35-hour week introduced in exchange for greater flexibility at Peugeot-Citroën

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The motor manufacturer, PSA Peugeot-Citroën, has become France's first major private sector group to implement the 35-hour working week, following an agreement in February 1999. The deal, approved by all the unions except CGT, provides for the reduction of working time with no loss of pay, in exchange for greater flexibility.

On 19 February 1999, after more than four months of negotiations, five trade unions represented in the PSA Peugeot-Citroën group (which employs 92,000 staff) signed a draft agreement on the reduction of working time put forward by the management. The deal is in response to the 1998 "Aubry law" introducing the 35-hour working week (FR9806113F). The unions involved were the affiliates of four of the main confederations - CFDT, CFE-CGC, CFTC and CGT-FO- plus the Confederation of Free Trade Unions (Confédération des syndicats libres, CSL) an independent union established in the metalworking industry and the second-largest union at PSA. Only CGT, which receives the most votes in the group's workforce elections, declined to sign up to the agreement.

The five signatory unions, under pressure from employees - and especially a strike organised in January by CGT at the Sochaux factory (eastern France) - initially rejected a draft proposal in late January. Despite the lack of wage cuts involved, the employees' hostility was focused on three points:

1. the exclusion from the calculation of working hours of break time hitherto included. If the method of calculation is not changed, the average length of the working week is reduced from 38.5 hours to 36 hours 40 minutes, rather than 35 hours;

2. the annualisation of working hours, and the implementation of "time savings accounts" for surplus time worked, enabling days off accrued to be taken over a three-year period. Work can be organised in three-, four-, five- or six-day weeks, depending on local agreements; and

3. the obligation for professional and managerial staff to spend four of their 11 extra days off on training courses.

In order to lessen the effects of this increased flexibility, the agreement's second draft provided for certain compensatory measures:

• a FRF 500 bonus and two extra days off for manual workers;

• employees can choose either a pay bonus or extra time off in compensation for Saturday work;

• the possibility for the company to oblige workers to carry over saved-up days off from one year to another is limited to only five days, as opposed to 60 in the previous plan. Above this figure, the employee can ask for the extra time accumulated to be paid instead of taken as holiday; and

• professional and managerial staff can take days off as they wish.

An employment plan has also been put together in exchange for the new measures. Over five years, management foresees the retirement of 12,500 employees and the recruitment of 8,700 new staff - 4,200 to compensate for early retirements, 3,000 created by the reduction of working time, and 1,500 linked to increased production. State funding for early retirement, which may affect the entire motor manufacturing industry, is conditional on the implementation of the 35-hour working week and the recruitment of young people. The management of Renault began talks on this very subject in early February.