Debate continues over a new social constitution and the future of the parity principle

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Since France's MEDEF employers' confederation unveiled its proposals for a "new social constitution" in November 1999, a full-scale debate has been taking place between the social partners, political leaders and intellectuals over the place and role of the social partners in public life. Between late December 1999 and late January 2000, this debate was marked by three major events.

In November 1998, following disputes with the government about the proposed funding of the new statutory 35-hour week from social security funds, the executive council of the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) published a solemn declaration, tying its continued participation in jointly-managed social protection organisations (such as social security funds and the UNEDIC unemployment insurance fund) to new government concessions and a redefinition of the entire system of relations with the trade unions. MEDEF also called on the unions to work with it to redefine a "new social constitution" (constitution sociale), with the aim of ending "confusion as to the respective jurisdictions of the social partners and the government, in terms of both social protection and labour relations". MEDEF decried the "constant attempts by the law and the government to dominate the social partners", and called for a new social constitution accommodating both the "needs and aspirations of employees" and the "opportunities and restrictions faced by companies", based on "autonomous, decentralised dialogue between the social partners" (FR9912122F).

In December 1999 and January 2000, the debate instigated by MEDEF on the future of the "parity principle" (paritarisme- eg joint social partner management of various bodies) and the idea of a new social constitution was marked by three major events.

UNEDIC agreement

On 23 December 1999, at MEDEF headquarters, the trade unions and employers extended their agreement on UNEDIC "in extremis" until 30 June 2000. This agreement, which was due to expire on 31 December 1999, sets out the rules for unemployment insurance. They also extended schemes accompanying the UNEDIC agreement, in particular the the "job substitution allowance" (Allocation de remplacement pour l'emploi, ARPE), which enables employees to retire early on the condition that new workers are taken on to replace them (FR9901150F). If the various parties had failed to strike a deal, the government would have had to step in and extend the UNEDIC agreement by decree. In light of the current debate on redefining their roles, the unions and the employers' associations were keen to avoid this situation, which would have left the field free for the government to act. On the employers' side, the agreement was ratified by MEDEF, the General Confederation of Small and Medium Business (Confédération générale des petites et moyennes entreprises, CGPME) and the Craftwork Employers' Association (Union professionnelle artisanale, UPA). The CFDT, CFE-CGC, CFTC and CGT-FO union confederations also ratified the agreement, though CGT refused to sign.

This deal extends the agreement on UNEDIC and extends the ARPE scheme to those workers born in 1941, who have made 160 quarters of unemployment insurance contributions by early 2000. A commitment was made to restart negotiations, as early as February 2000, on a new UNEDIC agreement to overhaul the whole French unemployment insurance system.

President's address

The President of the Republic's address to the social partners on 6 January 2000 was the second major event in the current debate over the future of industrial relations in France. The President stated that "France must demonstrate its commitment to social dialogue by doing everything possible to facilitate the development and successful outcome of discussions". In order to do this, Jacques Chirac said that he was prepared to "accept the resulting changes that would have to be made, even if this means alteration of the constitution". The President's speech, which covered a new potential articulation of law with collective agreements, seemed to be a reflection of, or even implicit support for, MEDEF's "new social constitution". It also seemed to address the wish of some unions to reduce government influence over industrial relations. For example, the CFDT trade union confederation is proposing, in particular, that France adapt the European Union system of social policy formulation and implementation, based on the Maastricht Treaty European social policy Protocol and Agreement (now incorporated in the Treaty).

The President's speech prompted much reaction from the unions and employers' associations but also from political leaders and intellectuals. As for Prime Minister Lionel Jospin, on 23 January 2000, he stated that he was "opposed to the idea of special interests taking precedence over the law" and, to confirm that he did not agree with Mr Chirac's proposals, he added that he would "wage a political war against the idea in the name of an alternative republican vision".

MEDEF postpones withdrawal

On 18 January, during MEDEF's general assembly, the organisation announced that it would temporarily postpone the withdrawal of its delegates from the boards of social protection bodies. However, this decision was perhaps only a reprieve, since MEDEF could decide to pull out at any time in the period up until 31 December 2000. Until that deadline, the general assembly mandated MEDEF leaders to launch talks with the unions. MEDEF put forward 3 February 2000 as a date for a preliminary meeting with the unions. During the general assembly, MEDEF also set out a strict negotiation framework, detailing specific goals for the sickness, pensions and family allowance funds, among others. With regard to sickness insurance MEDEF is seeking "a new architecture ... so as to improve the cost/efficiency ratio". On pensions, MEDEF was mandated to negotiate a new "contribution-based pension system, which would enable workers to choose when to retire and give them access to an optional top-up capitalisation-based scheme, but at the same time avoid any increase in contributions".

MEDEF vowed to pull out of the unemployment insurance system even earlier, on 30 June 2000, if no agreement had been reached with the unions and other employers' associations represented on the UNEDIC administrative board. The negotiation framework set out by MEDEF is restrictive because MEDEF wants to develop a new agreement which "enforces strict cost-control compliance and reinforces incentives for effective job-seeking".

All the trade unions spoke out against what they saw as MEDEF's "strong-arm" or even "blackmail" tactics. However, while criticising MEDEF's tactics, CFDT, CFTC and CGT-FO have already stated that they will take part in the 3 February talks. CFE-CGC had not yet committed itself in late January and CGT wants all the unions to consult in order to lay the groundwork for a potential joint union stance. Ministry for Employment and Solidarity officials applauded "MEDEF's reasonable decision" not to pull out of social protection bodies immediately. The other employers' organisations - CGPME, the "young" managers' association (Centre des jeunes dirigeants, CJD), and the National Federation of Farmers' Unions (Fédération nationale des syndicats d'exploitants agricoles, FNSEA) - welcomed MEDEF's resolve to "overhaul the social dialogue". The only dissenting employers' association was UPA, which was sorry to see that "MEDEF's resolve to reform the social protection system was accompanied by a unilateral and ambiguous threat to pull out of social security bodies".

Commentary

Since being defeated at the October 1997 conference on employment, pay and working time (FR9710169F), CNPF, later renamed MEDEF, has developed a strategy to regain its influence. This strategy is based on an overhaul of the body's organisational structure (FR9811140F), consultation with the organisation's grassroots (FR9909109N), and "renewed focus" on overall goals. MEDEF has developed a schedule that other negotiating parties (trade unions, other employers' associations, and even the government) have either voluntarily agreed to or have been forced to accept because of MEDEF's threat to pull out of social protection bodies.

MEDEF has used to the full the tension it has created to place itself at the centre of the industrial relations debate. The employers' confederation thus intends permanently to alter French industrial relation rules in its favour. However, it will have to assume sole responsibility for any stalemate or breakdown that might occur. (Maurice Braud, IRES)