Eurocopter lands on a 35-hour week

Download article in original language : FR9806115FFR.DOC

While France's CNPF employers' confederation has been vociferously opposing the law - adopted in May 1998 - implementing the 35-hour working week in 2000, large companies have been negotiating agreements trading off "working time" for "flexibility". These agreements will be implemented prior to the legislation coming into force, in return for substantial benefits for the employers. Eurocopter France is a "pioneer" in the metalworking industry. Could the agreement it signed with four unions on 31 March 1998 set a standard?

Eurocopter is the leading European helicopter manufacturer and the biggest exporter worldwide. The Franco-German company, 70% of which is owned by Aérospatiale (France) and 30% by DASA (Germany), operates two plants in each of the countries. In France, 800 people are employed at the La Courneuve factory near Paris and a further 5,200 work at Marignane near Marseilles, where the company is the region's largest industrial employer.

The company had already been faced with a downturn in sales which led it to introduce a 37-hour week in 1984, but a sudden drop in military orders in the mid-1990s pushed the company further into the doldrums and resulted in the drawing up of several cost-cutting programmes. The latest of these, signed in late 1995, provided for further job cuts and a move to a 36-hour week for a two-year period. In autumn 1997, a review of the plan carried out by both trade unions and management revealed two major changes in the company's business environment. These changes stemmed on the one hand, from the October 1997 tripartite national conference on pay, job creation and the reduction of working time, during the course of which the Government set forth its intention to legislate to cut the statutory working week (FR9710169F), and on the other from optimistic market forecasts linked to two new models (Tigre and NH 90) in the company's range of helicopters.

Both unions and management agreed to work these perspectives into a new collective agreement and to create, through agreement, the trade-offs that management judged necessary if it were to face up to its new economic operating conditions. The agreement was signed by the company and four unions on 31 March 1998.

A comprehensive agreement

Following a transitional year in 1998, the company's working week will, beginning from 1 January 1999, be determined on the basis of an average of 35 hours (37.5 hours for managerial and professional staff), "annualised" by alternating four-day weeks with five-day weeks according to a yearly calendar fixed by the signatories to the agreement, which may be modified during the course of the year, subject to "consultation" with the unions.

In terms of pay, the reduction in working time will be compensated at an average level of 60% (ie, employees will lose an average of 40% of their pay for the difference between the old and new working week). There is a sliding scale which means that for those at the lowest pay levels, the loss will be limited and 92% of previous remuneration will continue to be paid.

Within the confines set by law and collective agreements, management can ask employees to work "surplus hours" (heures excédentaires) on those Fridays which would not normally be a working day. These hours are to be made up the following week or within a period of six months. They will be paid at normal hourly rates since they are not defined as "overtime". They will be compensated for in time off, and management included in the agreement its preference for these hours off to be grouped together or added on to annual holiday leave or winter holidays. In the event that these hours off have not been taken, it will be possible to credit them to a "time savings account" which will be set up from January 1999. This personal account can also be used to save a portion of annual leave, with the possibility of carrying over the total for a maximum of three years.

In the same way, it is expected that a proportion of the employees (with a maximum of 15% of the total workforce) could be asked to opt voluntarily for an unconventional working week running from Wednesday to Saturday with the aim of increasing the amount of time that equipment is actually in use. In this case, as an incentive, a working Saturday would be one hour and 50 minutes shorter than a normal working day.

Personal flexible timetables will enable all workers to organise their own working day and compensation for extra hours, within a framework of specific limits determined by a conventional "flexitime" system of core and flexible hours. This mechanism will be managed and monitored by a "clocking-in system", which will also be extended to managerial and professional staff.

The agreement also provides for the creation of 360 new jobs on open-ended employment contracts. However, Eurocopter has not hired anyone since 1992 and - according to the unions - new jobs would probably have had to be created even without reducing working time.

Will the agreement set a standard?

The Government's new law was passed by Parliament in May 1998, and validated by the Constitutional Council in June (FR9806113F). It sets the length of the statutory working week at 35 hours as of 1 January 2000 in companies employing more than 20 people, and from 1 January 2002 for smaller firms. Under certain circumstances, agreements at company level which introduce the 35-hour week at an earlier date and create or save jobs, attract state grants. While the CNPF employers' confederation has been vociferously opposing the new law, a number of large companies have been negotiating agreements trading off "working time" for "flexibility". These agreements will be implemented prior to the legislation coming into force, in return for the benefits mentioned above.

The agreement at Eurocopter pre-empts the implementation of the law but has not included the mechanism giving access to state benefits. This mechanism requires a 10% reduction in the working week as well as the creation of new jobs equal to 6% of a company's total workforce. This would have brought Eurocopter to around the 33-hour week mark. Management has shied away from more complex organisational problems involved in this process, as well as the delicate debate on pay compensation, which neither the main unions nor management were keen to initiate.

The 31 March agreement was signed by management and four of the company's five unions : CGT-FO (the union supported by a majority of the workers) the CFE-CGC, CFDT and the CFTC. These unions favoured the deal because it introduces the 35-hour week early and places no obstacles in the way of pay growth. The CGT, which is a minority union, refused to ratify the agreement, which in its opinion gives too much weight to the trade-offs required by management, especially in terms of annualised hours.

The company's management can quite justifiably feel satisfied with the agreement, which meets two imperatives: increased flexibility and an increase in the amount of time machinery is in use. The extension of operating hours is obtained both on a daily and weekly basis - 35 hours over four days plus certain Fridays, resulting in a "flat number" of daily usage hours which management estimates at eight hours and 20 minutes. The number of operating hours over a week is also increased by the 15% of the workforce operating on a working week running from Wednesday to Saturday, since by concentrating this 15% flexibility entitlement on production line employees (around 2,000 workers at the Marignane plant), a constant number of workers will operate the machines over a six-day week. The fact that overtime will be concealed (transformed into surplus hours) and that Saturday working will become commonplace (with a one hour and 50 minute "bonus") will result in big increases in the amount of time that equipment is in use and will bring about a very favourable cost/benefit ratio for management. The company's management can, as it has already announced, envisage maintaining an ambitious profit-sharing and pay policy.

Commentary

The Eurocopter agreement is part of the dynamic sought by the Government, ie a context of economic recovery enabling active restructuring of work organisation, and a trade-off of overall working time - quite limited in this case - against increased flexibility, mainly benefiting the company. It remains now for the company to adjust its weekly workforce to meet its requirements in order to optimise the increased profits that can be expected from such an agreement, combined as it is with a healthy order book. (Jean-Marie Pernot, Ires)