Government proposes working time and pay reforms

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In December 2004, the French Prime Minister, Jean-Pierre Raffarin, unveiled his government's policies for the coming period. These include measures to increase employment, amend some working time rules, harmonise minimum wage rates, and reform employee savings and share-ownership.

As announced on 19 September, Prime Minister Jean-Pierre Raffarin unveiled an initiative entitled 'Contract France 2005' (Contrat France 2005) on 9 December 2004. It is a set of 28 policies, based on the principle of 'individual freedom of choice', whose aim is 'to enable France to make a successful start to the second half of the five-year mandate' of President Jacques Chirac. This announcement came as the macroeconomic indicators (a rise of 0.1% in GDP and a 0.1% increase in salaried employment in the third quarter of 2004) are far from heralding a strong and lasting return to growth.

The Prime Minister reasserted his wish to make advances on the following three major issues.

• Employment. The government’s ambition is to get more people integrated into the workforce and to boost both the setting up of businesses and job creation. The Prime Minister is therefore planning a reform of the 35-hour working week legislation (FR9806113F and FR0001137F). While maintaining current statutory working time, provisions enabling an increase in the statutory overtime quota (to be raised to 220 hours per year, compared with the current 180) and an overhaul of the time savings account (compte épargne temps, CET) scheme are to be tabled in parliament (FR0408108F). The government is also set to simplify labour law and reform public employment services while seeking to ensure that there will be more jobs in the personal and domestic services sector, guarantee the success of the new 'future contracts' (contrats d’avenir) introduced by the recent 'Borloo law' on social cohesion (FR0409104F) and promote the employment of older workers.

• Purchasing power and daily life. Measures in this area are based on policies already initiated over the past few months, such as returning to a single rate of the statutory national minimum wage (Salaire minimum interprofessionnel de croissance, SMIC) (FR0408102N), by raising the various existing rates - which arose from the staged introduction of the statutory 35-hour week (FR0208102F) - to that of the current highest, and adjusting job classifications and pay scales. The extension of employee savings (FR0405103F) and employee share-owning is also advocated, as well as a reform of the state with a simultaneous cut in tax contributions. Moreover, the issue of consumer protection is addressed, as well as finding practical solutions to housing needs.

• The information and knowledge-based society. The basis of work in this area is reform of the schools system and research. For the Prime Minister, this means making school fairer and more efficient by setting up a Higher Council for Education (Haut conseil de l’éducation). It also means forging closer links between schools and businesses. Mr Raffarin considers that this requires policies reorganising vocational training and foreign language teaching, and guaranteeing the more effective operation of the public education system.

Among employers’ associations, the Prime Minister’s proposals have received a warm welcome, alongside pressure for the plans to be carried out effectively. The General Confederation of Small and Medium-sized Enterprises (Confédération générale des petites et moyennes entreprises, CGPME) likes the fact that the flexibility measures are based on freedom of choice, and that some of the planned policies are aimed at its members. The Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) deems the measures appropriate, as they are similar to its own 'industrial relations overhaul' project of several years ago (FR9912122F), which aimed to stimulate social dialogue in companies. The Craftwork Employers' Association (Union professionnelle artisanale, UPA) intends to seize this opportunity to launch negotiations on various issues at sector level.

Among the trade unions, the reception for the 'Contract France 2005' was very different. The French Democratic Confederation of labour (Confédération française démocratique du travail, CFDT) is profoundly in disagreement with the plans om working time. The French Christian Workers’ Confederation, (Confédération française des travailleurs chrétiens, CFTC) argues that the proposals do not address what is actually at stake, as does 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), which states that the Prime Minister’s project is 'irrelevant' because it is based solely on employers’ arguments and advocates discrimination against managerial staff on the issue of overtime. The General Confederation of Labour (Confédération générale du travail, CGT) and the General Confederation of Labour-Force ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO) have also dismissed the plan’s 'free market logic' based on the flexibility of working time. They are critical of the approach to purchasing power, arguing that the proposed measures will not help improve it. The general secretaries of these two union confederations have stated individually that they have not ruled out responding with a mobilisation of members. The National Federation of Independent Unions (Union nationale des syndicats autonomes, UNSA) has also expressed its disapproval of the government plans.