The consequences of the October national conference

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In November 1997, the French Government, employers' associations and trade unions are trying to find a way to restart social dialogue following the "freeze" announced by Jean Gandois as he resigned as president of the CNPF employers' confederation. The Government is doubling its efforts at national and European levels, while contrasting attitudes have come to light within the CNPF itself.

Following the tripartite national conference on employment, pay and working time held on 10 October 1997 (FR9710169F), the breakdown in social dialogue announced by Jean Gandois as he resigned as president of the CNPF employers' confederation was a let-down. According to the Government, its goal of a 35-hour working week, announced at the conference, is only feasible if there are parallel negotiations to take account of the specific nature of each sector and each company. If the employers' associations are determined to withdraw from all consultation and negotiation then not only would the various goals related to reducing working time be thrown into question, but also the system of industrial relations in France, as it has developed over the past decades.

There are certain indications that the tone of the reactions that immediately followed the October conference (FR9710174N) is dissipating, owing to two major factors. The Government is attempting to restart social dialogue and to have an influence on the "European social model". Criticism from employers' associations following the conference were not directly aimed at the unions. They mainly targeted the Government, which the employers' associations held responsible for wanting to introduce an "uneconomic" (economically counterproductive) law based purely on "ideology." The Government is waiting until the policy debates going on within the CNPF are over - the new president of the CNPF will be elected on 16 December 1997. However, it has taken a certain number of measures at a sector al level and has made commitments to certain industries. It has also decided to be very active at a European level, primarily at the November Employment Summit in Luxembourg.

Campaign of clarification

The Government has done a lot of explaining since the social summit. It has attempted to reassure heads of industry about the costs of the implementation of the 35-hour working week. The Minister of the Economy, Dominique Strauss-Khan, takes the opportunity at every meeting with heads of industry to explain that the "statutory working week should not necessarily be interpreted as meaning the actual working week." No one is obliged to switch to the new statutory working week: if a company decides not to do so, the four extra hours between 35 and 39 (the current weekly norm), will be considered as overtime, which currently attracts a 25% pay premium. Thus, at worst, a 39-hour week will will be paid for as 40 hours and will cost very little extra. Mr Strauss-Khan was also keen to point out that he wanted to set up measures that would not penalise those who opted out of the 35-hour week. A further "improvement" in the Government's proposals was that the extra two years (ie until 2002) given to companies employing fewer than 10 people to comply with the 35-hour week, could be extended to companies with fewer than 25 employees.

Will the reduction in the working week replace the textiles plan?

The Minister of Employment and Solidarity, Martine Aubry, and the Secretary of State for Industry, Christian Pierret, met with textiles, clothing and leather industries' employers' federations at the end of October. The European Commission has given the Government until 31 December 1997 to make modifications to the so-called "Borotra plan" (named after the Minister of Industry in the previous Government) for textiles (EU9703111N). The plan aimed at helping this ailing sector, giving companies the opportunity to benefit from a reduction in employers' social security contributions on all salaries of up to one and a half times the value of the SMIC Minimum Wage (Guaranteed). This applied to the vast majority of employees in these sectors, where pay is particularly low. Companies have been very concerned about the impending termination of this period of exemptions, which would see their pay costs increase by 6%-9% according to one employers' official.

Mr Pierret made it clear that companies which agreed to reduce the working week and maintained their current employee numbers would be eligible for assistance amounting to between FRF 8,000 and FRF 10,000 per year per employee. They would not be forced to increase their workforce. The UFIH (Union Française des Industries de l'Habillement), the employers' association in the clothing industry, stated that it was willing to examine all Government proposals and declared that "we have an obligation towards our members who are concerned by the expiry of the textiles plan". This federation wants to open negotiations at a sector level but lays down two conditions. Firstly, working time must be calculated on a yearly basis and, secondly, companies should be able to negotiate individually the ways in which the agreement was to be introduced. The textiles employers body, UIT (Union des industries textiles), is more cautious and believes that the Government's proposals offer only a short-term substitute for the "Borotra plan". The organisation's leader was not willing to go beyond the discussion stage with the Government: "the CNPF has taken the unanimous and solidaristic decision not to enter agreements at sector level and I stand by this decision."

Preparation for the Jobs Summit

During a Senate debate on 13 November, Ms Aubry made clear the position that France would adopt at the EU "jobs summit" to be held on 20-21 November: "France has never believed that the 35-hour working week should be discussed at the summit. However, the European Commission considers that it is in keeping with the good traditions, and I would even go so far as to say in the best traditions of Europe, that in working together for the reduction of the working week each individual country implement the methods that it judges most pertinent in its social context to reduce unemployment and restructure the labour market." She went on to say that "Brussels", the Prime Minister of Luxembourg Jean-Claude Juncker, who currently holds the EU Presidency, and the French Government wished to see the summit as "a major first stage in the construction of social Europe, which we and our fellow citizens desire".

According to the Minister: "We have to proceed as we have with monetary and financial matters. We must be able to set our goals including quantified aims in terms of, for example employment creation, including jobs for young people, long-term unemployed people and women, and reductions in labour costs - everything that demonstrates that (...) many countries will follow our lead in accepting that this movement towards social convergence, as stated by President Juncker, continues down the right path." In Ms Aubry's opinion, this summit must produce "quantified goals in areas which will enable us to reduce not only unemployment as a whole but more specifically among the most badly affected groups. The summit must also produce investment initiatives, primarily from the European Investment Bank, to help solve the problems of unemployment, in addition to major renewed European social negotiations."

Opinions differ among employers

Reaction from banks

If the majority of sectors are determined to uphold their attitude of a freeze in negotiations, some wish to use the upheaval caused by the working time changes in order to try and make progress on issues that have been a persistent stumbling block with trade unions. A case in point is the banking employers' federation, AFB (Association Française des Banques), which announced its decision, 10 days after the summit, to "terminate the collective agreement governing banks" (in France, collective agreements do not have a predetermined lifespan and are more often simply amended and superficially modified - agreements are only scrapped entirely if one of the signatories terminates them, which is extremely rare). The banking collective agreement dates from 1947, and the AFB has long wanted to scrap one of the sections under which salary increases are based on length of service and the value of "bank points" (a reference on which all salaries in the profession are based). Employers view this mechanism as too rigid and disconnected from the management of individual institutions. AFB has also wanted to repeal another section of the agreement dealing with collective redundancies under which ailing banks are required to lay off those with the shortest length of service, which most often means young people.

However, two days after it announced its decision, the AFB - as a result of pressure from the Ministry of Finance - announced that it would enter into negotiations before terminating the collective agreement. On 22 October, the association offered the unions "negotiations to modernise the collective agreement governing the banks." These negotiations "should be concluded by January 2000 and coincide with the deadline for the adoption of the 35-hour week." Certain chairs of the larger banks did not want the position adopted by the AFB to be seen as a backlash to decisions made by the Government.

A preliminary meeting to decide the areas to be covered by the negotiations took place on 5 November. Following these preliminary negotiations the five union federations (CFDT, CGT, SNB-CGC, CFTC and CGT-FO) published a joint declaration in which they agreed to the modernisation of the collective agreement. The unions are" keen, despite the circumstances, to give the negotiations every chance without accepting the challenging of the social status quo (...) and are demanding parallel sectoral negotiations to discuss the implementation in the banking sector of the results of the conference on 10 October". In the opinion of the AFB, negotiations on this subject at sector level are out of the question. It believes that "this should be discussed at company level." Nevertheless, the AFB proposes to introduce an entire section dealing with working time into the collective agreement "in order to bring it more or less into line with the forthcoming bill on the 35-hour week."

There are thus differences in opinion between the two sides. The unions wish to see the reduction in the working week applied to the whole sector and negotiations not to be left up to individual companies and institutions. The next meeting will be held on 18 December. The threat of termination of the collective agreement is still ever-present, given that the AFB wishes to "conduct the negotiations under duress."

Younger employers wish to get the 35-hour week initiative

The "young" employers' organisation, CJD (Centre des jeunes dirigeants d'entreprises), which is often thought of as the "henchman" of the CNPF, was critical of the employers' organisation's position, which was based on a tactic of non-participation. As far as the CJD is concerned, "objection to the 35-hour week statute is not an issue, given the fact that it is based on a democratic decision." Given this fact, the issue is not the approval or rejection of the 35-hour week but rather an attempt to turn it into an opportunity to reform the labour market and improve the competitiveness of companies. The organisation proposes to introduce more flexibility into companies by requesting that as a parallel measure to the implementation of the 35-hour week, working hours be systematically calculated on an annual basis.

Commentary

The French industrial relations system is experiencing a severe crisis, a fact that has not escaped the notice of the various participants. The Government is attempting to reassure the employers while at the same time keeping its election pledges and exerting an influence on the "European social model." Employers disagree on the position they should adopt. The legitimacy of the CNPF employers' confederation comes largely from the role it plays in social dialogue; it represents the interests of companies and many bosses are not willing to get caught up in a sort of "cold civil war" in labour relations. The unions, which are especially active this month in preparation for elections to the industrial tribunals (FR9711175F), do not wish to see either a crisis of representativeness in employers' associations or, for the most part, splintered negotiations at company level where the balance of power is less favourable. The unknown factors affecting the future of industrial relations, if not dispelled, could at least be clarified over the coming weeks by the election of the new president of the CNPF, the manifesto on which he or she will be elected and the content of the working time bill due to be put before Parliament early in the new year. (Alexandre Bilous, IRES)

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