Private agencies authorised to provide employment placement services

The 2005 Law on Social Cohesion put an end to the state-run National Employment Agency’s monopoly over placement services for unemployed people in France. In July 2006, the National Union for Employment in Industry and Commerce, which is in charge of the bipartite unemployment insurance scheme, launched a European invitation to tender, aimed at entrusting private organisations with the placement of 46,000 jobseekers.

The reform of the public employment placement service, which was introduced in January 2005 with the Social Cohesion Law (FR0409104F), put an end to the National Employment Agency’s (Agence nationale pour l’emploi, ANPE) legal monopoly over placement services for unemployed people. The reform, which will allow private players to be involved in placing jobseekers, is aimed at speeding up access to employment and thus reducing unemployment benefit expenditure.

Controversy over pilot project

In February 2005, the National Union for Employment in Industry and Commerce (Union nationale interprofessionnelle pour l’emploi dans l’industrie et le commerce, UNEDIC) ran a pilot project with five private agencies to provide placement services for 7,000 jobseekers. The determining selection criterion of the jobseekers was the length of their benefit period.

The project provoked mixed reactions among those involved. Some trade union confederations, the General Confederation of Labour – Force ouvrière (Confédération générale du travail – Force ouvrière, CGT-FO) and the General Confederation of Labour (Confédération générale du travail, CGT), as well as ANPE’s management strongly criticised UNEDIC’s assessment of the project’s outcome.

ANPE management emphasised that it would have achieved a similar result using the same human and financial resources as the private employment agencies. It should be noted that the placement costs were very high, ranging from €3,000 to €6,000 for each jobseeker, greatly exceeding the budget of €650 per jobseeker allocated to ANPE for providing placement services.

Moreover, many observers considered that the project’s outcome did not match the financial investment involved, as only about half of the jobseekers found a job at the end of the pilot period. Furthermore, the selection of people who were chosen to participate in the project was biased in the sense that they volunteered to participate and were therefore highly motivated. These jobseekers were open to accept the rules that were imposed by the private employment agencies in order to minimise their risk of becoming long-term unemployed. At the time of the project, they were not yet in this situation and their short experience of unemployment thus predisposed them to finding another job quickly. This does not reflect the situation of the average jobseeker.

Outcome of tender process

Despite the reservations expressed concerning the real outcome of this pilot project, UNEDIC’s board decided to go ahead with the introduction of private agencies for the provision of employment placement services in July 2006. CGT and CGT-FO continued to be opposed to allowing private sector companies get involved in the area of employment placement services for unemployed people. However, the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT) was in favour of the experiment, ‘which should lead to the introduction of good practices and good results throughout the public employment service’.

Following the launch of the European invitation to tender, UNEDIC’s board validated a list of 17 private agencies on 8 September 2006. These agencies were selected to look after 46,000 jobseekers who face the risk of long-term unemployment, and to find a placement for them. Among the selected agencies are the following organisations:

  • two foreign placement agencies, the Australian company Ingéus and the British company A4E;
  • three major redeployment agencies which are already established in companies that have resorted to redundancies, namely Altédia, BPI and SODIE;
  • three temporary employment agencies – Adecco, Creyf’s and Vedior – who are entering this market and have won a fifth of it with 9,900 jobseekers.

It should be noted that associations which actively fight social exclusion are hardly represented among the service providers for job placements. Likewise, none of the training bodies that tendered have been selected and they strongly reacted against this decision. The regional organisations of training bodies (Unions régionales des organismes de formation, UROF) decided to legally appeal against this decision and to plead for the cancellation of the invitation to tender.

Appeal to administrative court

The administrative court in Paris instructed UNEDIC to provisionally postpone the signature of contracts with the selected private service providers following the appeals lodged by four training associations. The latter consider that they were wrongfully excluded from the selection procedure that was adopted by UNEDIC.

UNEDIC’s President, Annie Thomas, who is also CFDT’s national secretary, underlined that ‘if the courts rule that we should include these training bodies, we will do so’. Nevertheless, she also stated that the Ministry of Labour had specifically asked UNEDIC to exclude training bodies from the selection procedure.

On 16 October 2006, the administrative court refused the applications submitted by the four associations.

Carole Tuchszirer, Institute for Economic and Social Research (IRES)

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