3. What can it cover?
The Code expressly names performance-related pay, an area on which collective agreements are often silent:
- the award and calculation method of output-based pay;
- production bonuses, individual and collective;
- productivity bonuses;
- profit-sharing in the company's results.
To which may be added any new provisions more favourable to employees. The field is therefore broadly open, subject to one condition that governs everything else.
4. The golden rule: an agreement may only improve
This is the principle to retain above all others: an establishment agreement may neither reduce nor call into question any legal, regulatory or contractual advantage already acquired.
An agreement lowering a bonus set by the collective agreement, cutting leave or extending working hours beyond the legal framework would not be an agreement adapted to the company: it would be a derogation, and the Code does not permit it.
The Code goes further on pay: where the agreement organises output- or productivity-based remuneration, the resulting increase in the total wage bill must be at least equal to the applicable contractual increases. In other words, a bonus scheme cannot be used to sidestep a pay rise provided for by the collective agreement. Labour Code, Article L.88 (French).
5. What formalities make it effective?
A signed agreement is not yet an applicable agreement. Three requirements make it enforceable:
| Formality | What it requires | Sanction or effect |
|---|---|---|
| Drafting | The agreement is written in French | On pain of nullity |
| Filing | Filed with the registry of the competent labour court | Conditions its entry into force |
| Entry into force | From the day following the filing | Unless the agreement states otherwise |
The words "on pain of nullity" attached to drafting in French are not a stylistic flourish: an agreement failing that requirement produces no effect whatsoever, however good the negotiation was. Labour Code, Articles L.73 and L.74, applicable to agreements by reference in Article L.88 (French).
6. How long does it last?
An agreement may be concluded for a fixed or an indefinite duration.
- Fixed duration: it may not exceed five years. On expiry, it continues to produce effects as an indefinite-duration agreement: it does not lapse of its own accord, it changes regime.
- Indefinite duration: it runs until it is denounced.
In both cases, the agreement must itself provide in what forms and at what times it may be denounced, renewed or revised. This is a clause often left undrafted, and its absence makes any later exit considerably harder. Labour Code, Article L.72 (French).
7. What happens if the company changes hands?
The Code protects continuity. Where there is a change in the employer's legal situation, succession, sale, merger, incorporation, transformation of the business, all employment contracts in force on the day of the change subsist between the new operator and the personnel.
Employees therefore keep their contract, their seniority and the advantages attached to them. A buyer wishing to change the collective framework cannot do so unilaterally: it must open negotiations with the staff representatives, in the forms provided by the existing agreement. Labour Code, Article L.57 (French).
Key takeaways
The establishment agreement is the tool for a company that wants to adapt its collective framework without waiting for its sector agreement to be revised. It comes at a price: negotiation with the workforce, and a prohibition on going backwards.
| The rule | What it implies |
|---|---|
| It adapts the collective agreement, it does not replace it | It is used to supplement, not to derogate |
| It is negotiated with staff delegates and union representatives | Properly established staff representation is a prerequisite |
| It may only improve | No acquired advantage may be reduced |
| Written in French, on pain of nullity | A condition of validity, not of form |
| Filed with the labour court registry | It enters into force the day after filing |
| Five years maximum if concluded for a fixed term | Beyond that, it continues as an indefinite-duration agreement |
| Contracts survive a change of employer | The buyer negotiates, it does not decide alone |