France: Criticism of labour courts unfounded says new study

Industrial tribunals in France and the labour court system in general have come under fire from employers who claim they slow down the hiring of workers and contribute to unemployment. But new research does not back up these claims. A study suggests there is little difference between the French system and others across Europe.

Introduction

The French labour court system has been heavily criticised in the recent past, especially by employers' organisations. They argue that the French industrial courts slow down the hiring of workers and sometimes even contribute to increased unemployment.

Employers have demanded a reform of labour law based on examples of good practice in countries where labour judges interfere less in a company's management.

Now a study based on international comparisons has challenged widespread negative views on the labour court system (in French, 991 KB PDF). The study was released in June 2014 by the French Centre for Employment Studies (CEE). Two main lessons emerge. First, the growth of unemployment increases the number of litigations and not the opposite. The second is that, the more employees are involved in the formulation of the rules and the decisions, the more the claims decrease. 

Systems shown to be similar across Europe

The study is based on a detailed analysis of French labour courts and a comparison with the situation in other countries. Almost all European countries have courts which are used to settle labour disputes.

The CEE study found that French industrial tribunals do not differ greatly from courts in other countries – though their structures and skills may be different. The study looked at:

  • whether a higher proportion of French companies were referred to labour courts;
  • the evolution over time of French labour law;
  • whether social relations in France had become 'judicialised'.

It found that the development of labour court claims had remained relatively stable over time and that the number of claims was no higher in France than elsewhere.

Figures from the Statistical Yearbook of Justice shows great stability between 1983 and 2012, with the number of claims between 150,000 and 170,000 new cases per year. Relative to the number of private sector employees, these figures represent less than eight applications per 1,000, no matter for what legal grounds. In 2012, the rate was 7.8 per 1,000 in France against 10.6 per 1,000 across Europe as a whole.

The CEE study therefore observed that, in France, industrial tribunals do not play a more important role in individual work-related conflicts than in other European jurisdictions.

Links to unemployment

Employers' organisations have suggested that there is a link between unemployment and applications to a labour court. It prompted CEE to focus on the idea that the court may discourage employers from hiring.

The study compared the rate of use of labour courts and the unemployment rate in France between 1970 and 2012, considering that the first always evolve with delay behind the second, as elsewhere in Europe.

The conclusion of the study is clear. According to an interview with the online newspaper Metis (in French) by the report's author, Sebastian Schulze-Marmeling:

It is not the industrial tribunal that contributes to increased unemployment but the rise of unemployment that causes a higher recourse to judicial arbitration.

He said the same strong positive impact of unemployment was also seen in the other European countries that had been studied.

This assertion goes against common beliefs. Laurence Parisot, the former leader of the employers' union, Movement of French Enterprises (MEDEF), stated in May 2014 that 'French companies were not hiring due to their fear of the labour tribunal'. She complained that the court often 'gets away from the law' and 'systematically leads to the conviction of employers'.

Strong employee representation reduces conflict

The author of the CEE study makes the hypothesis that an application filed in a court is a 'last resort initiative' in the event of a failure of prior mechanisms of labour conflict management.

The national frameworks of industrial relations play a crucial role in the prevention and regulation of conflicts.

The conclusion is that a high coverage of encompassing collective bargaining and strong employee representation at the workplace level decrease the emergence of conflict. They provide an efficient institutional framework for the settlement of conflict within the workplace.

European countries with a strong coverage of employees by collective agreements or which give extensive rights to the representatives, namely co-determination and consultation rather than just information, are significantly less affected. Similarly, high union rates, often associated with high employee representation, reduce the frequency of industrial tribunals.

In France, the REPONSE survey data (2011) help to strengthen this conclusion.

The bargaining coverage is a non-relevant index due to the existence and the use of extension mechanisms (collective agreements cover almost all employees). In contrast, companies that report the presence of staff representatives are significantly less affected by legal proceedings. This effect is amplified when these bodies are sufficiently and regularly informed.

The results of this research are significant. They demonstrate that:

  • there should be less focus on the role of the labour court;
  • the forms of treatment of individual conflicts within the company should be strengthened.

Commentary

The recurring accusations against labour tribunals are intended to weaken the judicial protection of employees. This study offers a more balanced point of view.

The industrial tribunals system is, however, not beyond reproach. In July, a report submitted by Alain Lacabarats, Honorary President of the Social Chamber of the Court of Cassation, to the Minister of Justice, gave a dark picture. He said:

The finding is unanimous: the Labour Court does not operate in a manner consistent with the requirements of European standards and has serious shortcomings.

In 2013, the state was convicted 51 times for denial of justice in labour matters. In Strasbourg, the Group of States against Corruption (GRECO) also recommended that France should lead a reform of industrial tribunals 'to strengthen the independence, impartiality and integrity of lay judges'.

A reform currently being drafted by the French government seeks to make the tribunal more professional in two ways.  

First, the text reinforces ethical requirements and disciplinary procedures. It also requires tribunal members to undergo initial training, which is not currently mandatory. Secondly, the government wants to strengthen the role of professional judges. This is the most critical aspect for the social partners, who currently have little confidence in lay judges.

After the reform, if both parties are in favour or if the conciliation board believes it is unlikely to be able to resolve the dispute, the file could be sent directly to a professional judge. Furthermore, the time taken for cases to be settled will be considerably shorter after the conciliation phase; the judgment office will make a decision within three months and the process could be accelerated.

It may be that the industrial tribunals system will become more efficient. However, the findings of this research seem to indicate that just as important is the need to channel conflict through workplace institutions before referral to the court.

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