Settlement to unemployment insurance dispute now more likely

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In summer 2000, French industrial relations was dominated by the fall-out from the government's refusal to endorse an agreement on the reform of the UNEDIC unemployment insurance agreement, signed by the MEDEF, CGPME and UPA employers' organisations and the CFDT and CFTC trade union confederations. The signatory organisations embarked on a "point-by-point" rebuttal of the government's position. However, as the summer holiday season drew to a close, it appeared that all those involved - the government, employers' organisations and signatory and non-signatory unions - were committed to preserving UNEDIC's joint-management system.

A draft agreement to replace the current agreement on the UNEDIC unemployment insurance system, due to expire on 30 June 2000, was signed on 14 June 2000 (FR0006171F). It provided for the overhaul of the entire unemployment benefit system, based on a new "employment action plan" (Plan d'aide au retour à l'emploi, PARE) scheme. The agreement was signed by all the employers' associations represented on the UNEDIC board - the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), the General Confederation of Small and Medium-sized Enterprises (Confédération générale des petites et moyennes entreprises, CGPME) and the Craftwork Employers' Association (Union professionnelle artisanale, UPA) - but by only two of the five representative trade union confederations, CFDT and CFTC. Faced with strong opposition from the other unions - CFE-CGC, CGT and CGT-FO- and unrest within the political parties in its parliamentary majority, the government took extra time to consider approving the agreement (FR0007176N). On 24 July, it officially announced that it had decided against doing so (FR0008184N). The signatory unions and employers' organisations stated that they would temporarily withdraw from the administrative board of UNEDIC.

Angry responses

The signatories to the UNEDIC agreement were quick to react to the government's refusal to endorse it. In a letter sent on 1 August, they challenged the good faith of the arguments put forward by the government to justify its opposition. These arguments are that:

• the funding plan provided for in the agreement is unsound. The signatories put forward figures seeking to demonstrate that, contrary to the government's contention, the new agreement ensures a balanced budget for the unemployment insurance system.

• there will be an unequal distribution of the UNEDIC surplus, to the detriment of unemployed people. According to government calculations, of the FRF 75 million UNEDIC surplus expected over the duration of the agreement (until 2003), a mere FRF 4 million is to be allotted to boosting the level of unemployment coverage, whereas FRF 71 million will be given over to cutting contributions. The signatories challenge this argument, claiming that the actual money allocated to unemployed people will in fact be FRF 50 million, rather than FRF 4 million;

• there is a danger that a two-track back-to-work assistance system will create two classes of unemployed people. In the government's view, the creation of the PARE scheme for those unemployed people covered by UNEDIC, for which long-term unemployed people covered only by a social security assistance scheme are not eligible, is unacceptable. The signatories' counter-argument is that the current division of unemployed people into those covered by the insurance system and those covered by the assistance system does not stem from the current collective agreement but from a 1984 decree adopted by the (Socialist) government of the day;

• there is no clarification of the financial relationship between UNEDIC and the state. The government, which absorbed the UNEDIC deficit in 1993, is keen for the agency to repay this debt, especially in light of the fact that the government is facing problems funding the financial incentives for the current introduction of the statutory 35-hour working week (FR0001137F). However, UNEDIC, which has posted a budget surplus, recently refused to assist the government in funding the 35-hour week (FR9910112F). However, the signatories of the agreement have indicated that discussions with the government over clarification of the state-UNEDIC financial arrangements should continue; and

• the signatories have said relatively little on two issues raised by the government. They have not replied to government concerns over the lack of clarity surrounding the definition of "appropriate employment" - ie those jobs which unemployed people cannot turn down without risking having their benefits cut. The principle of this penalty is also a cause for dispute. The government states that it is within the jurisdiction of the government and not - as the signatories would like - of UNEDIC, to decide whether cutting unemployment benefit is warranted. Once again, the signatories' "point-by-point" response to the government carefully avoids this issue.

Non-signatory unions call for dialogue

On the whole, the signatories to the new UNEDIC agreement reacted strongly to what, in their opinion, was a government ploy designed to challenge joint management of the unemployment insurance system. Throughout August 2000, the stance of the signatories shifted back and forth between maintaining their participation in the running of UNEDIC or withdrawing from it. As for the non-signatory unions (CGT-FO, CGT and CFE-CGC), they sent a letter to the signatories asking them to include in the agreement the following demands, which are partly based on government concerns:

• improving the level of coverage of unemployment benefit, as well as it levels and eligibility criteria;

• preventing unemployment through the development of vocational training;

• helping unemployed people back to work by fostering their commitment to finding employment; and

• clarifying the responsibilities of, and reciprocal arrangements between, the unemployment insurance system and the government.

The call by the non-signatory unions for a resumption of negotiations is geared to ensuring that the "parity principle" survives (FR0001134F) by "creating the conditions for a comprehensive and dynamic agreement complying with the original values of the parity principle and fixing the collective responsibility of the social partners towards workers, unemployed people and companies".

Dispute eases

Following the turmoil during the summer months, attitudes became more conciliatory in the early autumn. It appears that the signatories' threat to pull out of UNEDIC has faded. CTFC stated in late August that it "would continue to fulfil its responsibilities in the various bodies of UNEDIC". CFDT followed suit and asserted that the union confederation "would continue to defend the unemployed". MEDEF adopted the same line and "does not envisage any definitive pull-out of UNEDIC in the immediate future". On 5 September, the signatories to the agreement met, at their request, with the Minister for Employment and Solidarity, Martine Aubry, to take stock of the situation. Having assured the social partners of the government's resolve to preserve joint management of the unemployment insurance system, Ms Aubry asked the signatories to redraft the agreement in an attempt to iron out substantive problems - such as a balanced budget, the benefit-related penalty system and the financial relationship between the state and UNEDIC - and resolve the dispute. The non-signatories, who were also invited to the Ministry for Employment and Solidarity on the same day, stated that they were ready to resume negotiations as soon as they received the word from the signatories.

For their part, the employers' associations and signatory unions rebuffed any mention of "renegotiation" with the non-signatory unions, even though they are prepared to discuss again some aspects of the agreement. Above all, this subtle choice of wording enables the signatories to save face by demonstrating their resolve to make very few concessions to their opponents.

Commentary

A definitive agreement has yet to be concluded and therefore it is too early to draw any conclusions on this first part of the current "industrial relations overhaul" project (FR0002143F). From a political perspective, the employers' associations, which appeared to be at the forefront of the reform of this aspect of industrial relations, have gradually seen their position fall apart. The employers' resolve to create a "new social constitution" (FR9912122F) for industrial relations, without any government intervention, has not been achieved in the case of the unemployment insurance system. On the face of it, MEDEF's high-profile strategy, stressed at the outset of negotiations, to remove the state as an actor in the definition of new industrial relations rules has foundered. Its failure is demonstrated by the decisive role being played by the government in settling the present dispute. However, this institutional dispute between the government and employers' associations, and to a lesser extent, CFDT reflects a difference in approach in terms of the role to be played by the unemployment insurance system in getting workers back to work. This crucial issue for the future of unemployed people has yet to be addressed. (Carole Tuchszirer, IRES)