Implementing the 35-hour week legislation: the first six months

Banking sector agreement

Since the Ministry's review was published, an agreement was signed on 4 January 1999 in the vital banking sector, by the French Banks' Association (Association française de banques, AFB) and one trade union, SNB-CGC (Syndicat national des banques-Confédération générale des cadres). SNB-CGC, which won around 30% of the votes in the most recent representative elections, is affiliated to CFE-CGC, which represents managerial and professional staff.

According to this agreement, the overhaul and reduction of working time will assume the form of allocating extra days off, as part of the establishment of a system in which working time is annualised (calculated on a 12-month basis). The normal annual length of working time will be 1,610 hours (46 35-hour weeks). The main points of the agreement are as follows.

• Working time reduction at sector level. As of 1 January 2000, every bank, however many staff it employs, will have to grant employees a number of extra days off, set at sector level, to achieve an overall reduction of working time (""Réduction du temps de travail, RTT). The reduction, or RTT, set at sector level is as follows: nine working days to be chosen by the employee, plus 8 days chosen by the company among traditional holidays on annual set dates not coinciding with weekends. Out of these 17 days, 12 are counted in the RTT.

• Working time reduction at company level. Each bank will have to open its own negotiations before the end of June 1999, in order to apply the 35-hour week law beyond the mere implementation of sector-level RTT. A bank which, in addition to the sectoral RTT, reduces working hours to 35 per week as an annual average, will grant its employees the equivalent of 12 extra days of paid leave. All in all, a bank employee whose employer has reached such a complementary company agreement will have at least 55 days' holiday (including the 25 days statutory paid leave and the 1 May bank holiday).

• The"reference"number of hours of overtime has been set at 120 per year for the years 2000 and 2001. For those two years, it can be increased by 40 hours (in 2000), then 30 hours (in 2001). By 2002, the reference amount itself will be lowered to 110 hours, with the possibility of increasing it by 30 hours, exclusively by company agreement (or, if there are no union representatives, with the approval of the works council).

• Working time for managerial and professional staff. The agreement stipulates the categories of employees (managerial and professional staff in head-office and line management and in trading and/or investment banking) for which the regulations governing working time will be specially adapted. Staff in the head office and those in trading or investment banking have a special status giving them three specific extra days off, making 20 days off in total, on top of the statutory holidays.

On 8 January, the four unions which did not sign the banking "35-hour week" agreement (CFDT, FO, CGT and CFTC) decided to mount a legal bid in the courts and exercise their right of objection to the deal. According to CFDT, the 35-hour week agreement "can be seen as an amendment to the sector-level collective agreement that was terminated by employers in February 1998 [FR9802194F], but will remain in place until 1 January 2000. We are thus entitled to use our right of objection". However, SNB-CGC and AFB, which requested, on 8 January, that the Ministry of Employment extend the agreement to cover the whole sector, say that "there is no objection possible at sector level". The AFB's director of social affairs stated that "the [previous] collective agreement ceased to exist on 31 December 1998, so there cannot be any opposition to staff benefiting from advantages available on top of those provided for in the Labour Code".

Moreover, in a letter to the Minister of Employment, the four unions which did not sign the agreement "challenge the right of SNB-CGC, an organisation affiliated to CFE-CGC, to sign an agreement affecting all the employees in the sector, because it is restricted to one category of staff". They also asked Martine Aubry to "consider this agreement as null and void", since it is allegedly "contrary to the objective of the law of 13 June 1998, namely to foster job creation". The unions claim that the banking deal "is obviously bound to put pressure on the content of the second law", due in 1999, which will establish the ways in which the 35-hour working week will be applied, particularly in terms of "the way overtime will be calculated and paid". The non-signatory unions also asked their company-level organisations "to refuse to participate in any meetings involving negotiations or reflection on the reduction of working time while the result of the exercise of the right of objection is pending."

Negotiations underway in large companies

Some major public sector enterprises are now involved in negotiations on the 35-hour working week. In early January 1999, some - like Air France and the EDF-GDF electricity and gas utility - were about to sign an agreement.

Air France

At Air France, on 9 January, after two days of negotiations, management and unions representing ground staff unions drew up an overall draft agreement on working time reduction, job creation and pay, covering a period of several years.

Unions appear divided over whether they will finally sign up. FO and CFDT gave the draft agreement the green light, and were due to make their final decision known on 13 January. CFE-CGC and CFTC also seemed willing to sign up. CGT, on the other hand, stated that it was "unfavourable", while acknowledging the plan's positive points in terms of "job creation, the development of supervisory and managerial staff, and progressive retirement from the age of 55".

Once the three-year framework agreement is signed, the practical ways in which working time will be reduced will be negotiated in each of the company's 26 sites. Decentralised agreements should be reached before 15 June 1999, so that they can be implemented by 1 November at the latest. This framework agreement, in line with the Aubry law, provides for the creation of 4,000 jobs over three years and the recruitment of a total of 5,000 new staff. "This is the equivalent of 15% of existing jobs, a higher level than the expectations of the Aubry law, even if it reflects both reduced working hours and growth," declared CFDT. The agreement also provides for various forms of annualised working time, and for wage restraint from 2000.

EDF-GDF

At EDF-GDF, management and unions resumed negotiations on the 35-hour week on 11 January 1999, aiming to reach an agreement before the electricity market is opened to competition in February. One of the draft agreement's proposals is that the 142,000 EDF-GDF employees may work a 35-hour week without a drop in purchasing power. There is also an option to work a 32-hour week with pay for 37 hours. These measures are coupled with the statutory recruitment of 18,000 to 20,000 young people over three years. There would be a 20% quota reserved for young people from disadvantaged backgrounds, or with no qualifications. The company will train them, which could lead to qualifications equivalent to a technical school baccalaureate. The draft agreement also involves the retirement of 12,000 employees, plus incentives to depart for 3,000 others. In all, subtracting the losses from the gains, EDF-GDF ought to create between 3,000 and 5,000 jobs.

On 12 January, CGT announced its intention to sign this agreement (according to Le Monde, 13 January 1999), though it had, along with CGT-FO, denounced an earlier agreement introducing a part-time, 32-hour week in exchange for the creation of new jobs (FR9810201F).

Other companies

Other public sector enterprises - SNCF (railways), la Poste (postal services) and France Télécom- were, in mid-January, at the negotiation stage, but unlike Air France and EDF-GDF, they seemed to be heading towards "defensive" agreements and the reduction of planned job cuts.

The large private sector corporations have not, as a rule, rushed into using the Aubry law nor tried to take advantage of the opportunities it might generate. Often unenthusiastic about taking up the government's plan to reduce statutory working time, they have adopted a "wait-and-see" attitude, observing sector-level negotiations when they did not themselves set them in motion. However, companies in the motor manufacturing sector, which have long been experiencing a severe demographic "age pyramid" problem (ie too many older workers and too few younger ones), wish to avail themselves of state subsidies for reducing working time, to fund early retirement schemes.

Commentary

The law of 13 June 1998 was labelled as an "incentive-creating law". As mentioned above, it will be followed by another, which should be passed in autumn 1999, and which will establish legislative norms for the reduction of statutory weekly working hours to 35.

The government has announced its willingness to take account of the practical experiments underway since the first law was passed. However, the balance sheet of the negotiations, in terms of jobs created, is so far rather negligible. Moreover - after the experience of the Robien law, which also sought to encourage working time reduction and reorganisation to create or save jobs (FR9705146F) - while the government banked on a growth in company-level bargaining, the real growth has come at sector level, where some agreements, in the employment minister's terms, "have evaded the spirit of the law".

What stands out from the review of the June-December 1998 period is the extreme diversity of the solutions adopted by negotiators.

On 11 January 1999, Martine Aubry announced a timetable for the forthcoming discussions and decision-making on the second working time law. The consultation with the social partners will begin in late spring. After the bill has gone before the Conseil d'État- whose role is, in particular, to examine the legal validity of government proposals - the bill should be adopted in cabinet in July. It will then be put before parliament before the start of the budget debate, and should be passed before the end of the year.

Many questions not broached in the first law are still pending:

• the issue of the national minimum wage (salaire minimum interprofessionnel de croissance, SMIC). The SMIC is currently calculated on an hourly basis, multiplied by 169 hours to obtain the amount payable monthly. If the statutory working week is reduced by four hours per week, what will the SMIC be worth, especially after the government announced that reducing the working week would not be accomplished by lowering wages, at least for those with a low income? What will happen to those employees taken on at the equivalent of the SMIC calculated on the basis of a 35-hour week? Are we going to witness the establishment of two parallel SMICs, one of which would be the equivalent of a guaranteed monthly income?

• overtime. How much will be allowed, and above all, what will be the level of the applicable pay premia?

• state subsidies. Minister Aubry has already explained that state subsidies could be made a permanent feature and ultimately become "structural" for companies that have signed 35-hour week agreements before the second law is passed. What will happen to the other companies, which will have to deal with the issue of reorganisation of work even if they have not started negotiations between the passage of the first and second laws?

• working time for managerial and professional staff. This matter seems more simple to resolve, in as far as the Ministry of Employment has already indicated that this category of employee, for whom daily or weekly working time has little relevance to their working lives, may get extra days of paid holiday.

(Alexandre Bilous, IRES)