Calls for special provisions on 35-hour week for small businesses

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In late 1999 and early 2000, some French employers' organisations have called for a moratorium on the application of the recent 35-hour working week legislation to firms with under 20 employees, currently planned for January 2002. The government, while willing to help small companies facing difficulties, is opposed to such a move.

Under the terms of the recent legislation on the reduction of working time (FR0001137F), companies with fewer than 20 employees must introduce the 35-hour working week by January 2002 (two years later than larger firms). However, a number of employers' organisations, including the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), believe that the law will worsen the position of small companies which are currently faced with acute problems in recruiting staff at a time of economic growth. With a view to "correcting the negative consequences for growth and employees' purchasing power", the MEDEF president, Ernest-Antoine Seillière, has called for a moratorium on the transition to the 35-hour week for companies with under 20 employees

The debate over a more flexible application of the 35-hour week legislation is occurring against the backdrop of change at the top of the Ministry of Employment and Solidarity, following the departure of the architect of the 35-hour week law, Martine Aubry, in October 2000. The Minister for the Economy and Finances, Laurent Fabius, has given support to the idea of applying the law more flexibly, stating that growth might slow if "businesses, particularly small and medium-sized ones [...] find it impossible to increase production due to the problems of finding staff and training them". However, although the government has stated its willingness to assist small businesses encountering problems, it does not intend either amending the legislation or abandoning the principle of implementing the 35-hour week in all firms. In November 2000, the new Minister for Employment and Solidarity, Elisabeth Guigou, invited employers' associations and unions to carry out a detailed review of the difficulties encountered in the various sectors.

Employers' associations are divided over this issue. MEDEF and the General Confederation of Small and Medium-sized Enterprises (Confédération générale des petites et moyennes entreprises, CGPME) are demanding a moratorium on the law on the 35-hour working week after 2000, which would exempt small businesses. The Craftwork Employers' Association (Union professionnelle artisanale, UPA) has challenged the idea of a moratorium and is asking for "more flexibility". UPA fears that allowing the 39-hour week to continue in small businesses will only widen the gap between them and larger companies, thus worsening the problems of recruiting staff that small and medium-sized craft businesses are already experiencing. In 20 of the 27 industries involving craft production, agreements on the 35-hour week have already been signed.

The management of overtime is a crucial issue in the debate. Referring to a possible slowdown in the economic growth rate and to labour shortages, MEDEF is calling for an extension of the transitional scheme introduced by the 35-hour week legislation. Currently, overtime worked from the 36th to the 39th hour in a given week attracts a pay premium of 10%. In one year's time, it will be paid at the normal overtime premium of 25%. MEDEF wants this transitional scheme to be extended to companies with fewer than 20 employees, once the law affects them from 2002. UPA has tabled a similar request. CGPME is in favour of a corrective law, which would set the annual quota of authorised overtime at 200 rather than 130 hours per employee.

The Ministry of Employment and Solidarity argues that "two-thirds of companies with fewer than 50 employees and 40% of those with fewer than 20 have already switched to the 35-hour working week". It also stresses the leeway already offered to companies by the law. Some industries (such as hotels and catering and road haulage) are operating special schemes allowing the de facto maintenance of the 39-hour week. Lastly, neither the Ministry nor the trade unions are convinced of the relevance of the connection between labour shortages and the 35-hour week made by employers. In the context of an economic recovery and a drop in unemployment, recruitment problems in particular sectors appear to stem more from poor working conditions (in the construction industry) and low levels of pay (hotels and catering). Additionally, a recent survey carried out by the Ministry shows that labour shortages are often worst in industries in which the 35-hour week is not in general operation, such as building and public works, the hotel trade, cafés, restaurants, and information technology.