Government refuses to endorse new version of unemployment insurance agreement
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During 2000, the French social partners have been attempting to negotiate an agreement to reform the jointly-managed UNEDIC unemployment insurance system. The government refused to endorse an agreement signed in June by employers' organisations and two trade union confederations (CFDT and CFTC) and asked the signatories to amend a number of provisions. A new agreement was concluded in September, to which a third union confederation (CFE-CGC) signed up. However, for the second time, the government refused to endorse the deal on the grounds that the amendments did not go far enough in addressing the criticisms leveled at the initial agreement. A third version is in preparation.
A draft agreement to replace the current agreement on the UNEDIC unemployment insurance system, due to expire on 30 June 2000, was signed on 14 June 2000 (FR0006171F). It provided for the overhaul of the entire unemployment benefit system, based on a new "employment action plan" (Plan d'aide au retour à l'emploi, PARE) scheme. The agreement was signed by all the employers' associations represented on the UNEDIC board - the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), the General Confederation of Small and Medium-sized Enterprises (Confédération générale des petites et moyennes entreprises, CGPME) and the Craftwork Employers' Association (Union professionnelle artisanale, UPA) - but by only two of the five representative trade union confederations, CFDT and CFTC. Faced with strong opposition from the other unions - CFE-CGC, CGT and CGT-FO- and unrest within the political parties in its parliamentary majority, the government decided not to approve the agreement (FR0008184N).
In September 2000, after reassuring unions and employers that the unemployment benefit system would remain jointly managed, the Minister for Employment and Solidarity, Martine Aubry, asked the signatories to the agreement to come up with an amended version addressing core issues such as funding arrangements, benefit-related sanctions and the financial relationship between the government and UNEDIC (FR0009190F). The signatories duly concluded a new version of the agreement on 23 September.
Amendments to initial agreement
The agreement submitted by the signatories on the 23 September was a significantly revised version of the initial deal. The main new points are as follows.
- Extension of benefit eligibility. Any unemployed person with four months' contributions over the previous 18-month period would be covered by the unemployment insurance scheme.
- Compulsory nature of the back-to-work employment plan. The PARE would remain compulsory, but would mainly target those unemployed people experiencing difficulties in finding a job on their own.
- More specific definition of"appropriate employment". The government and the non-signatory unions considered the terms "skills", "aptitude" and "qualifications" included in the initial agreement to define the appropriate work that unemployed people should accept to be too vague. They were thus replaced by the concepts of "validated qualifications and occupational capacity".
- Penalties for failing to observe job-search requirements. A new dual penalty system would be set in place. The first prong of this system would be based on statutory requirements (the Labour Code) and the second on collective bargaining through the implementation of the PARE.
- New funding arrangements and loan to the state. A cut in employer unemployment insurance contributions, initially planned for 1 January 2000, would be put back by six months. This would provide savings of FRF 16 billion, which UNEDIC would pay to the state to compensate for benefits paid to those unemployed people covered by the state-run unemployment assistance scheme.
These amendments to the initial agreement brought a third trade union on board. CFE-CGC, which, throughout the negotiations, was staunchly against the initial agreement, considered that the redrafted version addressed its concerns. This union had expressed concern over the compulsory nature of the back-to-work employment plan, saying that managerial and professional employees (represented by CFE-CGC) might end up being "demoted," since they would be forced to accept one of the jobs offered to them. The realignment of the PARE to target less readily-employable groups has offset these fears.
Despite CFE-CGC endorsement of the agreement, the government took the line that the amendments to the initial agreement were inadequate. As a result, it refused for a second time to ratify the agreement.
Government refuses to sign new agreement
The government stressed to the social partners that the unemployment benefit scheme is de facto, if not officially, a tripartite system, since most unemployed people are no longer covered by UNEDIC but receive unemployment assistance benefit from the state-run system or the "occupational integration minimum income" (revenu minimum d'insertion, RMI), also paid by the state (FR0007174N). In so doing, the government was attempting to justify its role in the current negotiations, saying that "while joint management is official policy, the government has always had a hand in the unemployment benefit system. (…) The major responsibility of endorsing agreements and of ensuring that they safeguard the rights of all the unemployed falls on the government."
There remain several stumbling blocks to gaining the government's stamp of approval:
- for the government, the agreement provides for excessively tough penalties and forces unemployed people to accept jobs that do not match their qualifications. The government takes issue with the provision that uses the threat of benefit disqualification to force those job-seekers who have been unemployed for six months to accept not only "work matching their experience and qualifications as provided for under the Labour Code", but also any employment corresponding to their occupational capacity;
- with regard to the monitoring and penalty powers afforded to UNEDIC by the agreement, the government believes that these issues should be governed by law. This would mean applying the principles of the Labour Code, whereby a person's efforts to find a job are to be monitored by Ministry for Employment officials; and
- in terms of funding arrangements, the government believes that it is impossible - as the agreement seeks to do - to fund improved benefits and better assistance to unemployed people, as provided for by the PARE scheme, at the same time as cutting employer contributions by an amount equal to the entire annual UNEDIC surplus. Sufficient funds are not available to match the objectives of the agreement's negotiators, it claims. It is for this reason that the government is keen to see the funding earmarked for the PARE scheme targeted more towards those with the greatest needs.
CGT-FO and the CGT, like the government, refused to sign up to this new agreement. CGT's decision is linked to inadequate improvements in benefit levels. CGT-FO acceptance of the agreement would require dropping the penalty principle and channeling a larger share of the UNEDIC surplus into unemployment benefits.
The signatories are currently working on a third version, which might obtain government approval in the near future.
Commentary
This game of "ping-pong" between the social partners and the government has to all intents and purposes led to tripartite negotiations in all but name. The government is perhaps on the verge of saving the parity principle of joint management through a reform process, which is slowly but surely winning over the support of most of the unions. However, the fact is that some of the arguments put forward by the government to justify its decision not to endorse the UNEDIC agreement could also apply to the state-run unemployment assistance system. Indeed, successive reforms have cut the number of unemployed people covered by the state-run system as well as the UNEDIC unemployment insurance system. These reforms have implemented more stringent eligibility criteria for assistance allowances, to such an extent that an ever-increasing number of unemployed people are now covered by the RMI guaranteed minimum income scheme - a mechanism which was not originally designed to bolster a flagging benefit system. Instead of the current tripartite wrangling, it would probably have been more productive to convene genuine tripartite negotiations to pool ideas on ways of improving benefit rules for all unemployed people, both those covered by UNEDIC and those covered by the state-run unemployment assistance system. (Carole Tuchszirer, IRES)
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