EDF-GDF agreement on part-time work annulled by the courts

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In September 1998, the Paris Court of Appeal annulled a collective agreement signed at the electricity and gas utilities, EDF-GDF in January 1997. This agreement, whose provisions included the widespread introduction of a 32-hour part-time working week in order to promote employment, had been opposed by two non-signatory unions, CGT and CGT-FO. The Court's ruling may have implications beyond the nationalised industries.

On 31 January 1997, an innovative three-year collective agreement entitled "Expansion, public service, working time, jobs for young people: 15,000 new jobs, a project for everyone" (Développement, service public, temps de travail, emplois des jeunes : 15 000 embauches, un projet pour tous) was signed at electricity and gas utility companies, Electricité de France (EDF) and Gaz de France (GDF) (FR9702105F). On the trade union side, the deal was signed by the sectoral federations of the CFDT, CFTC and CFE-CGC confederations, but not the relevant CGT and CGT-FO federations. The agreement was a novelty in these state-owned companies, whose staff have a specific, unique legal statute. To compensate for reductions in the number of jobs and encourage recruitment, the framework agreement enabled staff at the two companies to opt to work part time - 32 hours per week, rather than the normal 38 - for a minimum three-year period, while receiving bonuses that reduced the effects on their wages. Moreover, the agreement stipulated that 75% of new staff would be hired on part-time contracts.

The agreement has since led to 184 local agreements affecting more than 21,000 EDF and GDF employees. At the end of September 1998, more than 19,000 staff were working on a reduced time basis in the two companies, compared with 3,900 in January 1997 (out of a total of 140,000 employees).

Court of Appeal ruling

This deal ran into stiff opposition from the CGT (which enjoys an absolute majority in workplace representative elections in the two companies) and the CGT-FO. These two union organisations made use of their right of opposition and challenged the agreement unsuccessfully before the Lower Court (Tribunal de grande instance) in Paris, in July 1997. They then appealed against the court's ruling.

On 22 September 1998, the Paris Court of Appeal (Cour d'appel) annulled the EDF-GDF agreement. In the preamble to its judgment, the Court highlighted the signatories' willingness "to modify working time by extending part-time working, with staff being encouraged principally by the granting of a bonus to commit themselves irrevocably to reduce their working time to part-time work of 32 hours per week". Furthermore, emphasising "the de facto substitution of a statutory working week of 32 hours for the current 38-hour one within EDF-GDF", the Court stated that the agreement "can be read not as a complement to the current [staff] statute, but as the establishment of a new statute, provisional for three years, comprising a new statutory working week, a new bonus and new rules for retirement and time savings accounts".

Among the "stipulations contrary to the status" contained in the agreement, the ruling cites "systematic recruitment on the basis of a 32-hour week, contrary to article 15 of the statute" and "aid in reducing working hours (...) contrary to the statute, and especially to article 28". The ruling also states that the agreement "creates discrimination in remuneration between staff carrying out the same work according to whether they are employed full time or part time".

Reactions

After the agreement had been struck down by the Court, EDF-GDF management announced "the temporary suspension of any more job creation, moves to reduced-time working and early retirement (...) pending a more in-depth study of the consequences of the Court of Appeal ruling". EDF-GDF stated that this annulment had occurred at a time when the agreement "was beginning to pay dividends" (with 700 new jobs created in September).

Although the CGT greeted the Court of Appeal ruling as "good news", the CFDT strongly condemned "the worst possible policy from the point of view of job creation" carried out, in its opinion, by the CGT and CGT-FO. The CFDT regretted the Court ruling, which in its eyes had taken a "fundamentalist" view of the EDG-GDF employees' statute. For the CFDT, this statute should be developed in such a way as to promote job creation and work-sharing. The CFE-CGC blamed "the systematic opposition" of the two unions, which, "under an ideological pretext, creates serious consequences that the CGT and the CGT-FO would have difficulty dealing with".

Commentary

This Paris Court of Appeal ruling will have serious consequences within EDF and GDF, as many local agreements had been signed, and are now suspended, without the fate of those affected yet having been determined.

However, in its reasoning, the Court also went well beyond nationalised companies. Stating that assistance in reducing working time is discriminatory, its ruling has broader consequences, particularly for private companies, which are now either partly or totally compensating a shift to a 35-hour week by a section of their staff, without allowing any of their part-time staff, newly recruited workers or those not affected by the reduction in working time to benefit in any such way (FR9806113F). If the Court considers that a collective agreement does not comply with the statute of a state-owned company, could it be considered that an agreement laying down an exception not provided for by law could be annulled by the courts? Certain measures in the Labour Code allow companies to gain an exemption, by collective agreement, from legislation and decrees. This exemption is possible only if a law allows it and within certain parameters, also provided for by legislation. If the exemptions are not authorised, can a union in the private sector oppose an agreement it considers illegal?

This matter has never been debated by France's supreme appeal court, the Cour de cassation (see Liaisons Sociales, No. 599, 9 October 1998). From this viewpoint, has the Court of Appeal just taken the lid off a serious problem? (Alexandre Bilous, IRES)