Collective bargaining in France

Collective bargaining in France has been predominantly conducted at sectoral level. Typically, central agreements are concluded between employer organisations and unions at industry level. Subsequently, social partners frequently apply to the Ministry of Labour for the extension of most provisions of the agreement, which is granted in virtually all cases. Therefore, the coverage rate of collective bargaining is estimated to be above 90%. The decentralisation of sectoral bargaining started in the early 1980s (with the implementation of the Auroux laws), but the principle of favourability, which forbids company-level agreements from providing less favourable provisions than higher-level agreements, has been maintained. This principle was diluted through reforms in 2004, 2008 and 2013. With the labour law reform of 2016, collective bargaining was further decentralised, as the law gives company-level agreements precedence over those at sectoral level or the law itself if the latter so provides. This reversal has been provided for since 1 January 2017 in connection with the legislation on working time.

Wage bargaining coverage is remarkably high in France, and the European Company Survey figures seem to underestimate the real coverage. In reality, almost all employees are covered by national sectoral wage agreements. The latest available national data are outdated, but they show that coverage increased from 93.7% to 97.7% for employees in the private sector between 1997 and 2004. The survey on which these figures are based (the Labour Activity and Employment Conditions Survey) has been discontinued. Recent OECD data also estimate the share at 98%.

Collective wage bargaining coverage of employees, all levels

Note: * Percentage of employees working in local units where more than 50% of the employees are covered by a collective pay agreement against the total number of employees who participated in the survey.

Sources: Eurofound, European Company Survey 2013/2019 (including private sector companies with establishments with more than 10 employees (NACE codes B–S); the question in the survey was a multiple choice question and multiple responses were possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01] (including companies with more than 10 employees (NACE codes B–S, excluding O), with a single response for each local unit); OECD and AIAS, 2021; authors’ estimates.

Working time is set by law, but its organisation is negotiated at company and sectoral levels. As the legislator made negotiations at company level compulsory, it is mainly at the company level where working time arrangements that differ from the statutory 35-hour week are renegotiated. Wages are negotiated mainly at sectoral level, but also frequently at company level because the legislation stipulates that employers (in companies with over 50 employees) have to launch wage negotiations each year. However, the minimum wage is fixed by law and has to be respected by sectoral and company-level agreements.

A restructuring of sectoral collective agreements (conventions collectives de branche) has been under way since 2016, having been launched by the publication of a decree that sets out the restructuring procedure. The aim is to reduce, over three years, the number of sectors from 700 to around 200. The labour law reform of 2017 has accelerated this process, with the goal of reaching 100 sectors and allowing the Minister of Labour to merge sectors from 10 August 2018, rather than from 10 August 2019. By the end of 2021, Dares (2023b) recorded about 265 main sectoral collective agreements, each covering at least 5,000 employees.

Levels of collective bargaining, 2022

Articulation

The September 2017 labour law reform has reduced the importance of sectoral agreements and has put company-level agreements at the centre of the collective bargaining system. Ordinance No. 2017-1385 lists specific topics (such as minimum wages) for which sectoral agreements remain in effect. It also includes a limited list of topics for which the specific agreement determines whether it takes precedence over company-level agreements. Sectoral agreements will apply to all other matters in the absence of company-level agreements. Therefore, for many issues, company-level agreements remain in effect.

There is no clear trend, but wage bargaining activity peaks at the beginning and the end of the year, and in the months before the French summer holidays in August.

The decentralisation of collective bargaining leads to the very weak coordination of wage bargaining. Company-level social partners have important autonomy to negotiate on wage changes, as only minimum rates are negotiated at sectoral level. In 2022, in over 39 sectors, negotiated minimum wages were still lower than the legal minimum wage, which has to be respected. There is little horizontal coordination (i.e. little coordination between sectors).

Extension mechanisms are used extensively. This practice means declaring the terms of a collective agreement, negotiated between the representative organisations within a subsector (branche), applicable to all the employees and employers in that subsector. In order to extend a collective agreement, social partners have to ask the Ministry of Labour to issue a ministerial order. A vast number of national sectoral wage agreements are extended, resulting in very high coverage rates.

New legislation on collective bargaining passed in 2008 allows company-level agreements to depart from the principle of favourability, but explicitly excludes minimum wage levels negotiated at sectoral level. Recent changes have introduced the possibility of company-level agreements providing less favourable pay in exchange for job security when companies are facing economic difficulties. The 2016 labour law reforms extended the option of providing less favourable remuneration for overtime. For instance, the new regulation stipulates that a company-level agreement or, in cases where there is no such agreement, a sectors-level agreement fixes the rate for hours worked beyond the legal maximum. However, this rate cannot be lower than the statutory additional payment of 10%. This means that social partners at company level could agree on an additional payment of 15%, even if the sectors-level agreement provides for 20%.

The practice of including provisions with opening clauses or opt-out clauses in collective agreements is very rare. However, the labour law reform of 2017 allows sectoral agreements to be adapted to the size of the company. For example, some of the stipulations of these agreements may not cover small businesses.

Sectoral wage agreements usually do not expire. Social partners negotiate annually at sectoral level. If no agreement can be reached, the previous agreement remains in place.

The concept of including peace clauses in collective agreements is unheard of in France, as it could be considered to be a violation of the constitutional right to strike.

In terms of financial participation, profit-sharing schemes and employee savings schemes are the most common topics in collective agreements made at company level (a topic in 34,120 agreements in 2021, out of a total of 76,820). The other main issues are wages and bonuses (17,869 agreements), working time (16,800 agreements), working conditions (6,070 agreements) and gender equality (5,710 agreements). This is also a consequence of legislation that obliges social partners to negotiate regularly on gender issues. The commitment of the social partners to negotiate is due to the historic industrial relations environment, as companies are obliged to negotiate annually on a range of topics (e.g. wages, working time, the organisation of work, collective health insurance, financial participation) or on a multiannual basis (gender equality, the employment of workers with disabilities). Commonly, the commitment is to negotiate but not reach an agreement. However, the employer has to reach an agreement with employees on issues related to gender equality and older workers, or, if the social partners fail to agree, adopt a plan of action. The annual assessment of collective bargaining, launched by the Ministry of Labour, gives an overview of the main topics negotiated at sectors and company levels.