Social partners begin talks on vocational training reform

Having completed reform of the labour market in January 2013, social partners in France have opened negotiations on the reform of vocational training. The government has requested the talks and hopes to publish draft legislation at the end of the year. The vocational training system has come under fire on a number of fronts. It has been accused of being too expensive, lacking transparency and equality, and not targeting the workers most in need of training.

Background

The French vocational training system has been described by Labour Minister Michael Sapin as being in ‘a time-worn state’. Companies with 10 or more employees have, since the system was established1971, been compelled to contribute a percentage of their payroll costs to the financing of vocational training. As shown in the table, in 1991 this obligation was extended to businesses with fewer than 10 employees.

Money contributed by French companies is allocated to different schemes. Some goes to the individual training leave (CIF) scheme, while some pays for the individual right to training (DIF) scheme. The money goes to the schemes via the Fongecif, a group of intermediary organisations managed by the social partners, and by its Joint Registered Collection Agencies OPCA.

Contribution rates vary according to company size and the different programmes they use. However, companies may deduct what they have spent on direct training for their workforce from their contributions. Training plans are drawn up in consultation with employee representatives.

Contributions by companies – % of payroll costs
Company size Overall contribution Allocated to CIF Allocated to professional training and DIF Remainder allocated to the training plan
20 or more employees

1.60%

0.20%

0.50%

0.90%

10 to 19 employees

1.05%

0.00%

0.15%

0.90%

Fewer than 10 employees

0.55%

0.15%

0.40%

As well as this obligation to finance vocational training, the French Labour Code (Article L. 930-1) stipulates that employers must make sure employees receive training that fits them for their position. The French Court of Cassation goes to great lengths to ensure the rules are followed.

A system lacking in transparency and equality

The vocational training system is worth more than €31.5 billion per year according to a report (in French, 1.42MB PDF) published in November 2012 based on an analysis by the Ministry of Labour’s Bureau for Research and Statistical Studies (DARES). The data showed €6.5 billion of the funds were managed directly by the social partners.

The authors suggested the system was ‘too diverse’ to efficiently manage training needs. It concluded that the main beneficiaries were people who already had qualifications and a job with a large company. It said job seekers, young people, the less qualified and those employed in SMEs were losing out.

These perceived failings have been criticised in a number of studies. A report (in French, 6.39MB PDF) on vocational training policy published in September 2013 by the General Inspectorate of Social Affairs (IGAS) highlights the fact that vocational training benefits only 12.5% of the unemployed.

Social partners have responded to the accusation that vocational training is not targeting those whose needs are greatest. They reached agreement on a Joint Fund for Safeguarding Career Paths (FPSPP) (FR0912019I) in 2009. This fund uses part of the money paid by businesses under the vocational training scheme to finance training projects aimed at priority groups, spending €800 million in this way in 2012. In the past two years, around 80% of those benefiting from the FPSPP were job seekers. However, the public authorities, which played a major role in ensuring that FPSPP directed its funds towards this group, have felt it necessary to go one step further and to ask the social partners to overhaul the vocational training system completely.

Another problem is that the system has a large number of financial contributors and stakeholders, which makes it less than transparent.

The social partners are also regularly accused of using some of the money collected as vocational training contributions to finance their own activities. A parliamentary report produced in 2012 said €60 million each year was being used in this way.

Individual training accounts

The social partners held their first negotiating session on 24 September 2013, with the aim of reaching agreement on the reform of vocational training before mid-December 2013. One of their main tasks will be to define how the new individual training account will work. It was created through a national interprofessional agreement signed by the social partners on 11 January 2013 (FR1302011I).

This scheme should allow all employees to build up training entitlements, and should ensure that these are retained even if a person becomes unemployed or changes employer.

The roadmap for the social partners was drawn up by the Ministry of Labour. On 8 July 2013, the ministry provided them with a policy document (in French, 133KB PDF) which outlined the areas for negotiation. The other key focus of the reform is to review the compulsory financing of the scheme by employers. For some companies it is seen simply as ‘obligation to spend money’. It appears to many that the training system has become distanced from its ultimate aim, which is to ensure the employability of the largest number of workers.

In parallel, the Government of France has initiated two quadripartite consultations. The first, dealing with the individual training account for 28 million workers, will involve representatives of the state, the social partners and the regions, which are responsible for co-financing vocational training. The other will focus on the apprenticeship system, and will involve representatives from the same groups, with additional input from the chambers of industry and commerce, and the chambers of recognised trades.

Reaction of the social partners

On the trade union side, the three ‘reformist’ unions – the French Democratic Confederation of Labour (CFDT), French Christian Workers’ Confederation (CFTC), and the French Confederation of Professional and Managerial Staff – General Confederation of Professional and Managerial Staff (CFE–CGC) – are ready to embrace the far-reaching reform.

The General Confederation of Labour – Force Ouvrière (CGT-FO) does not believe this is a ‘moment of truth’ for vocational training. It says the full benefits of the 2009 reform have not yet been realised.

Meanwhile, the Movement of French Enterprises (MEDEF) says it is not opposed to a fundamental reform of the system. However, it says businesses should not be required to make any further financial contribution, especially since they are feeling the additional strain of pension payments under recent reforms (FR1309011I).

Commentary

It is difficult to evaluate the likely scale of reform because many of the players involved in the vocational training system will resist change. The social partners will only be able to influence the part of the system which they finance – €12.5 billion out of a total €31.5 billion. The remainder will be the responsibility of other decision-makers such as the state and the regions. Nevertheless, the players have it in their power to shape the future of flexicurity in France, with the aim of ensuring the country has a more employable workforce.

Frédéric Turlan, IR Share

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