France: Developments in working life – Q1 2016

Government plans to combat high levels of unemployment, controversial revisions to the Labour Code, negotiations about unemployment insurance schemes and the impact of digitalisation on working life are the main topics of interest in this article. This country update reports on the latest developments in working life in France in the first quarter of 2016.

Plans to boost employment

Since the beginning of 2016, the government has been seeking new initiatives to reverse the trend of high levels of unemployment. On 18 January, the President, François Hollande, revealed  a plan to boost employment in response to what he called ‘an economic and social state of emergency’. Under this plan, which is backed by a budget of €2 billion, companies with fewer than 250 workers will receive an annual €2,000 payment for two years for every full-time employee hired on a contract lasting more than six months, and paid at a rate between the minimum wage and 1.3 times the amount (between €1,466.62 and €1,906.60 per month).

In other changes, in the event of legal disputes, the compensation for dismissals without sufficient cause will be capped, depending on the employee's seniority, except in the case of a serious breach of labour law such as harassment or discrimination. This measure arises from numerous demands from employers.

Finally, the state will provide €1 billion to increase the number of traineeships for the unemployed from 500,000 in 2015 to one million in 2016.

First step of the labour law reform

Robert Badinter, who served as Minister of Justice and then President of the Constitutional Council under François Mitterrand, presented to the Prime minister a report on 61 fundamental principles to form the basis for the future Labour Code, paving the way for a major reform of labour law. 

In February, the disclosure of a preliminary draft angered unions who argued that the measures were fully in line with the demands of the main employers’ organisation MEDEF. Due to the opposition of unions and student organisations, the government decided to postpone the adoption of the bill by the Council of Ministers, in order to allow time for discussion with social partners. However, several trade unions and student organisations called for a day of action on 9 and 31 March.

On 24 March, the Council of Ministers adopted the revised El Khomri Bill, named after the present Labour Minister, designed to rewrite the French Labour Code. This time, however, the bill did not go far enough from the perspective of employers. MEDEF was unhappy with changes introduced in the new version of the bill, while organisations representing small and medium-sized enterprises (CGPME, UPA) felt disadvantaged by new rules that offer greater flexibility to large companies than to SMEs through social dialogue. On the union side, the reformist unions (CFDT, CFTC, CFE-CGC, UNSA) noted improvements that brought the proposed changes more in line with their preferences. But other unions (CGT, FO, SUD) and student organisations have continued to demand the withdrawal of the proposals.

On 31 March, several hundred thousand people demonstrated across France calling for the bill's withdrawal. Nevertheless, the government intends to present the bill to parliament for debate this spring with a view to its adoption in summer.

Negotiations on unemployment insurance

It was in this stormy climate that negotiations on the unemployment insurance system began to renew the national collective agreement, which expires at the end of June. At the same time, workers in the live performance and entertainment industry have also been negotiating specific unemployment insurance schemes. In both cases the deteriorating employment situation will drive social partners to seek to reduce the costs of these schemes.

The impact of digitalisation and the collaborative economy

In the field of working conditions, several reports have examined the impact of the digitalisation of employment and work organisation, as outlined below.

  • A report from the French Digital Council (CNNum) recommends applying the principle of loyalty to platforms of the collaborative economy (peer-to-peer-based sharing of access to goods and services coordinated through community-based online services) and offering representation in the national social dialogue to people working in the collaborative economy. It calls for effective protection of people who are self-employed but economically dependent.
  • Socialist deputy Pascal Terrasse was tasked with overseeing a report for the Prime Minister focusing on the collaborative economy. The resulting publication claims to promote the working conditions and social protection of collaborative economy workers, but without creating a specific status. 
  • The government think tank France Stratégie published a working paper (PDF) proposing three options to adapt labour law to new forms of work.
  • The bill on the reform of the Labour Code contains some provisions linked to digitalisation of work, such as the right to switch off communication devices that are linked to work, or to improve telework.

Civil servants’ remuneration

Finally, in March, to improve relations with civil servants, the government announced an early removal of the freeze imposed on the index-linking mechanism used to calculate civil servants’ remuneration.

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