Sectoral agreement terminated by banking employers

Download article in original language : FR9802194FFR.DOC

On 3 February 1998, France's AFB banking employers' organisation gave notice of termination of the collective agreement which has regulated the banking sector since 1947. Negotiations on updating this agreement have been unsuccessful, and representatives of employers and staff now have until 1 January 2000 to agree a new package.

Following the national tripartite conference on employment, pay and the reduction of working time held on 10 October 1997 (FR9710169F), at which the Government announced a bill to introduce the 35-hour working week, the French Banks' Association (Association Française des Banques, AFB), made plans for an immediate termination of the banking sector's collective agreement (FR9711176F). The agreement lays down specific rules on social protection, pay setting, job classification, working time and so on. For the representatives of the banking employers, it seems impossible to implement the move to a 35-hour limit on the working week in every company and every branch, while at the same time observing a number of constraints set out in the sectoral collective agreement. Following pressure from the Government, the AFB decided to open negotiations while not giving up its threat to terminate if the talks with the trade unions became deadlocked.

Disagreement on principle from the outset

On 22 October, the AFB thus suggested to banking unions "that talks should be opened on modernising the collective agreement", which should end successfully "before 1 January 2000, thus coinciding with the final deadline for implementing the changeover to a 35-hour week". The employers' criticisms of the existing collective agreement centre on the following points:

• the pay increase in real terms and the seniority bonus, which are fixed nationally at sector level for all affiliated companies; and

• a hierarchical job classification scheme which is identical across the entire sector, and no longer matches the duties actually performed.

The trade unions concerned - the CFDT (Confédération française et démocratique du travail), CGC (Confédération générale des cadres), FO (Force ouvrière), CGT (Confédération générale du travail) and CFTC (Confédération française des travailleurs chrétiens) - entered negotiations united behind one condition: that the modernisation of the collective agreement should be accompanied by simultaneous sectoral negotiations on the change to a 35-hour working week. The AFB itself foresaw discussions about the reduction of working hours via negotiations on "facilitating an overhaul of working hours, especially for managerial staff". However, it wanted to save the specific question of the 35-hour week for agreement at company level only. In spite of this divergence of views, five meetings took place.

Meetings and notice of termination

In early January 1998, after the first three meetings, disagreements between the AFB and the unions were very clear on the following points:

• the AFB wants pay policy decentralised, and the seniority bonus targeted on employees who have no other means of raising their salaries. Unions are firmly opposed to the employers' suggestions on pay, arguing that if they were applied, they would limit sector-level negotiations to establishing minimum wage levels for each grade of staff; and

• the employers' association wants to reform the hierarchical grading system by the adoption of a scheme containing grading criteria such as technical proficiency, responsibilities and decision-making autonomy. The unions called for the creation of "related job groups" (or "families" of jobs) which do not take these criteria into consideration.

Arguments over the reduction of working time exacerbated the tension underlying the debates. The first meetings enabled the union negotiating team to express its desire for a sector-level policy on the 35-hour week. The AFB emphasised the estimated costs involved in such centralisation of this measure (an 11% growth in employment costs) and the need to allow companies to carry out negotiations locally. Indeed, nearly 60% of bank branches employ fewer than 20 people, and will thus remain unaffected by the 35-hour week law until 2003. Moreover, the AFB stressed the fact that as employees in the banking sector have an extra five days' paid holiday, the real working week calculated over the entire year is currently 37 hours. Therefore, negotiations locally should be about reducing a 37-hour week, rather than a 39-hour week, to a 35-hour one.

At the end of the 19 January meeting, the AFB stated that it no longer wished to discuss the 35-hour week. A final meeting was held on 30 January. The unions asked for a few days' extension to the deadline, in order to consult their memberships: the five unions' mandate was to negotiate the modernisation of the collective agreement jointly with the changeover to a 35-hour week. The AFB refused to grant this extension. On 3 February, judging that it was no longer possible to carry out negotiations on the modernisation of the agreement, the AFB gave notice of termination of the existing agreement.

Reactions to the AFB's termination of the agreement

For Michel Freyche, the president of the AFB, the notice of termination of the agreement "is just a phase in the procedure for relaunching negotiation"s. The president of the National Council of French Employers (Conseil national du patronat français, CNPF) Ernest-Antoine Seillière, stated that "the AFB's decision expresses one of the early reactions" to the 35-hour week. Although the notice of termination of this agreement occurred at the same time as the law on the 35-hour was being debated in parliament, the AFB rejected the suggestion that its decision had been timed to coincide with events in parliament. The Minister of the Economy and Finance, Dominique Strauss-Kahn, deplored the decision, emphasising that "the ball" was "in the AFB's court", and that the organisation "should demonstrate that it really wanted dialogue between employers and unions by coming up with some new ideas".

The various unions expressed their anger on the issue. For Pierre Gendre (CGT-FO) it was a "casus belli". The CGT's representative, Jean-Dominique Simonpoli, feels that "the risk of a serious labour dispute" is now real, while Jean-Pierre Claudel of the CFDT thinks that "the AFB has chosen scare tactics."

Unions handed in notice of a national strike for the end of February, when the next meeting between unions and employers' representatives was due to take place. They then have 23 months to renegotiate the collective agreement with employers. Until then the existing agreement continues to apply in its entirety. If they do not arrive at an agreement, the provisions of the Labour Code will apply directly to the sector in 2000.

Commentary

The Government wanted the law on the 35-hour week to relaunch collective bargaining in France. On 11 February 1998, Ernest-Antoine Seillière of the CNPF said that "collective agreements are going to be terminated and renegotiated in many fields of employment", in exactly the same way as is happening in the banking sector. The reduction of working hours may lead to a new challenge to the sector as an appropriate level at which labour relations should be regulated.

Indeed, collective agreements at sector-level in France are often very poor in content, despite the large number of agreements reached. The wages negotiated are actually only minimum levels, of which many still fall below the statutory Minimum Wage (Guaranteed), the SMIC. Moreover, job classification s are old, and rarely match the duties now performed. The use of the classification schemes within companies, and the pay rates which correspond to the classifications they contain, is thus more or less detached from the reality of their original principles.

However, in the banking sector the content of the collective agreement is very rich in detail. The AFB stated that it would not seek to challenge certain established rights, like that of two consecutive days off work per week (Sunday included), or social protection (pension, maternity and sickness leave and benefit). The notice of termination of this agreement may however, make the employers' representatives intransigent on the three basic areas of disagreement with the unions: the system of wage calculation, the classification of jobs, and the length of the working week. (Renaud Damesin, IRES)