Grand conference to launch new government’s social reform strategy

The new French President, François Hollande, has kept his election campaign promise to host a special conference bringing together government representatives and social partners to define the incoming government’s social policy. The conference, held on 9 and 10 July 2012, debated a wide range of subjects including the creation of jobs for young people, training and development, initiatives for ensuring fairer pay, and the reform of pensions and the social security system.

Background

During the French election campaign, the attitude of socialist candidate François Hollande towards relations with trade unions and business leaders, indicating that he would respect their autonomy, set him apart from Nicolas Sarkozy, his competitor for the Presidency.

A special social conference was one of the 60 manifesto proposals (in French, 620Kb PDF) put forward by François Hollande during his campaign. In an open letter to France’s trade unions (in French) to mark Labour Day on 1 May, the President promised to make social dialogue a major priority and a pillar of his method of government, saying that it would be ‘elevated to the status of a constitutional principle’.

Social conference based around seven themes

On 9 and 10 July a grand social conference involving nearly 300 delegates was held at the Economic, Social and Environmental Council in Paris to define a road map for the new government’s social reforms. The conference, which opened with a presidential speech by François Hollande and closed with a Prime Minister’s summary (in French, 255Kb PDF) by Prime Minister Jean-Marc Ayrault, was based on seven round tables. The round tables, each facilitated by a government minister and an expert, discussed:

  • the development of jobs, with a particular focus on young people;
  • developing lifelong skills and training;
  • ensuring fair and effective remuneration systems;
  • achieving professional equality and improving quality of life at work;
  • meeting the conditions of industrial renewal;
  • ensuring the future of pensions and social security;
  • the modernising of public action and its agents.

The five trade union confederations (CGT, CFDT, CGT-FO, CFTC and CFE-CGC) and the three employer organisations (Medef, CGPME and UPA) took part in all the round table discussions, with the exception of the public service debate. Other organisations were invited to the workshops depending on the topic under discussion, including unions (Unsa and FSU), employer organisations (FNSEA, UNAPL, Usgeres and Prisme), representatives from local authorities, and chambers of industry and commerce and agriculture.

In his speech, President Hollande said he recognised that France had not developed a ‘culture of negotiation’. Previous governments had not always held formal consultations, while trade unions and business leaders had not always taken the initiative to kick-start vital changes through social negotiations.

A road map for the five-year term

Closing the conference, Prime Minister Ayrault presented his social road map (in French, 994Kb PDF), affirming that social dialogue would be the trademark of his government. The road map runs to nearly 30 pages, and sets out the findings and objectives for each of the seven themes, along with the main areas of action, the way forward and the timetable.

In the employment and industrial relations spheres, the following actions and implementation dates were agreed.

Social dialogue

The government intends to include in the Constitution the principles of the law of 31 January 2007 (FR0704039I) that gives priority to industrial relations consultations before the government adopts any legislative reform.

To reinforce the role of social actors, the plan is – in the second half of 2013 – to take stock of the reform of union representativeness (FR0808039I) adopted in 2008, to adopt legislative provisions on financial transparency for works councils (early 2013) and to continue the multi-industry negotiation begun on employee representative bodies (with a briefing with the government before the end of 2012).

This will be followed by a consultation on the place of employees in the governance bodies of companies (early in 2013). A task force on rationalising the various mandatory negotiations in companies will be set up before the end of 2012.

Employment

Social partners will be consulted over the summer on the plan to set up the ‘jobs of the future’ initiative, designed to promote the occupational integration of low-skilled young people. A bill will then be submitted to parliament.

A multi-industry negotiation will be launched on the arrangements for putting in place the ‘generation contract’, a flagship project promised by President Hollande to enable a young person to be taken on in a position occupied by a retiring elderly worker. This measure, which will be accompanied by a dramatic reduction in social security contributions, will be presented in September in order to pave way for negotiations on the practicalities of the plan, and will form the subject of a bill before the end of the year.

In addition, the government is inviting social partners to negotiate, at multi-industry level, the conditions for improved job security. The negotiations will take place based on a document to be issued in September and are due to be completed in the first half of 2013.

For the government, this negotiation must take into account the fight against excessive job insecurity and what it describes as ‘the anticipation of changes in economic activity, including reinforcement of forward-looking management of jobs and skills, combined with fair and transparent information for workforce representatives’.

In addition, this negotiation will cover ‘support for changing market conditions’ and will replace an initiative launched under Nicolas Sarkozy that would have enabled businesses to negotiate agreements on maintaining jobs in return for flexibility from employees.

This time, says the government, the aim is:

…to acquire by means of social dialogue more effective levers for protecting jobs and economic activity in companies facing market difficulties and in need of adaptations, to improve and legally secure procedures for collective redundancies, to set up controls covering redundancies that are manifestly unfair and the obligations associated with plans to close profitable sites.

For the first semester 2013, there are plans for a multi-industry negotiation on improving access to employment and professional training for disabled workers. There is also a plan to revise the provisions on short-time working following ‘initial immediate improvements at the start of the new parliamentary session’ on the basis of an evaluation of the national multi-industry agreement of January 2012 and the recent report on the French system of partial activity (in French, 556Kb PDF) by the French Inspectorate General of Social Affairs (IGAS).

In the longer term, a project will be launched relating to the protection of professional careers with the establishment of a group of experts who will be asked to submit recommendations by autumn 2013.

Reforms and initiatives announced

The government has made a number of important announcements, promising:

  • the rapid implementation of an emergency plan for professional training at regional level aimed at unskilled young people, employees in endangered jobs and job-seekers;
  • reform of the mechanism for revising the minimum legal wage with a draft to be presented before the end of the year, followed by consultation with social partners;
  • multi-industry negotiations in 2013 on provisions for financial investment and save-as-you-earn schemes, starting with the abolition of the law on profit distribution (FR1105011I);
  • a bill designed to prevent ‘practices of unfair remuneration’ for directors and reinforce governance controls for businesses, involving in particular the inclusion of employee representatives on company pay committees;
  • multi-industry negotiations starting in September on professional equality and quality of life at work, with the aim of reaching a conclusion before the end of the first half of 2013;
  • consultation with social partners on methods for expanding and diversifying the sources of financing the social security system;
  • the creation, welcomed by Medef, the French business confederation, of a mission on business competitiveness led by Louis Gallois, a former director of French train operator SNCF and aerospace group EADS;
  • negotiation within the public service in the autumn of this year of a framework agreement on the prevention of social risks, and the launch of a consultation to assess the ‘general revision of public policies (RGPP)’ adopted in 2007 in order to restore balance in public accounts, in particular by applying the rule of not replacing one in two civil servants.

Reaction from social partners

Trade union leaders are generally pleased with the outcome of the conference. A follow-up meeting to the conference is scheduled for the end of the year.

‘The result is not necessarily pleasing on all counts, but the basics are there,’ said François Chérèque, Secretary General of the Christian Trade Union Federation (CFDT). His counterpart at FO, Jean-Claude Mailly, is ‘pleased with the peaceful social dialogue’, while Bernard Thibault, Secretary General of the General Confederation of Labour (CGT) sees ‘a political will towards employee organisations that bears no comparison to what we have seen these last five years’. But he regrets that there are no swift measures in response to site closures.

For her part, Bernadette Groison, Secretary General of the largest teaching union federation, the Unitary Union Federation (FSU), said she would have liked ‘a rapid opening of discussions on public employment and on the salaries of civil servants’.

The President of Medef, Laurence Parisot, was pleased with the method, with the announced reinforcement of the role of social partners, and with the planned reform of social protection financing. Nevertheless, she criticised the fact that the road map did not ‘take account of the realities faced by businesses’ and that the announced reforms relating to jobs risk led to ‘new inflexibilities’.

Commentary

The conference marked a new approach in relations between the government and social partners in endeavouring to give social dialogue its rightful place. It is an approach reminiscent of the recognition of social dialogue contained in the Treaty on the Functioning of the European Union (1.4Mb PDF).

Although this initiative must be welcomed, it is bound to be shaken by a serious crisis sparked by the announcement of a large number of job cuts and site closures across France. Among these is the closure of the Aulnay-sous-Bois factory, with the loss of 3,000 jobs, owned by car manufacturer PSA Peugeot-Citroën, announced a few days after the conference.

The government will need to reconcile the ‘long’ consultation and negotiation timeline with the adoption of urgent measures.

Frédéric Turlan, IRShare

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