Debate and negotiations over trade union funding

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The debate over the funding of French trade unions from external sources has been given new momentum by two recent studies into the activities in this area of jointly-managed social security agencies. Two agreements concluded in June 2000 are designed to clarify this issue in a particular sector or company. The first sets up a jointly-managed association to fund social dialogue in the information technology, engineering and consulting sector. The second implements a system of company funding of unions represented at the Renault motor manufacturing group, based on works council election results.

The issue of trade union funding is a subject of debate in France. The topic is linked to the low level of funding raised through membership contributions. Comparative studies by the Organisation for Economic Cooperation and Development (OECD) and the International Labour Organisation (ILO) have shown that union density in France stands at below 9% - the lowest rate of all European countries. Union membership dues alone are not sufficient to fund union operations. All unions have supplementary sources of income, either from companies or the government. Although these sources of "indirect" income are justified, given the general-interest activities unions perform, where this money ends up is obscured behind non-transparent accounting. This regularly fuels allegations of fraudulent use of indirect revenue. A recent administrative inspection laid bare the indirect union funding practices of jointly-managed social security and welfare agencies.

In September 1999, the Court of Auditors (Cour des Comptes) submitted a report on the management of the social security system, in which it found that of the 4,300 employees of the Paris Local Health Insurance Fund [Caisse primaire d'assurance maladie de Paris], 14 were actually working for trade unions and top-up mutual insurance companies. A probe into other regional healthcare insurance funds (caisses primaires régionales) reportedly uncovered a similar situation. Based on these figures, a rough estimate would put the number of permanent union employees on the payroll of the various healthcare insurance funds (caisses d'assurance maladie) at 250. According to the Court of Auditors, there is little legal basis for this policy of secondment. More spectacular still was a recent confidential report by the General Inspectorate of Social Affairs (Inspection générale des affaires sociales, IGAS), which took issue with the operations of the jointly managed compulsory complementary pension fund (Caisse de retraites interentreprises, CRI) (FR0002138N).

Trade union and employer initiatives

The IGAS revelations have helped bolster suspicions over the possible inappropriate use of the whole jointly-managed social security system by unions and employers' associations. Both unions and employers' associations were quick to take action to counter these accusations. The five representative union confederations, CFDT, CFE-CGC, CFTC, CGT, and CGT-FO are working on a CGT-led initiative for a joint proposal on ways of clarifying union funding. Once the proposal has been discussed by the unions themselves, it will, in all probability, be submitted to the government in September 2000. In July 2000, CFDT made public its funding sources. Of an overall budget of FRF 220 million in 1999, FRF 159 million was said to have been raised from the union's own private sources, of which FRF 104 million came from dues paid by affiliated unions. For CFDT, publishing these figures is the first step in a forthcoming wider-scale "operation transparency". It is urging its affiliated federations, which are formally independent, to follow its lead.

On 3 July 2000, Ernest-Antoine Seillière, chair of the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) sent a letter (published in the Libération newspaper on 13 July) to the Association of National Social Security Funds (Union des caisses nationales de Sécurité sociale, UCANSS) as well as to other jointly-managed agencies. In it, Mr Seillière calls for a "full-scale review of budget appropriations" in jointly-managed agencies to identify "ways and means of resolving the situation by 31 December 2000, at the latest".

Recent sector and company-level agreements

Several attempts have been made in the past to make the funding of union activities more transparent. The most spectacular, but also the most controversial, of these was the "trade union voucher" agreement at the Axa insurance company in 1990. Workers in this company all received a blank coupon to the value of four hours' pay and had the choice of either discarding it or giving it to a union of their choosing. Another agreement reached in 1991 at the Casino retail group provided for unions represented in the company to receive a one-off sum from the firm as well as a supplement calculated on the basis of election results.

Two recent sector and company-level agreements have attempted to take this approach one step further. The first was reached in June 2000 by the employers' association for the information technology, engineering and consulting sector (Conseils et bureaux d'études d'ingénierie et d'informatique, or SYNTEC) and CFDT and CFE-CGC. It sets up a jointly managed association called Adesatt to fund social dialogue in this sector. This association will be chaired by the president of the employers' association and the position of general secretary will be filled by a CFDT trade unionist. The annual budget of between FRF 7 million and FRF 8 million will be funded through a contribution of 0.2% of paybill per thousand employees levied on the sector's 53,000 companies, with a total combined workforce of around 500,000. Adesatt itself will have no permanent employees but will cover the costs of visits by its members to companies. Part of the money raised will be given over to an observatory on careers in the sector. Adesatt research will be available to all unions, including those which did not sign the agreement.

A "social concertation" agreement was reached on 30 June 2000 between the motor manufacturer, Renault, and CFDT, CFE-CGC, CFDT and CGT-FO. It stipulates that all unions receiving at least 5% of the vote in works council elections will receive an annual allowance of FRF 500,000, plus a supplement proportional to the union's election score. This part of the agreement draws on the mechanism implemented at Casino, and involves funding for unions within the company, but the Renault agreement also covers funding for external organisations, guaranteeing an additional annual subsidy of FRF 600,000 for all union federations scoring over 5% of the vote in elections. On the basis of the last round of works council elections at Renault, four unions would be eligible for a share of the FRF 4 million funding, though CFTC failed to score the required 5%. The agreement also makes provision for full-time positions for the secretaries of the group's main works councils and for central trade union delegate s. However, the paid time off for workforce delegate s will be cut to 15 hours per month. CFDT welcomed this "overhaul" of union funding, even though, in the long run, it would prefer a system based solely on membership dues. CGT, which is the majority union at Renault, is also positive about the "merits of a transparent system". However, it bemoans the fact that the agreement reduces paid time off for workforce delegates by 60,000 hours. It postponed its decision on the agreement until September.


Government or company funding of specific union operations does not seem at all outrageous, provided that it is used for the common good of all workers and does not jeopardise union independence. In light of an increase in certain types of discrepancy, more attention should be paid to how contributions to the jointly-managed social security system are used. This system could soon be revamped either as part of the ongoing negotiations on the "overhaul" of the French industrial relations system (FR0002143F), or by legislation. (Udo Rehfeldt, IRES)

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