French National Action Plan on employment adopted

The French Action Plan for Employment, 1998 was adopted by the Council of Ministers on 15 April 1998 in response to the EU Employment Guidelines, and was submitted on the very same day to the European Commission. Trade unions and employers, which had been consulted only rather belatedly on the content of the document, expressed their desire to add - if possible before the June Cardiff European Council meeting - several contributions of their own.

Following the special Employment Summit in Luxembourg in November 1997 (EU9711168F), EU Member States agreed a set of Employment Guidelines designed to provide a framework for national action under four main "pillars" - employability, adaptability, entrepreneurship and equal opportunities. Each Member State was to draw up a National Action Plan (NAP) for consideration at the June 1998 European Council meeting in Cardiff. The French Action Plan for Employment, 1998 (Plan français d'action pour l'emploi 1998) was adopted by the Council of Ministers on 15 April 1998 and submitted to the European Commission on the same day.

Employers and trade unions were invited to two meetings during the development stage of the French NAP. The first of these, on 3 March, was convened by the Minister for Employment and Solidarity to sound out the positions of the social partners. Then, on 3 April, the text submitted to the Council of Ministers was presented to them. There was general consensus that this development period could have been more satisfactory and should have been preceded by longer deadlines to facilitate the preparation of the Plan.

The NAP document comprises three parts, covering: the macroeconomic framework and the job situation in France; French employment strategy; and details of various measures set in the context of "guidelines."

The macroeconomic framework and job situation in France

The French Government's Plan considers that the labour market situation remains serious despite real signs of improvement: "Unemployment reached a historic high of 12.6% in June 1997 and then stabilised during the second half of 1997. In January 1998, it began to drop and fell to 12.1%. This decrease in the unemployment rate can be explained by an increase in the number of new jobs despite the fact that France has a working population which is growing more rapidly than that of the majority of countries in the European Union. Recent progress should not however conceal the structural imbalances affecting the French labour market: the scale of unemployment among the least qualified workers, the high number of long-term unemployed people, the difficulty of integrating young people into the labour market and the appearance of certain types of insecure jobs."

The document states that: "the recent progressive improvement of the job situation is the result of a return to growth accompanied by increased job creation. The threshold above which the French economy creates jobs in the private sector is today close to 1.5% whereas in the 1980s it was above 2%. Since the beginning of the 1990s France has experienced a period of slow growth ... This can in part be blamed on ill-adapted economic policy in continental Europe in the early 1990s, which resulted in particular, from bad coordination of economic policies. In a context of placing European public finance on a sounder footing, more favourable monetary conditions since 1996 (low interest rates, appreciation of the dollar) have stimulated economic recovery, which was initially led by exports. Since the summer of 1997, growth has accelerated due to the recovery of domestic demand. Growth reached 3.2% with annual variation in the last quarter of 1997. Increased confidence among households, which is particularly due to the initial effects of the youth employment plan, has contributed significantly. The recovery was based - in the second half of 1997 - on the upturn in household consumption and more recently on increased investment. According to management forecasts, investment in the manufacturing sector should increase by 10% in 1998. Strengthening domestic demand should enable 3% growth to be attained this year, despite the negative impact of the financial crisis in certain Asian countries."

Nevertheless, the Government's text recognises that: "France is aware that the necessary return to economic growth will not in itself be sufficient to lower unemployment significantly and permanently. France has therefore developed a proactive employment strategy."

The French employment strategy

The French employment strategy has been developed around three main principles: stronger growth, improved growth-driven job creation and growth which is of benefit to all.

  • Growth is an essential condition for the creation of jobs. France aims to increase permanently its growth potential through a policy of stimulating innovation (new technologies, "information society"), through the emergence of new market and non-market jobs and the creation of new enterprise with special emphasis on small and medium-sized companies. To strengthen the recovery of growth, France will attempt, in cooperation with its European partners, to reduce the overall fiscal burden and will pursue reforms to consolidate demand and support household purchasing power while at the same time keeping public expenditure in check.
  • To improve growth content, France is advocating a reorganisation and negotiated reduction of working hours as a way of modernising companies and creating jobs, and is continuing to try to find ways of decreasing indirect labour costs, especially unskilled labour. The creation of new jobs in the service sector to meet as yet unfulfilled needs will also help.
  • To ensure that regained growth benefits everyone, the Government wishes to: prevent long-term unemployment and tackle exclusion, in particular by developing personalised monitoring plans to offer "a new start" and to encourage people to make the transition from welfare to work; improve the ability of both young people and adults to integrate into employment at all stages in their lives through measures in schools, in the labour market and in companies; and strengthen policies of equality of opportunity between men and women by making access to employment for women easier.

These main objectives have been covered by the drawing up of four widescale measures, borrowed in their original form from existing job-creation plans and programmes to tackle exclusion.

1. Improvement of the ability of both young people and adults to integrate into employment

The objective is to offer a "new start" to young people and unemployed people before they become long-term unemployed. This "new start" is based on diagnostic and monitoring interviews and will take the form of personalised solutions adapted to the specific difficulties faced by each individual unemployed person:

  • an offer of employment, preceded when required, by an evaluation, guidance and job-search assistance phase; or
  • integrated vocational training within a personalised action plan; or
  • a personalised back-to work-plan. This will set out possible vocational training and a six-month contract will be drawn up with the recipient; or
  • a personalised "social plan" in cases where serious social problems hinder employment;

During the next five years, these plans should progressively apply to:

  • all adult unemployed before they have been out of work for 12 months or, on current figures, around 1 million people per year;
  • all young unemployed people before they have been out of work for six months or, on current figures, around 500,000 people per year; and
  • long-term unemployed people, as well as those on "occupational integration minimum income" benefit (Revenu Minimum d'InsertionRMI) or, on current figures, in excess of 1 million people. They will be included at the same time, since those that have already been hit by exclusion cannot be left by the wayside.

A new programme, known as "Road to Employment" (Trajet d'Accès à l'Emploi- TRACE), will offer young people faced with major social, family and cultural difficulties an employment integration programme of up to 18 months which will offer opportunities to review skills or to acquire basic skills and vocational qualifications. These young people will receive remuneration which differs according to each individual phase of the programme and also, when required, financial help from a specially created youth assistance fund. This programme will help 10,000 young people in 1998, rising to 60,000 within three years.

For adults, an experiment in cooperation with unions and employers will extend qualification contracts to people over 26 who have been unemployed for more than six months. This experiment will be subject to monitoring and evaluation, which will likely lead to intersectoral negotiations with a view to extending it across the board. This mechanism could apply to 25,000 people a year in the long run.

"Consolidated employment contracts" (contrats emplois consolidés- CEC) for adults, which were created for five years for the benefit of associations and local authorities to meet the unsatisfied needs of the community, will be rapidly increased over the next three years, rising from 90,000 to 200,000.

The European Social Fund will be particularly used to support, under the framework of objective 3, the personalised back-to-work plan, the setting up of local integration and job plans and the strengthening of the "welfare-to-work" mechanism.

Much is being done in the field of training projects for unemployed people in France. It is calculated that today, depending on the indicator used, some 15%-20% of young or adult jobless receive some kind of vocational training every year. This level is not reflected by the indicator produced by Eurostat (4% for France). However, both qualitative and quantitative improvements are desirable for work/training schemes. These improvements will be worked out in partnership with the unions, employers and local authorities involved.

Today, 53,000 young people still leave the education system each year with no qualifications. This situation must be rectified with an initial objective of reducing the figure to 45,000 within three years. On a wider scale, the Government will commit itself to reducing the number of people who drop out of other areas of training early. This is a situation which leads to young people who are insufficiently prepared for integration into employment.

2. Developing an entrepreneurial environment

There are five main aspects to this objective:

  • administrative procedures applying to companies are to be simplified;
  • financial assistance will be provided to young people with problems finding a job, who wish to start their own business. A personalised follow-up will also be offered to them. Up to 10,000 people could benefit from this project in 1998;
  • support will be given to small companies creating jobs through a FRF 10,000 net tax credit per job during 1998, 1999 and 2000;
  • jobs will be developed in new community services. The government job creation programme for young people (FR9709163F) aims to promote job creation in new areas to meet new needs which have not yet been satisfied by the market, especially in sport, culture, education, environment and personal services. The Government's plan aims at identifying demand for such services, and should enable permanent jobs to be created in the medium-term. The objective is to create 350,000 new jobs for young people by 2000, of which 150,000 by the end of 1998; and
  • fiscal policy will be altered to make the system of levies on pay favourable to employment. Since 1 January 1998, health insurance contributions have been moved from pay alone to generalised social contributions (contribution sociale généralisée-CSG) on all income (FR9712184F).The contribution burden is also being alleviated on the lowest pay rates while, at EU level, France supports reducing Value Added Tax on certain labour-intensive service activities (EU9803195N).

3. Encouraging the adaptability of companies and workers

Two main measures are envisaged to encourage greater "adaptability":

  • the creation of jobs and the modernisation of work organisation in companies through a reduction in working time. In the opinion of the Government, the new law guiding and encouraging companies to reduce working time through a reduction in the statutory working week to 35 hours in 2000, or in 2002 for those companies employing fewer than 20 workers, will lead to new negotiations both within companies and at a sector level and will encourage unions and employers to negotiate practical details (FR9804103F); and
  • bargaining arising from the new legislation will deal with working time, work organisation, job creation and pay increases at the same time. A second law will come into force in 1999, based on an assessment of agreements that have been reached.

4. Strengthening equal opportunities policies

The final main chapter of the Government's plan deals primarily with equality between men and women in the workplace and provides for:

  • easier access to bank loans for women who wish to start their own businesses;
  • a more even distribution of parental leave take-up between men and women;
  • organisation of a conference on the family in June 1998, which will examine new proposals to make family and working life more compatible, especially for poorer families; and
  • a three-year plan covering 1998-2000 will be set up to increase the number of people with disabilities taken on in the workplace.

Reactions from unions and employers.

The social partners reacted to both the way they were consulted and also to the content of the French plan. Unions and employers' associations alike complained about the lack of depth of consultation on the plan. They expressed their desire to add - if possible before the Cardiff summit - several contributions of their own.

Thus, the CFDT union confederation considers that even if two discussion sessions did take place, the actual drawing up of the plan was essentially done in interministerial meetings. Jean-François Troglic, in charge of international issues at the CFDT considers that "this is disappointing, setting aside any value judgement, since France is the driving force behind the European initiative on employment and given this fact France should have set an example and undertaken real research in partnership with the unions and employers." The CGT-FO also mentions the hurried nature of the development of the document and that the unions and employers were not fully involved. However, Jacques Pé, secretary in charge of international issues at the CGT-FO, stresses that "given the traditions of French trade unionism. it is difficult to consider cooperation between the various unions and employers in the drawing up of a common plan."

The central employers' organisation, CNPF, denounced the plan as a "governmental plan which did not reflect the social partners' views".

The content of the plan is in fact a rationalisation of national legal texts that have either already been adopted or are in the process of being adopted. Of all the points covered - be it integration of young people and adults experiencing difficulties in the job market, the modernisation of companies through a reduction in the statutory working time or a reduction in social contributions - nothing new was presented in the Government's plan. It is for this reason that the unions and employers repeated the same criticisms and suggestions that they had made before during debates on the bills corresponding to each of the plan's chapters. However, the CGT union confederation insisted that this stage of the European employment strategy, a by-product of the Luxembourg Employment Summit, should not appear merely as a review of national plans. For the CGT, resolving unemployment problems "should be based on another type of growth, based on an increase in household consumption, on an industrial policy (particularly for the automotive, banking, energy and telecom sectors), on the reduction of working hours in Europe, which will end job insecurity, temporary employment and child labour and which will respect social rights both in France and the rest of Europe".

Commentary

The drawing up of the French plan for employment has not given rise to great debate, nor to important public statements from the unions and employers' organisations. The event has gone relatively unnoticed in the media. There are several reasons for this. The first is the fact that the French contribution did not contain any specific new material compared with existing national plans in this area. This lack of debate is also linked to the conditions under which the document was drawn up: the initial exploratory consultation was held only a few weeks before the plan was due to be presented on 15 April. The phenomenon is also a result of a further reality. While monetary union criteria are international, social ones are national. What is more, the EU measures do not provide for any legal backing if the guidelines are not respected. The acting minister responsible for European affairs considers that political pressure should play a part: "there will be a reciprocal watchdog process among the 15 Member States of the European Union. I am convinced that no country, and of course not our own, will want to be seen as the naughty pupil in the European classroom."

It will be interesting to see if in the future this progressive goal, which the countries of the Union have set themselves, will change thinking and behaviour by making the social question a major issue in European construction. (Alexandre Bilous, Ires)

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