Conference on employment, pay and working time

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France's tripartite "national conference on employment, pay and working time" was held on 10 October 1997. The agenda was very full, ranging from youth employment to working time by way of pay policy. Prime Minister Lionel Jospin's most dramatic decision was a bill to implement a 35-hour working week, beginning in the year 2000. Trade unions and workers greeted this announcement very favourably, while the employers' associations reacted angrily. The CNPF - whose president subsequently resigned - believes that it will have to "wage a very hard and pitiless campaign" against the 35-hour week.

The "national conference on employment, pay and working time" was held at the Hôtel Matignon, the official residence of the French Prime Minister, Lionel Jospin, on 10 October 1997. It was the first time in the history of industrial relations in France - except for periods of critical social crisis such as 1936 or 1968 - that a meeting at the highest level between the social partners and the state has sought to discuss such a wide variety of subjects, including pay, unemployed people coming to the end of their benefit entitlement, employers' social contributions, and working time.

The Prime Minister announced this conference in his investiture speech to Parliament in June 1997 (FR9706149F). The Government wanted to dedicate this conference to the major issues directly or indirectly concerning employment. It therefore thought that a certain period of preparation was necessary, so as to allow the deepest possible analysis of, and agreement on, the issues. Throughout the summer, the ministers preparing the conference and primarily Martine Aubry, Minister for Employment and Solidarity, consulted with employers and trade unions. Besides, as soon as it came to power, the new Government had to give some strong hints as to its policies, especially with regard to pay, in order to help jump-start consumption. As a result it took two significant initiatives:

  1. a 4% increase in the national minimum wage (SMIC), effective on the 1 July 1997 (FR9706153N); and
  2. a substantial increase in the CSG"universal social contribution", accompanied by a decrease in health contributions levied on pay, which had the knock-on effect of increasing purchasing power among wage earners by 1% (FR9709164N).

During the October conference there were numerous discussions on various subjects. Unions and employers' associations expected the Government to give the main guidelines, and the Prime Minister put forward his major suggestions at a press conference.

The Government's proposals

The major initiatives discussed during the conference were publicly disclosed by Mr Jospin on the evening of 10 October.

  • Drive for employment. The Government is willing, with the approval of the employers and unions which jointly manage the UNEDIC unemployment insurance system, to create a complementary measure to the ARPE (Allocation de Remplacement pour l'Emploi). It would allocate FRF 40,000 per year, per worker in order to allow employees who began their working lives at the age of 14 and who have paid contributions for 40 years from the age of 16, to retire at the age of 56 if in exchange new jobs are created.
  • Employers' social contributions. Mr Jospin declared that he was determined to change the base for employers' contributions and to continue in his drive to reduce "the charges burdening employment". He proposed a reform to stabilise the receipts of the social security system and balance out the charges on companies in a way which is not unfavourable to employment.
  • Increasing employment in small and medium-sized firms. Mr Jospin requested proposals for the simplification of administrative rules facing these companies from the Minister for Employment, Ms Aubry, and the Minister for the Economy, Dominique Strauss-Kahn. The Prime Minister also said that he was "very interested" in the idea of creating a new "single status for the first employee," which would allow people to benefit from a type of "service employment" cheque scheme. Such a scheme was created a few years ago in order to make the employment of household staff easier, and to avoid the complex administrative procedures that companies are faced with in recruiting and paying social contributions. The Prime Minister wanted to see an agreement on this matter between employers' associations and unions.
  • Jobs for young people in the private sector. The Government proposes that each sector, on the initiative of central intersectoral employer and union organisations, appraise the situation of youth employment and its prospects. Based on this information, the social partners will be able, on a sector-by-sector basis, to negotiate agreements with quantified aims to raise the proportion of young people in jobs, improve job security, increase training and alter the "age pyramid" so that young people make up a greater proportion. The first results of these meetings will be established during the first quarter of 1998.
  • Collectively agreed pay and minimum wages. The Government has requested employers' associations and unions to restart sector-level negotiations on upgrading the lower pay rates set by collective bargaining, and to produce "precise results" at a meeting of the National Collective Bargaining Commission in 1998: "It will be up to the Government to draw conclusions from these negotiations and also those on the reduction of working time and to apply them in the drawing up of SMIC policy".
  • Unemployed people reaching the end of unemployment benefit entitlement. The Government intends to review the level of the "special solidarity benefit" (Allocation Spécifique de Solidarité, ASS) paid by the state to unemployed people reaching the end of their entitlement to unemployment benefit.
  • Reduction of working time. At the end of 1997, the Government is to put a "guidelines and incentives" bill before Parliament, to be debated in early 1998. This bill will come into force on the 1 January 2000 and set the legal working week at 35 hours for all companies with 10 or more employees. This will be applied to companies with fewer than 10 employees from 2002, at the end of the present legislature. The Government is leaving it up to the social partners to negotiate, at company or sectoral level, the way the reduction in the working week should be introduced and to "balance out the respective interests". In a move to make these negotiations easier, the Government is offering assistance, to be stipulated in the new law, to all companies which negotiate a 10% reduction in working time, and which increase their workforce by at least 6%. This assistance will be FRF 9,000 per employee in 1998 and could be as high as FRF 13,000 for those companies making a greater effort to create jobs, primarily by pushing towards the ultimate goal of a 32-hour week. A special measure will be put in place for those companies which avoid redundancies by reducing working time. The Government and the social partners will meet again in the second half of 1999 to evaluate both the results of the negotiations and the economic situation. Based on this, the Prime Minister will then present a further bill, setting out the actual ways in which the new legal working week is to be introduced and stipulating the date of its introduction. In particular, this bill will define the "structural assistance scheme" which will prolong the "incentive measures" even after the new working week has come into effect. Mr Jospin stressed that the reduction in working time should not lead to cuts in pay or a blow to competitiveness. He added that: "as a matter of fact, the success of the reduction in the working time depends on controlled increases in pay."

Social partners' reactions

Trade unions

The trade unions were very satisfied with the statements made by the Prime Minister. Marc Blondel, secretary general of the CGT-FO confederation, declared that "it is undoubtedly the first time that unions are all satisfied with an agreement at the same time. It is perhaps a good sign for the future." As soon as the conference ended, statements made by several union leaders all seemed to adopt the same line, even if the unions still need to come to agreement on the ways in which the 35-hour week is to be introduced.

Nicole Notat, secretary general of the CFDT, said that we are witnessing "the acceleration in the move towards a reduction in working time". She thinks that "if all the undertakings and decisions made are put into practice, and you can be sure that the unions will work hard for that, then all those expecting something to be done in favour of employment will not be disappointed." The conditions for the move to the 35-hour week have still to be discussed by the CFDT, for which the most important matter is the fact that "the whole process will be based on negotiation before the reduction in the legal working week." In the opinion of CFDT, the possibility exists of annualising working time, as it is a means of "avoiding the implementation of methods of work organisation based on exaggerated recourse to overtime, lack of job security and the imposition of part-time working. We are well aware that we must work within a framework allowing companies to deal with the ups and downs of demand."

Louis Viannet, secretary general of the CGT, also sees the decisions in a positive light: "We have come away with levers in our hands to improve the employment situation." As far as his organisation is concerned, the "legal guidelines for the introduction of the 35-hour week at a specific date and with no cuts in pay are exactly what the CGT wanted." The union even considers that "we must now, in workplaces everywhere, put further pressure on the breach that has been opened to demand new pay negotiations." Mr Viannet says that "a new dynamic must be created and we must extricate ourselves from the pernicious system where a reduction in purchasing power slows down the economy and leads to unemployment." The CGT secretary general attributes the "defeat suffered by the CNPF" employers' confederation to "the united front presented by the unions (...) The fact that workers can count on unions to overcome differences and come to agreement on essential points as they did today is a trump card which will bring us even closer together over the days to come."

Marc Villebenoît, president of the CFE-CGC, is pleased that the bill announced uses both the "the final date limit as a stick and the financial incentives as the carrot", and is very critical of the attitude of the employers: "they cannot refuse a law and at the same time refuse to negotiate."

The CGT-FO was also very happy with the up-coming 35-hour week legislation. However, its secretary general was disappointed not to have obtained a further increase in the SMIC minimum wage, as it had requested: "The Government has shown us a certain amount of support while the employers are talking of an end having been put to the bargaining process. Sector-level negotiation will be a test of the goodwill of the employers. If they block negotiations, it remains to be seen how employees will react."

The CFTC is also worried by this possibility. Its president, Alain Deleu, said that "the huge social change that the implementation of the 35-hour week will represent cannot come about if the CNPF is disregarded or decides not to participate."

Government policy is designed to combine the bill's role as an incentive, with collective bargaining among the social partners. The Government had counted on this solution both prior to and during the conference. The unions are also counting on negotiation so that progress towards the 35-hour week can be made even before the law is officially passed. Employers take a rather different view of the matter.

Employers

As soon as the conference ended, employers' organisations declared it a scandal. Lucien Rebuffel, president of the CGPME, representing small and medium-sized employers, declared that a 35-hour week with no cuts in pay would "lead to an increase in unemployment." As far as the CNPF (Conseil national du patronat français), the largest employers' association, is concerned, the decision was "entirely motivated by ideology". Its president, Jean Gandois, said that: " We have lost a battle because ideology triumphed over reason despite all our warnings (...) We were taken for a ride for the whole day, as this meeting took place in a spirit of cooperation between all partners, to which we contributed a great deal." Within the CNPF itself there were more virulent attacks. Denis Kessler, the organisation's vice president, mentioned a possible CNPF withdrawal from organisations jointly run by employers' associations and unions, and others spoke of a total halt to all national negotiations.

During a meeting of the CNPF's national committee on 13 October, Mr Gandois decided to tender his resignation. This is a first for the organisation. His resignation will be effective as of 16 December when a successor will be elected by CNPF's general assembly. Mr Gandois was elected to the post in December 1994 for a period of five years. At a press conference, he declared that: "I have decided, faced with what must be considered a failure, to tender my resignation as president of the CNPF to the executive committee." He then went on to say that employers had "no other option than a very hard and pitiless struggle [against the 35-hour week]. All social dialogue will be halted (...) We are going to have to fight much harder. Others are much more qualified to lead this battle than I am (...) I am more of a negotiator than a killer. Given my taste for openness and dialogue, I do not think that I fit the profile which will be necessary to defend companies over the coming months."

In a press release, the CNPF stated that between now and the general assembly on 16 December when an election will be held to renew the whole executive committee, it will "draw up an alternative programme to beat unemployment in France by other means than the authoritarian and general reduction of working time." The general assembly will afford an opportunity to organise an employers' conference, gathering all parties concerned.

Commentary

Will collective bargaining be halted as result of the CNPF's attitude? Jean Gandois' announcement of "putting a halt to all social dialogue" would lead us to think so. Internal conflicts apart, we would certainly have to go back decades to find such an intransigent attitude from the main French employers' association.

The Government's plan is, perhaps temporarily, cut off from one of the tactics on which it counted the most - that of finding solutions to the problem of minimum pay levels and the possibility of extending the scheme promoting early retirement to create new jobs. If the employers continue to be intransigent, then the aim of a negotiated move to the 35-hour week, adapted to different situations, is likely to be blocked at sector level, where resistance to the new working week seems to be greatest.

Although dialogue could certainly take place within companies and agreement could be reached based on the principles laid down by the Prime Minister, we have witnessed a blow to the structure of industrial relations in France as it has grown up over the past few years - a complicated "game" in which the law and bargaining play an equal, if not always satisfactory, role. The employers are dissenting. Is their position tenable in the long term or will it in turn be seen as ideologically motivated because employers are faced with a Government that does not suit them? (Alexandre Bilous, IRES)

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