Agreement in metalworking: for or against the 35-hour working week?

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In July 1998, employers and three trade unions in France's metalworking sector signed an agreement on the implementation of the new law on the 35-hour working week. This agreement - which was not signed by CGT and CFDT, the strongest unions in the industry - provides for increases in permissible overtime, greater use of annualised hours, and more working time flexibility. The Government has downplayed the importance of the agreement, and plans to give greater importance to company than to sectoral agreements in the evaluation exercise which will be used as a basis for a second law on working time, in 1999.

On 28 July 1998, after four negotiating meetings, the Union of Metallurgy and Mining Industries (Union des industries métallurgiques et minières, UIMM) signed an agreement with three trade unions - CGT-FO, CFTC and CFE-CGC- on the implementation in the metalworking industry of the June 1998 law on the 35-hour working week (FR9806113F). This agreement provides for an increase in allowable overtime, greater use of annualised hours (ie calculation over a 12-month period), and more flexibility in working time schedules. The two strongest unions in metalworking in terms of votes cast in representative elections, CGT and CFDT, did not sign the deal and were critical of it.

UIMM, like the CNPF employers' confederation within which it is the largest and most active federation, has never made a secret of its opposition to the 35-hour week law. However, rather than isolating itself in a defensive posture, UIMM acknowledged the existence of the new legislation and suggested to the unions negotiations on "modernising the national collective agreements applicable to metalworking in order to adapt them to the new context created by the coming reduction of the statutory working week to 35 hours". If no agreement were reached, UIMM indicated that it would denounce (terminate) the industry-wide collective agreements of which it is a signatory ("if our proposals are rejected, collective commitments will be jeopardised and consequently, there will be a serious risk of tearing up the old agreements and starting from scratch" - UIMM Actualités, June 1998). Employers in the banking industry (FR9802194F), high-street department stores (FR9804105N) and the sugar industry had already taken this path.

The content of the agreement

The metalworking agreement starts by recognising the existence of the new law. Like this legislation, it will be applicable from 2000 for companies employing more than 20 people, and 2002 for the rest of them. Its main provisions are as follows.

• Annual working hours will henceforth include the 11 public holidays (not counting 1 May) and will total 1,645 hours. However, the agreement stipulates that this rule will be applied without overturning a 1970 agreement guaranteeing that public holidays must be observed in the metalworking industry. According to the agreement's signatories, including UIMM, nothing has thus changed in regard to public holidays. This opinion is not shared by CFDT and CGT, which feel that this wording will result in the paid unworked hours on bank holidays being taken into account in the calculation of the overall reduction of hours over the year.

• The amount of allowable overtime in metalworking has been increased from the previous 94 hours per employee per year. The law on the 35-hour week limits it to 130 hours per year, except where collective agreements provide otherwise. The figure in metalworking will now be raised to 180 hours (or 150 hours for those whose working hours are calculated over a 12-month period). Moreover, this quota may be raised by 25 hours per employee per year for two years after the agreement has come into effect.

• In practical terms, the cut in the number of hours worked will be brought about by a reduction of the working week or by the granting of extra days off for employees whose working hours are annualised. The latter can choose exactly when to take at least 25% of these days off.

• The annualisation of working hours has been made easier: companies will not need to conclude an agreement with the unions to adopt this system. They will have to open negotiations but if they fail, simply consulting the workforce will be enough.

• As part of the process of calculation of working time over a 12-month period, daily and weekly working hours will be variable. The maximum working day will last up to 10 hours, while the maximum working week cannot exceed 48 hours, with an average of 42 hours over a period of 12 consecutive weeks, unless there is an exemption resulting from a company agreement. This upper limit may be raised to an average of 44 hours over a period of 12 consecutive weeks for workers installing equipment on building sites, as well as for maintenance and after-sales staff.

• "Flat-rate" remuneration. This is a significant measure, as it extends the system that currently applies to company managers' to certain other employees. Three types of flat-rate payments are provided for: - a flat rate "based on a monthly work schedule". In this case, overtime payments can be included in monthly pay in the form of a flat-rate payment. The agreement does not give any further details on those employees potentially affected; - a flat rate corresponding to a 12-month work schedule: This can be applied to engineers, managerial staff and certain high-level supervisory staff. In this case, the agreement stresses that, "the average weekly volume of work cannot exceed" the 35-hour working week, increased by a maximum of 20% (making a total of 42 hours). Extra pay for overtime will be between 15% and 30%, depending on the case; and - a "task-based" flat rate, "not linked to any set time period", applicable to engineers, managerial staff and top-level supervisory staff, whose working hours will not be "calculated" and whose pay will not be lower than 145% of the minimum salary stipulated in collective agreements pertaining to the category of employee in question.

• Finally, the last clause requests central trade union confederations and employers' associations to revamp and broaden an intersectoral "early retirement for new jobs" agreement signed in 1995 within the institutions managing unemployment benefit. It enables employees who began to work at 14 or 15, and who have worked for a period of 40 years, to take early retirement provided that the company takes on a young employee to replace them.

Reactions of employers and unions

UIMM and the signatory trade unions gave a positive response to the new agreement:

• UIMM is very pleased with the deal. In the opinion of its vice-president and head of the employers' delegation, Denis Gautier-Sauvagnac, it is "a good agreement showing respect for the law, people, companies and thus for job creation". He felt that "collective bargaining was threatened, existing collective agreements could have been denounced, and we would have been back to the drawing board;"

• CGT-FO felt that "collective agreements, which were at one stage under threat, are now saved". According to Michel Huc, secretary of the metalworking federation, "this agreement will not bring down wages. On the contrary, negotiations on minimum wages will start up again in the coming months;"

• CFE-CGC considered that the agreement "has filled a legal void" for engineers and managerial staff "which was allowing all kinds of flexible working practices to be used"; and

• in the opinion of CFTC, it is a "good agreement", in as far as "it takes account of the Aubry law [the 35-hour week law] and thus enables a response to be given to concern over the reduction of working hours".

Those unions that did not sign the agreement have a totally opposite view of it:

• "this is Black Tuesday for the reduction of working time, job creation and the guarantees afforded by collective agreements" stated CFDT, in whose opinion this agreement "evades the spirit and objective of the Aubry law, and will create no jobs, as it does not actually reduce the length of the working time". The union emphasised that as part of "an agreement on the 35-hour working week, employees may work more than 39 hours through the increase in the amount of allowable overtime;"

• CGT has also criticised the agreement. In the view of this union, "the really urgent requirement is for as many company-level agreements as possible to be reached on job creation". Both CGT and CFDT have also asked the Ministry of Employment and Solidarity not to go ahead with "the extension" of the agreement (to be applicable to all companies operating within a field of activity, an agreement signed by the social partners must be "extended" by the Ministry, after consulting the National Commission for Collective Bargaining).

The stance adopted by the Ministry of Employment and Solidarity

The Minister of Employment and Solidarity, Martine Aubry, has downplayed the importance of the metalworking agreement. In a press conference on 29 July, she said she was very surprised at the reactions: "What's all the fuss? ... Far too much significance has been given to this agreement, because it is not immediately applicable and thus has no effect on employees". She feels that it is "a 'theoretical' agreement, a kind of non-agreement". Regarding the extension procedure, the Minister will not rush into anything: "The agreement will be applicable only in 2000. So I've got time to think about it, and I'll certainly wait until after the second law has been passed before I give my answer".

It is this second law on the length of the working week (to be passed at the end of 1999, establishing the detailed ways in which the statutory reduction of the working week to 35 hours will be achieved) which seems to be decisive, both for the UIMM and the government.

In the Minister's opinion, if employers in the metalworking industry were counting on the new agreement to influence the second law in 1999, they will be disappointed, because "it is the agreements signed by companies between now and then that will be taken into consideration". Martine Aubry thus preferred to stress the success achieved by the "incentive" law on the 35-hour week at company level (80 agreements had been signed in one month, 13 of which were in metalworking) than to dwell on this national industry-wide agreement.

Commentary

The agreement signed on 28 July marks a further stage in the stand-off between employers and government over the question of the reduction of working time. This dispute has been going on several levels.

• The role of bargaining in the implementation of the new law. The UIMM took the Government at its word when the latter called on industries and companies to undertake negotiations that would enable the law to be based, as far as possible, on the everyday realities of work. However, the result was not that expected by the authorities.

• The role of sectors and companies. A strange reversal occurred during the metalworking negotiations. After the conference on employment, pay and the reduction of working time, held on 10 October 1997 (FR9710169F), the CNPF and the UIMM were considering a freeze of sector-level negotiations, leaving a degree of freedom to companies so that, if they wished, they could conduct negotiations on working time. The 28 July agreement now seeks to "provide a framework for" company bargaining, and find solutions for employers which reject the reduction of working time. For their part, the authorities, which have always perceived sector-level agreements as vital in producing standards covering the whole of a field of activity, now appear to be favouring company agreements which challenge the wishes of employers' leaders at sector level.

• The drafting of the future law. This is the crucial issue in this struggle. The Government will insist on using the evaluation of company bargaining as the basis for its second piece of legislation on working time. The UIMM, together with the CNPF, wants to give an example to other industries in which negotiations have not yet begun, to generate power relations favourable to them on a national level, and be a factor in the terms of the 1999 legislation.

As for the reactions of employees and unions, whose viewpoints are far from homogeneous, there seems to be a clear line dividing those who are arguing for a reduction of working time, in order to create jobs, on one side, and on the other, those who feel it is necessary to increase spending power, including overtime as a source of this, to stimulate growth in the economy, and thus job creation. (Alexandre Bilous, IRES)