- Response to COVID-19
- Income support for workers
- Support of SMEs
- Working time flexibility
Partial activity is directed at companies experiencing:
- either a reduction in their usual working time
- or a temporary closure of all or a part of the company.
It is possible to implement partial activity when the reduction or the temporary suspension in the activity is due to:
- the economic situation
- supply difficulties
- a disaster or weather conditions of an exceptional nature
- the transformation, restructuring or modernisation of the company
- or any other exceptional circumstance such as the loss of a principal client
The principle is to compensate earning losses experienced by workers due to the reduction in their working time under the legal, conventional or contractual duration (within the limit of 1,000 hours per year and per worker, a quota that is laid down by ministerial order of 26 August 2013) while helping employers to fund this compensation.
Workers are granted an hourly differential, paid by the employer, equal to 70% of their gross hourly wage (approximately 84% of the net hourly wage). In any case, their remuneration cannot go below the statutory minimum wage. There is nothing to prevent an employer from compensating its employees in excess of 70% of gross salary if they can/wish to do so or if a collective or company-level agreement envisages such a measure. Workers placed under the partial activity scheme can benefit from training. In this case, the compensation is increased to 100% of the net hourly wage.
The employer receives an allowance jointly from the state and the unemployment insurance body.
During partial activity, the employment contract between the employee and the employer is only suspended. Therefore, the employee is still linked to his/her employer by the initial employment contract.
Before placing its employees under partial activity, the company must ask the labour inspectorate for authorisation. The labour inspectorate has 15 days to answer. Without response within this period, the authorisation is tacitly granted.
Partial activity is allowed for a maximum period of 6 months, with the option to renew once.
During the COVID-19 pandemic, the French government issued ordinances to allow derogation to the current partial activity (activité partielle) rules and to enlarge it in order to avoid redundancies.
Extension of short-time working to new categories of workers. The 'Extension du chômage partiel à de nouvelles catégories de travailleurs' ordinance enacts ‘emergency measures’ related to short-time working which was published in France’s official journal on 28 March (Ordonnance n° 2020-346 of 27 March 2020) . It temporarily modifies the rules on how certain employees (part-time workers, apprentices and individuals on professional training contracts) are compensated. The ordinance opens up the system to groups that are normally excluded (public companies, individuals who work from home). As a result, the short-time working scheme covers all employees of the private sector. With the new provisions adopted to cope with the COVID-19 crisis, the partial activity allowance paid by the State to the company - co-financed by the State and by the joint body that manages the unemployment insurance scheme (Unédic) - is no longer a lump sum, but is proportional to the remuneration of employees placed in partial activity. It also modifies the rules for employees that do training during the short-time working period as well as short-time working in the case of protected employees (for example staff representatives). The emergency measure expires on 31 December 2020 at the latest.
Public allowance received by the employer. From 1 March 2020 to 31 May 2020, the partial activity allowance received by the employer was equal to 70% of the employee's gross hourly pay (with a minimum hourly rate of €8.03 and a maximum hourly rate of €45.67). This represented an increase in public allowance dedicated to short-time working periods. The 'remainder payable' by the employer, i.e. the amount of the remuneration which the employer must pay to the employee, was zero for all employees whose remuneration is less than 4.5 gross SMIC (€45.67 per hour or €6 927.39 per month). From 1 June 2020, in order to take into account the partial resumption of economic activity, the public allowance has decreased: companies will thus be reimbursed 60% of the gross salary, instead of the previous 70%. Sectors subject to particular legislative or regulatory restrictions due to the health crisis (tourism, hotels and restaurants, the sports and cultural sectors) are not concerned by this decrease.
Compensation of earning losses experienced by workers. During the partial activity, the employee still receives 70% of his gross remuneration (approximately 84% of the net salary), and at least the net hourly SMIC (€8.03). The measure applies whatever the job tenure, form of the employment contract (open-ended, fixed term, apprenticeship, etc.) or working time (part-time or full time) are. As a result, part-time workers enjoy the same rights to minimum monthly remuneration as full-time employees. However, apprentices and employees on a professional training contract will be compensated with 100% of their usual remuneration, meaning the minimum net hourly SMIC (€8.03) might not apply in their case. Specific measures are planned for employees of private employers (cleaning ladies) and childcare assistants (who look after young children) who are usually paid by the hour with a job voucher system. The partial activity allowance paid to the employee is a replacement income: it is not subject to social security contributions; it is subject to the CSG and the CRDS at a rate of 6.70% after a deduction of 1.75%.
Employees who, during the period of short-time working, follow a training course are normally compensated by their employer with 100% of their remuneration. For training programmes agreed between employees and employers after the entry into force of this ordinance (Ordonnance n° 2020-346 of 27 March 2020), employees will only receive 70% of their remuneration. When short-time working is applied for all employees at a company, establishment, department or workshop to which a protected employee is assigned or posted, the employer’s decision is binding on protected employees. As a result, until the end of the health crisis, the employer does not have to obtain the agreement of protected employees to put them on short-time working.
Administrative authorisation to place workers under partial activity : Companies now have up to 30 days from the day they placed their employees in partial activity to file their application online, with retroactive effect. The labour inspectorate has 48 hours, instead of 15 days in normal circumstances, to answer. Without response within this period, the authorisation is tacitly granted. Partial activity is allowed for a maximum period of 12 months, instead of 6 months. These provisions apply up to 31 December 2020.
Temporary derogation from working hours in essential services. Following consultation with the social partners, in certain sectors (agri-food, large-scale distribution, undertakings which contribute to the activity of hospitals) particularly necessary for the security of the nation or the continuity of economic and social life, undertakings in these sectors will be able to derogate from the rules on working hours, weekly rest and Sunday rest. The list of these sectors will be fixed on a case-by-case basis by decrees.
The Ordinance provides for many possible exemptions, which may vary according to the sector of activity. Several decrees specify the sectors concerned and the applicable derogation regimes. The employer may:
- Unilaterally derogate from the rules of public policy on working hours and from the applicable contractual stipulations. It may thus do so by reducing the daily rest period to nine consecutive hours, subject to a compensatory rest period equivalent to the length of the rest period not taken. (It is currently set at 11 a.m., unless an exception is made);
- Increase the maximum daily working time to 12 hours (it is now set at 10 hours, unless there is a derogation);
- Fix the maximum average weekly working time at 48 hours over 12 consecutive weeks or 12 months for certain farmers or agricultural undertakings (today it is fixed at 44 hours, unless there is a derogation);
- Set the absolute weekly maximum at 60 hours (currently set at 48 hours, unless there is a derogation);
- Set the maximum daily working time of a night worker at 12 noon, subject to the granting of a compensatory rest equivalent to the duration of the overrun (today it is set at 8 a.m. with the right to an equivalent rest, unless there is a derogation);
- Set the maximum average weekly working time of a night worker at 44 hours over 12 consecutive weeks (today it is set at 40 hours, unless there is a derogation).
- National funds
Public employment services
Unemployment insurance body (UNEDIC): funding
Employer or employee organisations
Before implementing partial activity, in companies employing more than 50 workers, the employer has to consult the employee representatives on economic reasons, the activities concerned, the levels and methods of reduction in working hours, training activities considered. If there is no employee representative in the company, employees have to be informed about the implementation of partial activity in the company.
The employer has to ask the labour inspectorate for authorisation. The labour inspectorate has 15 days to grant or deny authorisation (48 hours during the COVID-crisis period). This request for authorisation has to be accompanied by the opinion of the employee representatives. The employer also contributes through funding.
The DARES (direction of research, studies and statistics of the Ministry of Labour) publishes every three months data about the number of hours and expenses spent on partial activity, as well as the number of employees involved. Due to incomplete reporting in the automotive sector, the hours of partial activity consumed in this sector, in industry as well as in the total economy are underestimated. As a result, they are no longer broadcasted from the first quarter of 2015 and only sectoral data are now available. This does not apply to data related to the number of hours authorised, but not necessarily used, by the labour administration (see above). In light of this, one may for instance notice that, in the second quarter of 2017, in the construction sector, 660,272 hours of partial activity were used. During the same period, in manufacturing industries (without taking into account the automotive industry), 660,427 hours of partial activity were used.
Overall, partial activity has increased since the beginning of the 2008 crisis and has started to slow down by the end of 2009. In 2010, it reached its lowest level since the beginning of the crisis, but in 2012 it started increasing again. In 2014, almost 26 million hours of partial activity were used (- 5% in comparison to 2013). Each month, on average, about 61,000 workers were placed under partial activity with an average 35 hours reduction in their monthly working time (DARES, 2016). In 2015, more than 23 million hours of partial activity were used (10% less than in 2014). The decline is mainly concentrated in the last quarter of 2015. Each month, around 60,400 employees, which represent 0.4% of total paid employment, were affected by the partial activity, with an average 32 hours reduction in their monthly working time (DARES, 2017).
Research carried out on over 36,000 French companies (with at least 50 employees) using partial activity between 1996 and 2004 has shown that participation in the scheme does not reduce layoffs when companies face an economic downturn. This is especially so in cases of long duration of partial activity (Calavrezo et al, 2009). In addition, the uptake of partial activity tends to be an early indicator of dismissal that will follow. These results do not necessarily suggest that partial activity is an inefficient job security policy instrument. It may be the case that short-time working and layoffs play a complementary role to each other in addressing temporary economic difficulties.
As of 9 June 2020, 1,386,000 applications for partial activity had been filed, concerning 1,055, 000 companies and 13,300,000 employees according to the Ministry of Labour. More precisely, 11.8 million employees were likely to be placed in partial employment in the month of April but figures are subject to debates as the employer often asks for a broad authorisation for a certain number of employees, but does not necessarily use all of them. According to a survey carried out by the DARES (Ministry of Labour), at the end of April, 63% of employees were in a company that had placed at least some of its employees under partial activity, compared with 59% in March. The use of partial activity is higher among the smallest firms (76% in firms with 10-19 employees after 72% at the end of March) than among large firms (55% in firms with 500 or more employees after 51% at the end of March). The use of short-time working remains particularly high, with the same intensity as in March, in the sectors of transport equipment manufacturing (96%), accommodation and food services (96%) and construction (95%). It is much lower, although slightly increasing, in the food processing industry (42% after 37%), private education, private human health and social work (42% after 37%), energy, water, and waste management (38% after 35%).
Employees’ entitlements to unemployment benefits and future pension entitlements are not negatively affected in situations where they have been placed under the partial activity scheme.
Pursuant to Law n°2013-504 of June 2013 on job security, the partial unemployment scheme had been reformed (and renamed into partial activity). This reform was supposed to simplify the previous scheme that was considered too complex as different levels of compensation were cumulated throughout different reforms. This new scheme was also supposed to provide better compensation for workers and advantageous support for companies.
Partial activity is the most significant measure used to deal with the potential and huge employment impacts of the COVID-19 crisis in order to avoid collective redundancies and make it easier for companies to relaunch their activity at the end of the crisis. That is why the measure was amended and strengthened since March 2020. Beyond, a bill adopted by the Parliament on Wednesday 10 June 2020 aims at encouraging the recovery of economic activity with a new and additional system of partial unemployment, called ARME (activité réduite pour le maintien dans l'emploi). The aim of the new scheme will be to enable companies, through the negotiation of a collective agreement, to reduce the working hours of their employees by receiving State financial aid over a longer period (probably one or two years). In return, employers will have to commit themselves to maintain jobs. A decree, not published yet, is to detail the rules applicable to this new scheme.
Even if the measure proves to be efficient to safeguard employment in a crisis context, it is very costly and negatively impacts on public expenses. In addition, the application of this measure may give rise to fraud on the part of employers asking their employees to work during periods of partial activity, as shown by the COVID-19 crisis.