Social partners agree vocational training reforms
The social partners reached agreement on the future of vocational training in France on 14 December 2013. The document was signed by all employers’ and trade union organisations, with the exception of the Confederation of Small and Medium-size Enterprises and the General Confederation of Labour. This national interprofessional agreement makes fundamental reforms to the vocational training system and its financing, and will make changing jobs easier and improve employability.
Having successfully negotiated national interprofessional agreements on the ‘generation contract’ (FR1209031I) in 2012, and on safeguarding jobs (FR1302011I) on 11 January 2013, the social partners have completed the negotiation of a major reform of vocational training. Talks started in September 2013 (FR1310011I) and concluded on 14 December.
Both employers and unions have demonstrated their ability to implement structural reforms and validated the government’s decision to promote social dialogue as the way to negotiate such reforms.
The principal changes contained in the most recent agreement, the National Interprofessional agreement of 14 December 2013 regarding vocational training (in French, 338 KB PDF), are the creation of individual training accounts and an overhaul of how the vocational training system is financed and governed. The National Assembly adopted The bill on vocational training law, employment and social democracy containing the terms of the agreement (in French) on 7 February. The legislation includes three other reforms affecting apprenticeships, representative employers’ organisations and the funding of social dialogue.
Main elements of the reform
Individual training accounts
From 1 January 2015, all employees will have an individual training account valid from when they first join the labour market until they retire. An employee who changes jobs or alternates between work and unemployment will retain his or her right to training. This arrangement will replace the the Individual Right to Training, which was created in 2003 and was rarely used (FR0311103F). The individual training account will be provided as soon as its holder becomes an employee. A maximum of 150 hours that can be accumulated over nine years. Every employee receives 20 hours per year worked (for a full-time post) during the first six years of employment, and 10 hours a year for the three subsequent years. The account will be accessible via an online service.
The number of hours stated on the account can be supplemented at the time of use if the holder does not have sufficient credit to complete the course they take. It can be topped up by the employer, the account holder himself or herself, the professional branches of industry or by the national employment agency. If the holder is unemployed, his or her account can be supplemented by the state or the regional authority in which he or she lives.
To be eligible to be financed by the individual training account, courses must always be ‘qualifying training programmes’ which meet the anticipated needs of the economy in the short or medium term and which benefit the employee by safeguarding his or her career path. These training programmes will allow participants to obtain a nationally recognised qualification from one or more professional branches of industry.
The way in which the individual training account is used will be determined by the employee. The account cannot be debited without the express consent of the account holder, nor can it be depleted because of a change in employer or circumstances.
Career development consultations
All employees will be able to benefit, free of charge, from a ‘career development consultation’, from the date they first join the labour market until retirement, regardless of their status. This provision is underpinned by a belief that employees need support to choose training activities that match their profile and the needs of the economy.
All employees will also be entitled to a ‘career interview’ at least every two years. It will allow employees to consider their career development in terms of qualifications and jobs. Every six years, employers will produce a written appraisal of all employees’ careers and in enterprises with 50 or more employees, this document will be used to check whether the employee has benefited from sufficient training during that time; if not, a bonus of 100 hours will be added to his or her individual training account to put this right.
In companies with 50 or more employees, the works council (or, where there is no council, other staff representatives) will be consulted about vocational training trends and will have access to information on the number of employees who have had a career interview during the past two years, the number who have used their individual training account during work time, and the number of top-up hours contributed by the employer.
New financing system
The agreement puts an end to a financing system that is currently based on an obligation placed on companies to make financial contributions to vocational training. At present, in companies with 10 or more employees, the employer must allocate 0.9% of payroll costs to its ‘training plan’ fund, and those with fewer than 10 employees, 0.4%. If it has no fund, the employer must pay an equivalent sum to an organisation tasked with collecting contributions to vocational training from businesses such as a Joint Registered Collection Body (OPCA). Companies must also pay contributions to finance the Individual Right to Training (0.5% of payroll costs, for companies with 20 or more employees) and the Individual Training Leave schemes (0.2%).
The new arrangements have been made in response to pressure from the Movement of French Enterprises (Medef).The employers’ contributions, which added up to 1.6% of payroll costs in companies with 20 or more employees (1.05% for those with between 10 and 19 employees), have been replaced by a single, compulsory contribution; this is 1% of payroll costs for businesses with more than 10 employees, and 0.55 % for those with fewer than 10.
Companies with 10 or more employees can pay a reduced contribution of 0.8% if they agree to allocate 0.2% of payroll costs directly to the individual training account scheme. The contribution can also be lowered to 0.8% in enterprises that employ between 10 and 300 employees if the industry-wide agreement for their sector provides for an equivalent arrangement.
Governance and public policy
The new agreement redefines the role of the Joint Registered Collection Body (OPCA) organisations which will give priority to very small enterprises, and also to the Joint Fund for Safeguarding Career Paths (FPSPP) (FR0912019I) whose particular responsibility will be to fund professionalisation contracts and partly finance the individual training account scheme.
The agreement gives the professional branches of industry the role of supporting companies and employees in assessing how jobs will evolve, and what qualifications and skills a businesses will need. Each branch of industry will be required to set up a joint observatory to monitor possible trends in jobs, qualifications and skills. The agreement provides for the setting up of joint bodies at national and regional level to improve coordination of public policy and the policies of the social partners.
Reactions of the government and social partners
In a press release (in French), the Ministry of Labour welcomed the agreement’s ‘major advances’, and announced an important clarification which will take effect at the same time as the legislation. It will distinguish between the funding of training and the funding of employers’ and trade union organisations.
Only two organisations are unhappy with the agreement. While Medef expressed satisfaction with this agreement because it ‘reduces the compulsory contribution by businesses from 1.6% to 1%’ for training purposes and ‘transforms it into a voluntary act’, the Confederation of Small and Medium-size Enterprises (CGPME) criticised the cut in compulsory contribution and the inadequate pooling of funds which, it said, ‘will penalise companies with between 10 and 300 employees’.
All the union organisations welcomed the agreement with the exception of the General Confederation of Labour (CGT), whose negotiators condemned what they described as a ‘travesty of a negotiation’.
This is a fundamental reform, the consequences of which are difficult to predict in full. Nevertheless, it is set to change the architecture of the present system.
As well as developing increased efficiency, it has brought a new element to ‘vocational social security’ in the form of the individual training account which will make changing jobs easier and improve the labour force’s employability.
It remains to be seen whether businesses will observe the spirit of the new system, or whether those that do not see employee training as a priority will simply see it as reducing the cost of labour by removing the obligation to contribute to a training fund.
Frédéric Turlan, IR Share