2000 Annual Review for France
This record reviews 2000's main developments in industrial relations in France.
There were no significant elections in France in 2000. The "cohabitation" between a right-wing President, Jacques Chirac, and a left-wing government led by Prime Minister Lionel Jospin continued, pending the town and city council elections in 2001 and particularly the general and presidential elections in 2002. Social and industrial relations issues frequently dominated the political debate between the presidency and the government. The reduction of working time introduced by recent legislation (see below under "Working time") - and its moderating influence on pay increases and consequences in terms of the total number of hours worked at a time of strong economic growth - was a significant topic for debate. Social protection - particularly unemployment benefit and the mechanisms for access to, and funding of, pension schemes - was another bone of contention, especially in terms of their link with taxation and equal treatment of employees. A new debate on the respective roles of the state and the social partners also continued, both cutting across the abovementioned themes and as a separate debate in itself.
Statistics on the number of collective agreements and the level at which they were negotiated in 2000 will not be available until June 2001. However, in 2000 the quantitative aspects of bargaining was arguably of less interest than a number of new developments in the environment shaping bargaining. In particular, two critical factors introduced new and distinctive features into the process of collective bargaining: negotiations on the reduction of working time following the adoption of legislation introducing a statutory 35-hour working week (see below under "Working time"); and a debate over a new balance of power in industrial relations, at the employers' initiative (see below under "The organisation and role of the social partners").
The reduction of working time has had many repercussions in terms of pay and pay bargaining. First, hourly wages have risen proportionally to the reduction of working time (ie, workers are still receiving the same wage for a 35-hour week as they received for a 39-hour week, thus increasing the hourly rate). This is particularly noticeable for employees paid the statutory national minimum wage (salaire minimum interprofessionnel de croissance, SMIC), the monthly level of which has remained unchanged (despite the number of working hours in a month being cut) due to government subsidy (FR0007177N). Second, collective agreements on working time reduction have contained various clauses relating to wages - such as temporary pay freezes, amendments to bonuses, etc - which have had the combined effect of moderating rises in individual pay. Consequently, the effects of pay bargaining proper have been difficult to distinguish from the diverse ways in which working time has been reduced.
The pattern of bargaining on working time has influenced on the outcomes of wage negotiations. In its overview of 2000, the National Institute of Statistics and Economic Studies (Institut national de la statistique et des études économiques, INSEE) identified two distinct periods in terms of the development of employees' purchasing power. In the first six months of the year, the effects of the negotiations on working time were strongly felt, leading to a 0.1% drop in purchasing power (taking inflation into account), a situation which fuelled political debate on the harmful effects of working time cuts on income levels. In the second half of the year, purchasing power is thought to have risen by 0.6%, in spite of inflation picking up speed. It is thought that this was due to the risk of labour shortages in some sectors and companies' improved economic performance, which led to "pragmatic" pay rises (FR0009191F).
Pay thus re-emerged as a key issue in bargaining in the latter part of the year. According to the government, although individual wage rises remained moderate in 2000, the increase in the number of employees in both the private and public sectors led to a 4.5% increase in the overall paybill. The forecast for 2001 is for a rise in purchasing power as a result of the three-pronged effect of a fall in inflation, the ongoing risk of labour shortages in certain sectors, and the declining importance of wage moderation linked to the reduction of working time (however, around 380,000 new jobs are expected to be created in 2001, distinctly lower than the level witnessed in 2000).
The SMIC was raised by 3.2% as of 1 July 2000, which meant that the gross hourly rate was raised to FRF 42.02. Gross monthly minimum pay was therefore FRF 7,101.38 for 169 hours of actual working time (FRF 5,609.38 after social security deductions). The monthly basic pay index for all employees (l'indice du salaire mensuel de base, SMB) grew by 0.7% in the third quarter of 2000, and 1.9% for the preceding 12-month period. The hourly basic pay index for manual workers (salaire horaire de base des ouvriers, SHBO) rose 1.1% over the third quarter of 2000 (of which 0.3% was traceable to the reduction of working time). Over the year to this date, it rose by 5.3%. The consumer prices index (for all households and excluding tobacco prices) rose 0.5% in the third quarter of 2000, and by 2.2% between November 1999 and November 2000.
In the public sector, negotiations on the reduction of working time began in 2000 without reaching a conclusion (FR0003151F). Wage negotiations carried out at the end of the year were also fruitless (FR0012108N). The government unilaterally awarded a 0.5% pay rise in December 2000.
Since the initial pilot 35-hour week law of June 1998 (FR9806113F), which encouraged negotiations on the issue, bargaining has been largely dominated by the reduction of working time. Since January 2000 (FR0001137F), the second law has governed the move to the statutory 35-hour working week for companies with more than 20 employees. Negotiations on this theme generally took place at sector level in 1999 (FR0007178F), and bargaining then continued at company level in 2000.
As of the end of November 2000, 42,805 agreements on the reduction of working time, covering 4.6 million employees, had been concluded since June 1998. These agreements had led to the creation or retention of 251,915 jobs. Around 90% of agreements had been signed by all the trade unions operating within a given company. The average working week was 36.8 hours at the end of September, which was 0.5% shorter than it had been the previous quarter, and 4.1% less than it had been 12 months previously. Weekly working time was less than 36 hours for over half of full-time employees in companies with 10 or more staff (compared with 15% a year previously).
Despite the demands of certain small business employers' associations, the government has refused to consider an amendment of the 35-hour week legislation or a postponement of the date when it becomes applicable to small and medium-sized enterprises (SME s) in January 2002 (FR0101117N).
The 35-hour week legislation provides for two kinds of working time reduction agreement: "offensive" job-creating accords; and "defensive" job-safeguarding accords. Current favourable economic conditions partially explain why the vast majority of agreements concluded so far on the reduction of working time have been "offensive" in nature. Fewer than 10% of agreements are of a defensive nature, in that they provide for job retention and include job security clauses.
Training and skills development
No figures are yet available on the content or extent of bargaining over training and skills development in 2000. In 1999, negotiations on training had intensified, mainly at sector level, often linked to the reduction of working time. Agreements dealt with issues such as adapting employees to changing skills needs, improving job opportunities for young people, developing training in SMEs and offering lifelong learning. At company level, bargaining activity was limited, with training dealt with in under 4% of agreements.
Apart from the second law on the reduction of working time adopted in January 2000 (see above under "Working time"), there were two noteworthy new laws passed in 2000. In October, a law against discrimination (on sexual, racial, physical grounds, etc.) was passed (FR0011198N), which should bring French law into line with new EU anti-discrimination legislation. The government passed a law on sexual equality in the workplace in November 2000, including an article repealing the ban on night work for women (FR0010196F), in order to comply with EU sex equality legislation. This section of the law provoked strong opposition from political and trade union quarters, although there had been numerous exemptions from this ban.
A bill on employee savings schemes (FR0011103F) passed parliamentary first reading stage in October, splitting the governing coalition. Some saw it as a means of bolstering employees' ability to have access to durable and secure savings options (pension funds), while others feared that it would make it easier to challenge "pay-as-you-go" pension schemes to the advantage of personalised savings. The debates begun in 2000 should be translated into the final version of the law in 2001, or be postponed until after the elections in 2002.
The organisation and role of the social partners
In late 1999, the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), the principal employers' association, launched an initiative calling for talks with trade unions over the "overhaul of the industrial relations system" and a better demarcation of social partner and government jurisdictions (FR9912122F). It argued that the current regulations are obsolete and called state intervention under current circumstances "inappropriate", basing its argument on the example of the recent laws on the reduction of working time in order to win over its supporters. It invited the unions to join in a more active bargaining process, which should reduce the state's capacity for initiative, and limit the "favourability principle" (whereby sector-level negotiations may only improve the guarantees stipulated in the law, just as company-level negotiations may only improve on guarantees provided for in sectoral agreements). To encourage unions to participate in talks, MEDEF threatened to end its involvement in a large number of joint employer-union management bodies that run much of the social protection system. The subsequent negotiations on the UNEDIC unemployment insurance scheme (see below under "Other relevant developments") thus took place in conditions sometimes described as "blackmail" by some unions.
In February 2000, the five representative trade union confederations agreed to respond positively to MEDEF's proposal and work with MEDEF, the General Confederation of Small and Medium-sized Enterprises (Confédération générale des petites et moyennes entreprises, CGPME) and the Craftwork Employers' Association (Union professionnelle artisanale, UPA) on drawing up a joint framework for the overhaul of the industrial relations system (FR0002143F). The union confederations involved are the General Confederation of Labour (Confédération générale du travail, CGT), the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the General Confederation of Labour-Force ouvrière (Confédération générale du travail - Force ouvrière, CGT-FO), the French Confederation of Professional and Managerial Staff-General Confederation of Professional and Managerial Staff (Confédération française de l'encadrement - Confédération générale des cadres, CFE-CGC) and the French Christian Workers' Confederation (Confédération française des travailleurs chrétiens, CFTC)
While all parties involved agreed on the main principle of redesigning the industrial relations system, their objectives differ profoundly. The employers are seeking to obtain both greater autonomy for the social partners and greater flexibility in the adaptation of those measures pertaining to industrial relations which would remain the state's responsibility. Individual sectors and companies might, according to MEDEF, thus be able to apply the overall principles using diverse adjustments appropriate to varying economic circumstances. MEDEF believes that sectoral and company levels of bargaining should be autonomous and equal. The unions, however, are concerned that this type of structure would disadvantage employees in the weaker companies, and limit the scope of sector-level agreements.
The industrial reform talks were to take the form of eight sets of parallel negotiations. During 2000, talks began on unemployment insurance, supplementary pensions, occupational health, vocational training and collective bargaining . Agreements were reached on unemployment insurance and occupational health, although they were not signed by all unions (see below under "Other relevant developments"). Employers have had to take account of stronger than expected resistance from unions, which are enjoying a more powerful negotiating position due to the economic recovery.
The representative status of trade unions became a topic of interest in 2000 (FR0006170F). The signing of important collective agreements by unions with relatively little presence in the industries concerned in the course of negotiations on the reduction of working time (as in metalworking - FR9808129F) raised consciousness among employees and the authorities about this issue. The industrial relations reform debate launched by MEDEF contains implicit consequences for the number and size of French trade unions.
Data relating to the number of working days lost in 1999 was published by the Ministry of Employment and Solidarity in November 2000 (FR0012113F). It stated that there was a marked rise in the number of working days lost due to strikes in 1999, compared with 1998. Almost half of all disputes in 1999 were mainly related to either pay or employment. However, the reduction and reorganisation of working time formed the basis for a quarter of the disputes.
Overall, there were very low levels of open conflict in France during 2000. However, there was some resurgence in disputes resulting from the negotiation of the reduction of working time, and sometimes from pay bargaining (FR0009191F). The public sector remained a sensitive site for industrial action, as underlined by a dispute in the Ministry of Finance in the spring, over the modernisation of public services (FR0004157F). A strike was staged in the state education sector in March 2000 (FR0004153N). In May, security guards won a number of safety-related concessions following a two-week strike (FR0006169N). Over the summer, several isolated strikes took place in companies slated for closure, in which employees threatened the use of destructive methods of protest (such as explosions or poisoning rivers) against their employer's plans (FR0008186F). Lorry drivers again demonstrated their capacity for conflict in the autumn during the rapid oil price rises (FR0010197F).
National Action Plan (NAP) for employment
France's NAP for 2000, in response to the EU Employment Guidelines for 2000, was the subject of numerous discussions between the social partners and the government before being submitted in May (FR0005164F). Preparations for the 2000 NAP were launched in autumn 1999 by discussions, under the auspices of the Committee for Social Dialogue on European and International Issues (Comité du dialogue social pour les questions européennes et internationales, CDSEI). In 2000, for the first time, a review of the contribution made by the social partners to the NAP is included in the Plan itself.
The reduction of working time is one of the central planks of the government's employment policy. Another, the youth employment scheme instituted in 1997, is set to end in 2002 and question of transforming the jobs involved in this scheme into permanent posts began to be raised in 2000. Over 280,000 young people have been employed in these state-sponsored jobs. The effects of a range of new labour market conditions on the future of the people in these schemes are still uncertain, even though it appears as if young people are one of the groups most advantaged by the recovery of employment levels. However, youth unemployment is still very high in France.
Equal opportunities and diversity issues
The two main legislative developments in the equal opportunities and diversity area were the adoption of a law against discrimination on a wide range of counts, in October 2000, and the repeal, in November 2000 of the ban on women's night work (see above under "Legislative developments"). The first piece of legislation will significantly widen French anti-discrimination law. It expands Article L.122-45 of the Labour Code - which currently protects job applicants and employees from discrimination based on origin, gender, political views, trade union activities and religious beliefs - to include sexual orientation, as gay and lesbian rights organisations have been demanding. Additionally, new grounds include physical appearance (height and weight) and surname.
The ban on women's night work was finally lifted in November 2000. Although numerous exemptions to the statutory ban operated in practice, France was required to erase it from its legal framework by the European Court of Justice.
In March, the latest report by the National Consultative Committee on Human Rights (Commission nationale consultative des droits de l'homme, CNCDH) revealed a rise in racist attitudes and anti-immigrant feeling in France. The Prime Minister responded by announcing legislative changes to toughen up the fight against racial discrimination, some of which relate to employment (FR0004155N).
Information and consultation of employees
Plans for legislation enhancing the information and participation rights of employees and their representatives when redundancies are planned were postponed several times during 2000. They are to be reviewed during the next parliamentary session in 2001, in debates surrounding what is referred to as the "social modernisation" bill (FR0101121F). This legislation has been delayed several times and some of its provisions have been partially introduced into other legislation. Amongst its provisions is a proposed obligation that, in order to make redundancies, a company would have to have reduced the working week to 35 hours and not have staff working overtime.
New forms of work
The number of low-paid precarious jobs grew in 2000. It is currently difficult to separate the effects of any deliberate policy of favouring insecure forms of employment from those of a recruitment policy involving prolonged trial periods during a phase of rising employment. The social modernisation bill (see above under "Information and consultation of employees") provides for stronger sanctions for companies abusing temporary employment agency arrangements.
In terms of sectoral developments, in late June 2000, a protocol agreement was reached by the Minister for the Civil Service and State Reform and trade unions on "the progressive elimination of insecure employment in the three branches of the civil service, and improved management of employment within the public services" (FR0007175N). The deal gives official civil servant status to many workers currently on fixed-term contracts.
Other relevant developments
In the context of their industrial relations overhaul initiative (see above under "The organisation and role of the social partners"), employers' associations announced in late 1999 that issues relating to the joint management of social protection funds should be the subject of detailed negotiations during 2000. Several topics were opened up for negotiation.
One set of talks, on the reform of the UNEDIC unemployment insurance scheme, was concluded in October following lengthy and difficult negotiations (FR0101114F). The agreement stipulates that from July 2001, unemployed people will have to comply with stricter regulations on seeking work. They must sign a "back-to-work assistance plan" (Plan d'aide au retour à l'emploi) aimed at galvanising their attempts to find work. In exchange for this, the progressive reduction in benefit levels as unemployment continues has been abolished, and the employment qualification period necessary for eligibility for benefit has been shortened. Further, turning down jobs offered can be sanctioned more severely than before.
The government intervened directly in the negotiations on this topic, rejecting the terms of the original agreement reached in July 2000 (FR0006171F), and obliged the two sides to renegotiate both its content and its financial element (FR0010195F). The new terms of the agreement were vehemently criticised by the two union confederations which did not sign it, CGT and CGT-FO. They objected to the provisions which oblige unemployed people to accept jobs that are well outside their experience and previous pay range on the grounds of an active back to work policy. In the meantime, due to the rise in the number of people in the workforce and the reduction in that of unemployed people receiving benefit, the unemployment insurance fund has moved into surplus.
Within the framework of the industrial relations overhaul talks, an agreement on occupational health was signed on 13 December by employers' associations and CFDT, CFE-CGC and CFTC (FR0101116N). The agreement provides for negotiations at sector level on the frequency of medical check-ups with industrial doctors, depending on the level of danger in the profession worked. It also provides for the creation of regional occupational health observatories, especially dedicated to SMEs. A committee was also set up to examine the possibility of general practitioners being involved in providing occupational healthcare. CGT and CGT-FO expressed opposition to this agreement, which they fear will lead to a worsening of the conditions of access to industrial doctors.
Negotiations also opened, again within the context of the industrial relations overhaul talks, on the subject of supplementary pensions for private-sector employees (FR0102132F). Employers want the contribution period required for entitlement to a supplementary pension to be extended to 45 years. The unions have opposed this idea, which directly challenges the right to retire at 60. The motivations of the unions vary, but in 2000 they were mutually compatible, and no consensus on this important topic was reached. This is a difficult and potentially strife-ridden subject. The unions argue that civil servants enjoy a more advantageous scheme, yet in 1995, civil servants took serious strike action in protest against proposed changes to their pension schemes. Employers can expect strong resistance on this issue, with the unions confident of strong support from their membership and other employees, who are very attached to the current pensions scheme.
2000 was rich in significant developments in the field of industrial relations, which have brought about substantial changes in employees' employment conditions and in the conditions in which bargaining occurs. In 20001, the recovery of employment levels should alter the overall conditions under which industrial relations are played out, over and above the procedural decisions taken by unions and employers' associations regarding the rules for negotiation in the industrial relations overhaul talks. Wages ought to rise more rapidly than in previous years. Young employees should soon become less restricted by unemployment than they have been over the past 20 years. The main unknown factor may well be the management in industrial relations terms of the exit from recession which is becoming tangible, despite the high rate of unemployment.