Reorganisation and reduction of statutory working time: early assessment of the Robien law
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The publication of an assessment commissioned by the National Assembly's Finance Commission, and the campaign for the May/June 1997 general election, have reopened the debate in France on the content and efficiency of the Robien law, which seeks to encourage working time reductions and reorganisation to create or save jobs. Politicians, economists, employers and unions remain divided whilst the number of collective agreements at company level based on the law is increasing.
The law on working time
For almost 20 years, various legislative modifications and collective agreements have sought to make the regulation of working time in France more flexible. More flexibility in working time could have a positive effect both on productivity and competitiveness. Combined with a reduction in the length of working time, it could also have a positive effect on job creation. The five-year law on employment, passed in December 1993, has made it much easier to introduce an "annualised hours" mechanism by which hours worked can be calculated over a 12-month period, by agreement at industry or company level, in exchange for a gradual reduction in total working time. The law also extended this system to part-time work.
In this context, employers and trade unions (with the exception of the CGT) signed a national agreement in October 1995, which covers all sectors of industry. It encouraged: the establishment of the system of calculating hours worked on an annual basis (instead of a weekly one); part-time work; and the use of time off in lieu if overtime is worked. The application of these measures was referred to negotiations at industry level, of which the first appraisal was to be carried out at the end of the second quarter of 1996. However, the results have been disappointing. Agreements were only reached in some sectors of industry, and their content has been generally judged as far from innovative.
Meanwhile, since November, 1995, at the initiative of some of its members, the National Assembly had been examining a bill to which the Government, after much hesitation, finally gave its approval. The law, called the Robien law (loi Robien) after its sponsor, the President of the National Assembly's Social Affairs Commission, came into effect on 11 June 1996.
A dual negotiation mechanism
The principle behind the Robien law is simple: the state gives financial concessions, in the shape of partial exemption from employers' social security contributions, if a large reduction in hours worked (combined with a reorganisation of the working week), enables the same proportion of jobs to be created, or redundancies avoided. The law's application necessitates a dual form of negotiation: a collective agreement must be signed within the company, which then negotiates a convention with the State on this basis. The same option is available at sector level, but as yet, has seldom been put into practice.
In the case of a "hiring" agreement (under which jobs are created), a 10% reduction in the working week, combined with 10% more workers being recruited, gives the company the right to a 40% exemption from social security contributions in the first year, then a 30 % exemption for the next six years (or 50% and 40% respectively, if the reduction is 15%). The new levels of staffing must be maintained for at least two years. In the case of a "defensive" agreement (redundancies avoided) the exemptions are the same but are granted for only three years. They can be extended for up to seven years by a rider to the contract.
Employers and unions split over the law
The law, which, unusually for France, was originally a parliamentary initiative, has upset the strategies of the participants traditionally responsible for this field.
The Government's position has been contradictory. First of all, because the governing majority in the Assembly is divided over this issue. Secondly, because the Minister of Employment has encouraged the application of the law, whilst at the same time reducing the number of industries covered (by the exclusion of competition-free sectors), whilst the Budget Minister has been energetically backpedalling for fear of high expenditure.
Officially, employers have been hostile to a measure they feel to be cosmetic and costly.Jean Gandois, the president of the CNPF employers' confederation, estimates that "the cost of this law, if it succeeds, or its outright failure, will be enough to demonstrate the necessity of its repeal." However, many businesses are interested in the law because of the financial advantages it offers.
The trade union movement is split. The CFDT, the CFTC and the CFE-CGC are in favour, seeing the chance of positive agreements for job creation, with considerable wage compensation for the workforce (thanks to the use of social security exemptions). The CFDT is also stressing the fact that the obligation to reach a collective agreement will encourage the penetration of unions into small businesses. The CGT and the CGT-FO however, are hostile to the law, particularly due to the "windfall" effect it will have for businesses, and the threats it creates for the funding of social security. The CGT-FO also fears the weakening of negotiations at industry level. However, within companies, the union branches of these two organisations can only judge from practical situations. Until now, they have signed almost one in three of the agreements concluded (compared with the 90% that the CFDT has signed).
Difficulties in assessing the law's effects
By the end of March, the Ministry had registered 344 agreements under the Robien law, of which 207 were "hiring" and 137 "defensive". The latter, used especially in large companies, covered more workers: 26,000, compared with 21,000 for the "hiring" agreements.
It is very difficult to predict their impact. This depends, first of all, on the assumptions made as to the development of several key variables. What will be the level of wage compensation for the workers concerned? What will be the salary of the newly-recruited workers? What will be the impact of the reorganisation on productivity? Secondly, the impact will vary according to the timescale involved: what will happen after two years (when the obligation to maintain staffing levels ends)? and after seven years (when the social security exemptions end)? Many simulation tests have been carried out. Unsurprisingly, different results are given depending on the assumptions upon which the tests are based.
The assessment report commissioned by the National Assembly ("La loi Robien : une première évaluation", rapport d'information no. 3506, Assemblée nationale (17 April 1997)) is generally positive, but emphasises the opposition between two types of agreement. The majority of them use the available financial concessions to have a wide-ranging reorganisation of the working time adopted and/or a modification of the structure of qualifications, as new sources of productivity and flexibility in production emerge. However, other agreements simply seek to buy industrial relations harmony by avoiding redundancies and postponing the necessary restructuring.
The experience of the Robien law illustrates the profound disagreement in France between participants in the debate over the reduction and reorganisation of working time: the political and economic actors, employers and unions. The innovation inherent in this law has, in a way, only been possible by surprise.
However, even if its success is confirmed, the law will exercise no statistically significant effect on the average working hours of most workers. The question of opportunity and conditions for achieving a general reduction in the length of working time remains on the agenda. It is difficult to predict whether the Robien law will have an effect on the problem, either as a stimulant or as a substitute for further action. (Jacques Freyssinet, IRES)
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