Government considers endorsement of UNEDIC agreement

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A draft agreement reforming France's UNEDIC unemployment insurance was reached in June 2000 by employers' organisations and the CFDT and CFTC trade union confederations (but not CFE-CGC, CGT and CGT-FO). However, it did not prove possible to implement the agreement by 1 July 2000, the expiry date of the existing UNEDIC accord. Therefore, the government passed a decree extending, indefinitely, the existing agreement. The government has thus gained extra time in which to consider carefully whether it should endorse the new agreement in the current sensitive political climate.

After six months of hard negotiations, a draft agreement to replace the current agreement on the UNEDIC unemployment insurance system, due to expire on 30 June 2000, was signed on 14 June 2000 (FR0006171F). It was officially endorsed by the employers' organisations but by only two of the five representative trade union confederations, CFDT and CFTC, with CFE-CGC, CGT and CGT-FO refusing to sign a draft agreement that they consider unacceptable. Their refusal is based on the following objections:

• the compulsory nature of the employment action plan (Plan d'aide au retour à l'emploi, PARE) which forms the centrepiece of the proposed new unemployment benefit system;

• the system of sanctions to be imposed on those unemployed people not complying with the terms of the PARE. These penalties will be severe. For the first offer of employment turned down, job-seekers will receive a letter of warning. If they refuse a second offer, their unemployment benefits will be cut by 20%. Where a third and fourth offer of employment are rejected, benefits will be suspended and stopped respectively; and

• those long-term unemployed people not covered by the unemployment insurance system are not eligible for the PARE.

The signatories to the 14 June draft unemployment insurance agreement were able formally to draw up an official version of the agreement only in late June. This allowed very little time to meet the implementation deadline (1 July 2000, the expiry date of the existing agreement), since the agreement could come into force only upon ministerial approval. Therefore, Martine Aubry, Minister for Employment and Solidarity was keen to allow herself extra time to consider whether she should endorse an agreement that has given rise to much controversy within the majority parties in parliament as well as within the government itself.

In an attempt to stave off a legal vacuum and secure benefits for unemployed people, Ms Aubry drew up a decree, which appeared in the Official Gazette (Journal Officiel) on 1 July, extending the current collective agreement indefinitely. This reflects the current tension between the MEDEF employers' confederation and the government, which rejects the perceived "diktats" of an employers' association which wants the collective bargaining process to prevail over the law. For the draft agreement reached to become operational, some points of the Labour Code will have to be amended by parliamentary vote. This explains why it has not been possible to stick to the original implementation schedule.

However, the problem is not merely a legal one. Indeed, the government's decision is also the result of sensitive political considerations. Those unions which rejected the new agreement have lobbied the minister not to approve it, in an attempt to force further negotiations in early September. As for the signatories to the agreement, they have demanded that the Minister endorse it in its entirety, "provided the required statutory and regulatory amendments are made".

Ms Aubry, appears, in light of the fact that her own political views on this sensitive matter coincide more with the CFE-CGC, CGT and CGT-FO stance, to have come down on the side of the opponents of the agreement.