Initial debates held in run-up to second 35-hour week law

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In March 1999, the French employers' organisation, MEDEF, took the initiative of putting forward its proposals for the drafting of the second law on the 35-hour week, following 1998's groundbreaking "Aubry law". The reactions of the trade unions and the government to MEDEF's ideas have been hostile, but the debate on the relationship between the second law - due later in 1999 - and the renewal of sector-level collective bargaining is now under way.

The law which provides for the statutory length of the working week to be reduced to 35 hours by the year 2000 for companies with more than 20 employees, and by 2001 for the rest, was passed on 13 June 1998 (FR9806113F). This piece of legislation - the "Aubry law" - was intended to provide guidelines and incentives, setting out the main principles and leaving it up to collective bargaining (at company and sectoral level) to experiment at grassroots level with the conditions of its implementation (FR9901151F). This first law is to be succeeded by a second one - taking account of the outcomes of bargaining and establishing the concrete ways in which the reduction in hours will be implemented - which should be passed before the end of 1999 and will be preceded by consultation with the social partners.

Provisional results

The most recent review published by the Ministry for Employment and Solidarity, on 31 March 1999, showed that 3,122 company agreements on working time reductions had been signed since the first 35-hour week law was passed. Of these, more than 45% were signed in companies with fewer than 20 employees and 43% in firms whose staff numbered between 20 and 200. The number of employees affected by these agreements was 922,396, and the number of jobs created exceeded 42,600. However, it should be pointed out that this overall calculation includes agreements not covered by the law:

• 196 companies did not want to receive the state subsidies for hours cuts combined with job creation/preservation, provided for by the 35-hour week law. These accounted for 203,269 employees and the creation of 6,284 jobs; and

• four state-run companies - including EDF-GDF (FR9902155N) and La Poste (FR9902158N) -signed agreements, but are not concerned by the law. These companies employ almost half of the employee affected by the reduction of working time (451,634) and more than 25% of the jobs created (13,270).

At sectoral level, negotiations had started and agreements on working time reductions had been signed in 56 industries as of early April 1999. Of these, 21 had been extended by the Ministry and are now applicable to the entire sector, whether or not employers and employees are members of the signatory organisations. However, very often these agreements will come into effect only when the second law has been promulgated.

In March 1999, at a time when many observers (see, for example, Le Monde of 13 April 1999) were questioning the chances of success of the processes put in train by the government, the employers' organisation, MEDEF (Mouvement des entreprises de France) publicised its proposals for the second law.

The MEDEF proposals

On 15 March, MEDEF's executive committee approved six proposals"based on social dialogue", in the run-up to the second Aubry law on the 35-hour week.

1. A one-year extension of the period set aside for negotiations, and modification of the thresholds. MEDEF president Ernest-Antoine Seillière, wants the period open for negotiations over 35-hour week agreements to be extended for 12 months after the new law has been passed, and has asked lawmakers not to stop "the social dialogue", which "has proved its worth". Similarly, he has expressed the wish for the workforce-size threshold for the application of the 35-hour law to companies to be set at 50 for small businesses (as opposed to the 20 currently in the law). So in MEDEF's view, the 35-hour week should be applicable from 1 January 2001 for companies with more than 50 employees, and from 1 January 2003 for larger firms.

2. Validation of the social partners' activity. In order to "take account of the characteristics specific to each sector and each company", lawmakers are invited to "allow the application of all the provisions of the agreements reached at industry and company level with no conditions attached". Similarly, the social partners should be able to set the rules and methods for reorganising working time themselves, limited solely by existing maximum working time limits.

3. Minimum statutory framework and increased overtime limits. "For companies which will not be covered by a sectoral or company agreement, the legislative measures must be reduced to a realistic framework, allowing them the maximum space for manoeuvre." Thus, MEDEF is asking for a legislative framework providing for an annual calculation of statutory working time of 1,645 hours, corresponding to an average of 35 hours per week over the year. This system, already provided for in the metalworking sector agreement on working time reduction (FR9808129F) includes only the statutory obligatory holidays (five weeks' paid holiday and 1 May) in the calculation. The legislative framework should also provide for an annual quota of 188 hours' overtime (as opposed to the 130 set out in the 1998 law), enabling an actual working week of 39 hours to be maintained, without the obligation to give workers compensatory time off for the additional hours worked. The proposed overtime pay premium is 5% for hours worked between 35 and 39 hours per week (and 25% for those worked above 39 hours).

4. Specific provisions for certain employees. MEDEF wants it to be possible for the employment contracts of some employees to exclude them from working time rules, accompanied by "appropriate guarantees". These are staff who "work longer hours on average" than the general timetable "due to the duties they perform" (such as people in charge of a factory or office, general managers, or people who work directly with the managers of small and medium-sized businesses). Also affected would be those whose working time is "impossible to measure or keep in check due to a high degree of independence in the organisation of their work" (such as researchers, managers, and travelling sales representatives) and those jobs in which intellectual activity cannot be reduced to working time (such as designers).

5. A single SMIC. MEDEF wants a single rate of the SMIC statutory minimum wage to be maintained, set at the hourly rate in effect when the new 35-hour week becomes mandatory (there have been suggestions of a dual SMIC, given that the monthly SMIC rate is currently calculated on the basis of a 39-hour week - FR9901151F). At the same time, the government should "guarantee the income of the least-qualified employees working full time". To accomplish this, the method advocated is to lower the social security contributions of the employees concerned to guarantee an annual income equal to the annual level of the full-time SMIC, after social security deductions, prior to the reduction of working time. However, MEDEF is opposed to an increase in employers' contributions, any challenge to the reduced level of social security contributions for people on low pay and the modification of the range of employers' contributions.

6. Part-time employees. MEDEF does not want to apply wage compensation arising from working time reductions automatically to part-time staff whose working hours will not be reduced.

Union reactions

Trade unions have taken a variety of positions on MEDEF's proposals and on the forthcoming second law on the 35-hour week:

• for CGT, the second law on the 35-hour week "must completely obstruct the objectives" of employers. "Unsurprisingly", stated Maryse Dumas, CGT confederal secretary, "MEDEF is increasing the pressure against the reduction of working hours, and against employment ... This is no basis for negotiations, it is a programme of aggression against employment and employees' rights" ... "this attitude shows that nothing good can be expected from the major employers' organisations";

• Nicole Notat, general secretary of CFDT, said in an interview published in La Croix (on 16 March), that the second law on the 35-hour week should "maintain and increase the momentum for negotiation and the spirit of the first law ... To do that, an articulation must be found between the implementation of the 35-hour statutory working week and the actual reduction of working time ... Without that, one statutory hour less will become one more hour's overtime, or an increase in employees' workload." For CFDT, "there is no question that the second law should allow an increase in the amount of automatically authorised overtime";

• CGT-FO stated that for employers, "the main issue is to increase flexibility without increasing labour costs". CGT-FO says that "overtime should be paid at 125% of the usual rate from the 36th hour, and 150% from the 43rd ... Part of this overtime payment could be transferred to the pensions reserve funds." According to FO, the maximum working week of 48 hours should also be reduced;

• CFTC stated that unlike MEDEF, it was "not asking for further postponement" of the law on the 35-hour week coming into force. However, it also felt that this delay could be considered "if it enabled intersectoral negotiations to be opened". The union considered that "any changes should be arrived at by company or sectoral agreements and should not be available to companies which have not negotiated these modifications". It also labelled as "very unwelcome" any increase in the permitted quota of overtime, given that such an increase can already be decided upon by collective agreement; and

• CFE-CGC greeted "MEDEF's progress, which demonstrates a certain interest in negotiations on the 35-hour week between the social partners". However, the union considered that these negotiations "should not lead to postponements of commitments already undertaken" regarding the implementation of the 35-hour week. "CFE-CGC has already sent Martine Aubry a proposal which does not aim to increase the statutory quota of overtime, as MEDEF's does, but to reduce it to 110 hours per employee, or even 80 hours for companies in which working time is annualised", emphasised Jean-Louis Walter, national secretary responsible for employment. Moreover, CFE-CGC declared that "working hours for managerial and professional staff must be redefined in the second Aubry law."

The government

Martine Aubry, Minister for Employment and Solidarity, has bluntly turned down MEDEF's proposals. She reaffirmed that the 35-hour week would come into effect "on 1 January 2000 for companies with more than 20 employees and on 1 January 2002 for the others". The government "is keen to keep on course and retain the planned timetable", and it will use mainly the content of the company agreements hitherto reached as the basis for drafting the second law on the 35-hour week, setting out the specific ways in which the reduction of working time will be implemented, she told parliament. Ms Aubry welcomed "the fact that MEDEF is part of the huge programme of negotiations entailed by the 35-hour week", but was "very surprised that it appeared to gloss over the more than 2,600 in-house agreements, and referred only to sectoral agreements ... Preparing the second law, involves first and foremost looking very practically at the contribution of company agreements" which "are the most palpable, and show the reality of job creation linked to the 35-hour week". The second law, which "will be made public before the summer, after a wide-ranging consultation process", will be "balanced, but will enable an actual reduction in working time to be implemented".

Nevertheless, in a later statement, the Minister declared that the coming into effect of the statutory 35-hour working week on 1 January 2000 "does not mean that from then on there will be nothing to negotiate". She said that the second law on the 35-hour week, planned before the end of the year, "will set out those provisions which cannot be modified by bargaining, for example the amount of overtime admissible, the compensatory time off to which staff will be entitled and how it will be taxed". However, "a certain number of areas will be open to negotiation". The second law will also "simplify the regulations" on the duration of working time, with "safeguards". Ms Aubry judged that it was "far too soon" to say what elements of the second law would be the subject of trade-offs, as this decision should be based on the agreements already reached, a report on which would be published by the Minister "next month". She repeated that the agreement on the 35-hour week reached last summer in the metalworking industry is "the only one that does not comply with the spirit of the law", and "that in its current state, it will not be recognised". The other sectoral agreements, however, "will find themselves more or less in the second law, as they are in keeping with the first law"

Commentary

By taking its initiative in mid-March 1999, MEDEF sought to score a few points. While after the October 1997 tripartite conference on employment (FR9710169F), at which the 35-hour week law was announced, it refused to take part in negotiations, in order to avoid endorsing the government's initiative, it now presents itself as the champion of social dialogue, and states that it wants to preserve the space for negotiation which is currently available, contrary to the legislative initiatives that seek to set what it sees as too rigid a framework. At the same time, its proposals are based directly on the July 1998 agreement between the UIMM metalworking employers' association and a number of unions. UIMM has just published a report seeking to demonstrate that the 11 sectoral agreements on the 35-hour week which have been signed in industries with more than 100,000 employees, follow the logic that UIMM itself generated.

Although it has met with the opposition of unions and the employment Ministry, MEDEF's appeal may, in the weeks to come, find some response in the consultation meetings prior to the second law. Momentum does seem to have been generated in sectoral bargaining, a level at which widespread apathy had been the norm over the past few years. French trade unions are very attached to the growth of sectoral bargaining

It is likely that the deadlines for the new legislation will be kept, and that specific norms will establish both the amount of overtime authorised, and the status of the SMIC. Yet careful attention will be paid to the interplay of the promulgation of the law, and the continued overhaul of sectoral negotiations already underway. (Alexandre Bilous, Ires)