1997 Annual Review for France

This record reviews 1997's main developments in industrial relations in France.


According to the latest figures, over the first three quarters of 1997, GDP grew by 2.2%, while the National Institute of Statistics and Economic Studies (Institut National de la Statistique et des Etudes Economiques, INSEE), puts overall economic growth for the year at 2.5%. The public sector deficit stood at 3% of GDP. Inflation was brought under control - 1.1% in 1997, down from 1.7% in 1996. The employment situation was varied. At the end of December 1997, unemployment stood at 3,027,800, representing a slight 1.7% improvement on figures for the same period in 1996. These overall figures conceal quite different rates of unemployment among men and women and various age groups: unemployment among the young has decreased by 9% over the year; the percentage of women in employment continues to increase but at a slower pace; whereas the percentage of men in employment is continuing to fall, reflecting the decline in sectors dominated by male employment. However, the majority of women are employed on "non-traditional" contracts such as fixed-term or part-time ones - almost 40% of women are recruited on fixed-term contracts. There has also been a 1.2% increase in the number of long-term unemployed people. At the end of December 1997, they accounted for 36.8% of overall unemployment.

The GDP growth in 1997 led to an increase in job creation. In the early 1990s, a 2.5% GDP growth rate was considered to be the minimum necessary threshold for job creation. Last year, this very same rate created a total of 130,000 new jobs. These new job figures take into account 183,000 new positions created in the service sector despite continued job losses totalling 33,200 and 20,800 in industry and construction respectively.

Elections held in May-June 1997 led to the replacement of the incumbent conservative administration by a new Government led by the Socialist Party (Parti Socialiste, PS) with support from the Communist Party (Parti Communiste Français, PCF) and others.

Key trends in collective bargaining and industrial action

The major national tripartite conference on employment, pay and working time held on 10 October 1997 ended in a breakdown of negotiations, the main stumbling block having been the new Government's plans for the introduction of a 35-hour working week (FR9710169F) This led to major problems in collective bargaining for the remainder of the year - see below.

Trade unionism in France is generally fragmented, with very little joint action among the main confederations - see below. However, it should be noted that low membership and fragmentation does not mean social apathy. This was demonstrated in 1997 by industrial action mounted first at the SNCF railway system and then by lorry drivers (FR9711177F). During industrial action in these sectors, the unions demonstrated an ability to increase public awareness (which is becoming a very important factor), and to bring the conflict to a successful conclusion.

Industrial relations, employment creation and new forms of work organisation

Undoubtedly the most significant event in 1997, in political and social terms, was the unexpected change of government in France and the return of the Left to power, led by Prime Minister Lionel Jospin. The Socialists and their allies based their entire election campaign on an employment platform (FR9706149F). They committed themselves to creating 700,000 new jobs for young people (350,000 in the public sector and a further 350,000 in private companies) and promised to reduce progressively the statutory working week from 39 to 35 hours without reducing pay. They also promised to stimulate growth through increased consumer spending, in particular, by increasing the national minimum wage (SMIC). The new Government believed that increased growth alone, however great, would not be sufficient to reduce unemployment, and thus wished to implement strong incentives to be matched by similar initiatives from the social partners. Many measures such as a 4% increase in the SMIC, effective from 1 July 1997 (FR9706153N), were implemented during 1997, while a law creating 350,000 new jobs in the public and associated sectors was passed (FR9709163F). Legislation for the introduction of the 35-hour week (FR9712186N) was put to Parliament before the end of the year (this legislation was later approved by the National Assembly at its first reading in mid-February 1998). However, the Government's biggest gamble - to involve the social partners in the implementation of the 35-hour week - did not get off the ground.

As mentioned above, the October tripartite national conference on employment, pay and working time ended in the breakdown of negotiations between trade unions, employer organisations and the Government. The main stumbling block was the introduction of the 35-hour week. The unions were all in favour of incentives - to be incorporated into labour legislation - designed to encourage the working time reductions, whereas the National Council of French Employers (Conseil national du patronat français, CNPF), the main employers' confederation, stated that it was opposed to any attempt to reduce the statutory working week. During the conference, the Prime Minister suggested that the statutory 35-hour working week should come into force in January 2000 for those companies employing more than 20 people, and in 2002 for smaller firms. The Prime Minister hoped that the social partners would initiate negotiations, at both company and sector level, to find ways of implementing the new limit before it became mandatory. The subsequent bill provided for financial incentives for companies which succeed in introducing the 35-hour week while at the same time taking on more staff.

The employers' organisations stated publicly that they considered the proposals to be an "economic aberration" and pulled out of the negotiations (FR9711176F). The president of the CNPF stepped down from his position and was replaced in December 1997 by Ernest-Antoine Sellières (FR9712188N) The consultation process seemed in total deadlock and in certain sectors, such as banking (FR9802194F), employers decided to terminate their collective agreements because of difficulties over the working time issue. It would seem that 1997 was marked by a breakdown in negotiations between unions and employers' organisations.

The Government is concentrating on certain sectors and on individual companies in an effort to get negotiations restarted. Indeed, many companies, inspired by the 1996 "Robien law" - which seeks, though financial incentives, to encourage working time reductions and reorganisation to create or save jobs (FR9705146F) - have initiated full-scale experiments in reducing the working week. In January 1998, the Ministry of Employment published an assessment of the first year of this law. This study found that 1,030 new collective agreements, affecting 166,066 workers, had been signed implementing the law (the figure has since risen over 1,500). When these agreements were signed, the companies involved stated that the deals would create new jobs or save positions totalling 11% of existing employment levels. In the Government's opinion, this shows that companies can benefit from the reduction in the working week and that stable jobs can be created or redundancies prevented only if employers are willing to enter into negotiations and if government incentives lead them to do so. It is difficult to draw conclusions from the assessment of the Robien law as to how the law on the 35-hour week will be received. This issue, which dominated the final quarter of 1997, will remain at the forefront of social debate in 1998.

Developments in representation and the role of the social partners

The International Labour Organisation's 1997-8 World Labour Report (Industrial relations, democracy and social stability) showed that France, with 9.1%, had the lowest trade union density in Europe in 1995.

This trend towards reduced membership and declining electoral success that has befallen the unions was also demonstrated in the 1997 Conseils de prud'hommesor industrial tribunal elections, in which all employees (and employers) have the opportunity to elect their representatives in these unique joint structures that adjudicate employment disputes (FR9710171F). Turn-out in the 1997 elections among employees (FR9712185F) was only 34.4% (down on previous polls) and there was very little change in voting patterns. The General Confederation of Labour (Confédération générale du travail, CGT). remained the largest bloc with 33.1% of the votes, ahead of the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), which increased its support by 1.5%.

This situation of declining membership and support is coupled with another French peculiarity - the fragmentation of the union movement. There are five union confederations - CFDT, CGT, the French Christian Workers' Confederation (Confédération française des travailleurs chrétiens, CFTC), the French Confederation of Professional and Managerial Staff-General Confederation of Professional and Managerial Staff (Confédération française de l'encadrement-Confédération générale des cadres, CFE-CGC) and the General Confederation of Labour-Force ouvrière(Confédération générale du travail-Force ouvrière, CGT-FO) - which are considered as nationally representative. In addition, there are - especially in the public sector or in the civil service - many independent or autonomous unions. A few years ago, the Unitary Trade Union Federation (Fédération syndicale unitaire, FSU) split from the Federation of National Education (Fédération de l'Education Nationale, FEN) and today it is the largest union among teachers, and also - considering the high number of teachers - in the civil service. Many new unions such as "Solidaires unitaires et démocratiques" (SUD) - the majority of whose leaders are ex-CFDT members - have been created over the past few years.

It is possible that there will be some restructuring of the trade union movement in the months and years to come, which could primarily concern the smaller unions, which are in a process of regroupment. However, the prevailing tendency is a deep differentiation of unions with very little joint action among the larger confederations. It is, though, important to recognise - as pointed out above - that low membership and union fragmentation does not mean social apathy, and that 1997 saw several major industrial disputes.

The action mounted by unemployed people at the end of 1997 (FR9801189F) greatly influenced both public opinion and the position of trade unions, employer organisations and the Government. Formerly unheard-of types of action initiated by a minority have led to the emergence of a new player in the social arena - unemployed workers. Until recently, they had been denied either direct or collective means of expression. The media were largely responsible for publicising demands in this dispute. Far beyond the sporadic action undertaken, this event has raised questions for the entire trade union movement, as to ways of representing or supporting unemployed workers.

Industrial relations and the impact of EMU

France is set to meet the criteria for EMU. Debate on the impact of monetary union on industrial relations has concentrated on the impact of enforced budgetary stringency.

Conclusions and outlook

The new French Government formed after the legislative elections attempted to alter France's economic and social agenda by prioritising measures for job creation and for the creation of a social as well as economic European Union. Since the election, industrial relations have, as is often the case in France, depended largely on the Government's political decisions.

The main questions raised by the political and social actors in 1997 give an insight into the dominant issues in 1998 - these relate to the conditions for growth and, of course, job creation initiatives. In the industrial relations field, whether or not the negotiation and consultation process is restarted will be a major issue, as will the extent to which the social partners take into account new issues and challenges. However, it should be pointed out that, as is often the case in France, consideration of these issues could be interrupted by new industrial action, the breaking off of relations between parties or by reappraisal of the issues.

(Alexandre Bilous, IRES)

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