MEDEF proposes new types of employment contract

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On 3 May 2000, France's MEDEF employers' confederation and the main trade union confederations debated the former's proposals for a new form of employment contract to be offered to unemployed people, and the reform of unemployment benefits. They were due to meet again in late May to review these issues, as well as new forms of "atypical" employment contract that the employers hope to introduce.

In late 1999, the MEDEF employers' confederation launched a project aimed at achieving a "new social constitution" (nouvelle constitution sociale), to include a "social-partner-led overhaul of the industrial relations system" (FR9912122F). As a result, the leaders of all the main trade union confederations and employers' associations met in February 2000 and agreed a joint list of eight main issues for negotiation in 2000 (FR0002143F). In relation to three of these topics - unemployment insurance (FR0004154N), the fight against precarious employment and the integration of young people into the labour force - MEDEF has tabled three proposals for new types of employment contract.

The first proposed contract concerns unemployed people, and is called the "back-to-work assistance contract" (contrat d'aide de retour à l'emploi, CARE). Under the terms of this contract, after a skills audit has taken place, job-seekers would be offered training, mobility grants and above all, job opportunities. However, if the unemployed person did not attend evaluation interviews or turned down a particular training scheme or a particular job, benefit would be reduced or even cut off. The "CARE" plan, submitted by MEDEF to the trade unions at a meeting on 3 May 2000, provides that benefit should begin to fall after a job-seeker has turned down a given number of options within the three-month period of the contract.

The other two proposed contracts are responses to "atypical" work. MEDEF feels that the currently available contracts - fixed-term employment contracts and temporary agency work - "can no longer cope with the demands of the new economy". This is why, on 28 March, the employers' organisation suggested the creation of two new types of contract:

• the assignment contract (contrat de mission), which would last for the period necessary for the employee to complete a project. This type of contract already exists in the building and public works sector, where it is known as a "site contract" (contrat de chantier); and

• the "five-year maximum duration contract" (contrat à durée maximum de cinq ans, CDM) which would replace the current fixed-term contract, which is limited to an 18-month duration. The details of the CDM would be negotiated with trade unions at company level, or failing that, at sector level. In practice, the two sides would have to determine jointly which groups of employees the CDM could be used for, the way in which the contract could be ended and the circumstances in which it would be deployed.

These various proposals were made in joint working groups set up following the February meeting, which used "brainstorming" techniques. In the unions' opinion, these groups served mainly to enable MEDEF to gain publicity for its new ideas. On 3 May, the unions managed to have these working groups disbanded and more formal negotiating meetings organised in their place. Another advance for the unions was to make unemployment insurance the only item on the agenda for the 3 May meeting, and not the three proposed new types of contract.

The meeting on 3 May yielded no tangible results. The unions have made public their reluctance to take what many view as a potential step backwards. Another meeting on unemployment insurance was due to be held on 24 May, while the proposed "atypical" contracts will be on the agenda at a meeting on 31 May. The five nationally representative union organisations which are taking part in discussions - CFE-CGC, CFDT, CFTC, CGT and CGT-FO- have already put their opposition to these two contracts on the record. For the unions, these new contracts, whose details would be negotiated at company and sector level, represent a challenge to "industrial relations public order" and the hierarchy of legal and other norms governing employment. The unions have even sent a joint letter (an extremely rare occurrence in France, given the lack of unity among unions) in which they criticise MEDEF for having put forward its proposals without first agreeing to an evaluation of the "job situation and the reality of precarious employment", as requested by the signatory unions.

Employment law specialists question the validity of the MEDEF proposals. Hélène Masse-Dessen, a lawyer at the Cour de cassation (France's highest appeals court) thinks that MEDEF is proposing "a variant of the fixed-term contract. Potentially limited to a five-year period, this contract could be ended more easily by the employer, without the guarantees attached to the open-ended employment contract (which still represents the legal norm), which have been gained along the path of industrial relations history, being applicable," (quoted in La Tribune on 21 April 2000).

Antoine Lyon-Caen. a professor of employment law, feels that the MEDEF proposals are aimed at protecting employers against the intervention of the legal system: "The more you have contracts that are exempt from the agreed norms, the more dismissals law, an area in which judges are more and more involved, is sidelined. As it stands, MEDEF would not be able to get an agreement on reworking the dismissals laws, so it has chosen to deal with the issue by broadening the diversity of contracts, which enables it to supersede collective redundancy procedures and prioritise more individualised employment management systems. This is a far less politically controversial area. Talking about a 'new employment contract' does not shock anyone. The expression is being used as a decoy," (quoted in Le Monde on 11 April 2000).

In the initial phase of the negotiations over the potential overhaul of French industrial relations (since 3 February 2000), the state has not intervened, so as not to interfere in the social partners' discussions. However, it has retained the right to legislate on the issues currently being debated. On 24 May, the Minister of Employment and Solidarity was due to present an "industrial relations modernisation" bill, dealing with fixed-term contracts in particular. This proposal should come before parliament during the autumn 2000 session.