France: Annual Review 2011

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  • Published on: 28 Listopad 2012



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The main issue of the year in the employment sphere was the increase in unemployment that reached similar levels to that in 1999 (an increase of 150,000 jobless in one year), with an unemployment rate of 9.3% by the end of 2011. To counter the economic downturn and the national debt crisis, the government announced measures to facilitate the recruitment of young people and older workers, and, from the summer, it successively adopted two austerity plans. Unions in France failed to mobilise against such austerity measures, as French citizens were awaiting the presidential election in April-May 2012, in order to give their opinion on the economic policy of the current government.

1. Political and economic developments

In February the election of representatives to the departmental assembly (“élections cantonales”) took place and resulted in a victory for the socialist party. This result was confirmed in September, with the partial replacement of the Senat, the second chamber of Parliament, which has swing over to the left for the first time. Despite these ballots, the State will still be lead by the President Nicolas Sarkozy, in what is now its last year of mandate, and its Prime Minister François Fillon. A small reshuffle within the government took place in February with the arrival of former Prime Minister Alain Juppé. A dramatic political event took place in May, when the managing director of the IMF, Dominique Stauss-Kahn was accused of sexual assault and rape on a female employee of the luxury Sofitel hotel of New-York. Seen widely by many in the polls as the future French president, he has been forced to leave political life. In October, more than 2,8 million of citizens participated in a ballot to choose the socialist candidate that will run for the presidential election of May 2012. They preferred François Hollande (56,57 per cent of the vote) to Martine Aubry, secretary of the socialist party and former Ministry of Labour.

The economy was hit by the economic and debt crisis as all European countries. The government has announced two austerity plans to counter the economic downturn. The unemployment rate increased over 9% to reach its 1999 level.

2. Legislative developments

The Parliament passed a law on 13th January 2011 setting quotas for the gender balance on company boards (FR1101031I). Within the next three years, 20% of a company’s board members must be women, rising to 40% within the following six years. This applies to companies quoted on the stock exchange (CAC 40), or those with more than 500 employees, with a turnover exceeding 50 million euro over the previous three years. Following on from a pre-election promise in 2007, President Nicolas Sarkozy has launched a new law that obliges larger companies – both private and some in the public sector – to distribute more company profits among workers. The text, adopted by the Council of Ministers on 25 May (FR1105011I), had been voted by parliament in July. According to the law, the companies within the scope of this law are those that employ at least 50 people, and that last paid a higher dividend to shareholders than the average amount paid on the two previous occasions. Companies employing fewer than 50 people are not bound by this law, but can voluntarily choose to introduce such a provision. Despite Nicolas Sarkozy announcing that workers would receive 1000 euro, an initial study on 40 companies showed that the average was about €300. The Ministry of Labour announced in January 2012, an average bonus of €420. The Parliament also adopted in the summer the law of 11th July 2011 which launched an in-depth reform of the organization and functioning of health services, detailing their missions, strengthens the role and protection of the occupational physician, finally improved medical surveillance employees within certain professions. The implementation of the recast directive on European Works Council was completed by the order of the 21 October, three months later than anticipated.

3. Organisation and role of the social partners

Two unions held their Congress in 2011. The Congress of Force Ouvrière (FO), the third largest French trade union, took place in February. FO appears more united than ever (FR1104011I) and re-elected Jean-Claude Mailly as Secretary General. FO has denounced again the reform of representativeness of 2008 and the cooperation between the General Confederation of Labour (CGT) and the French Democratic Confederation of Labour (CFDT). In November, the French Christian Workers’ Confederation (CFTC), whose existence is threatened by new rules on trade union representativeness, held its 51st congress (FR1111021I). The confederation, with 142,000 members, could loose its rights to negotiate and sign collective agreements in many sector and companies.

On October, workplace elections were organised in the public sector (FR1110021I), more than one year after the adoption of the Act on the renewal of social dialogue in the public sector (in French) (FR1009031I) that amended the rules on trade unions' representativeness in the three civil service divisions; national civil service, public hospitals and local government. Two million national civil servants and one million public hospital workers elected their representatives to nearly 5,700 staff representative bodies. The General Confederation of Labour (CGT) has emerged as the leading trade union (in French) in the three civil service divisions. The General Confederation of Labour – Force Ouvrière (CGT-FO) has, for the first time, got the majority vote in the national civil service. CFDT French Democratic Confederation of Labour (CFDT) and National Federation of Independent Unions (UNSA) saw their weight increased. However, the CFTC is disappearing from the negotiating table and the CFE-CGC will remain only in the interior and defence ministries.

The financing of unions and employer organisations was in scrutiny all the year. Firstly because the social partners have published, for the second time, their account as it is a legal obligation since the reform of the representativeness of 2008. Secondly, the National Assembly have decided, in June, to launch an inquiry commission on the financing of social dialogue. The draft bill presented by deputy Nicolas Perruchot was rejected within a commission and could not be published. Finally some newspapers had access to it and wrote articles to stress that public funds are used to support unions and that employer organisations used the funds dedicated to the professional training. On December, Nicolas Perruchot went further and proposed a draft bill on the financing of works council after several scandals, as in December, when a report of the Court of Accounts denounced the dramatic management of the Central work council of the RATP (Parisian public transportation). The law will oblige works council with a turnover of more than €230000 to ask for an assessment of their accounts.

4. Developments in collective bargaining and social dialogue

Official statistics on collective bargaining are published every June for the previous year so there are no data prior to June 2011 yet available. But the main observable trend through 2010, and one that will certainly be repeated in 2011, was the increase on collective bargaining to deal with the impact of the economic crisis (see below) and to comply with different commitment to negotiate on several new topics as employment of old workers, the extent to which work is arduous, wage equality between women and men.

 

The interprofessionnal level has experienced an intense activity of negotiations in 2011(FR1105031I). Social partners have negotiated eight national inter-sectoral agreements in keeping with the social agenda they adopted at the beginning of the year (FR1012021I). Half of the agreements concern amendments to social protection organisations managed by the social partners. A further four agreements concern the employment of young people.

 

Social partners on interprofessional level also pursue the negotiations that started in 2010, on the modernisation of ‘paritarism’ (with an agreement concluded in February 2012) and the modernisation of social dialogue and representative bodies, and in particular on the responsibilities assigned to staff representative bodies. For the latter issue, unions proposed jointly, in December, seven items (employment forecast, financial transfer within the group, outsourcing...) to build the new content of information the employer must give to the employees’ representatives. Meetings were held during the year but no agreement was concluded. Negotiation will continue in 2012.

 

At the sectoral level, a number of collective agreements need to be mentioned:

  • The agreement entitled ‘Renovation ofsocial dialogue within insurance’ that was concluded the 3rd January (FR1102011I). Under the new rules the financing of social dialogue has been set at a rate of €5 per worker, which is expected to total €700,000 for the sector. These funds will be distributed between the unions according to their level of representativeness. In the Metal industry, an agreement was concluded in 1st July on long-life professional training. The agreement establishes a Sector skills council (“Observatoire prospectif et analytique des métiers et des qualifications”) increases the wages of young workers on “professional employment contracts” and invites companies and their subcontractors to jointly construct their training plans.
  • In the cash in transit sector, social partners signed an interesting agreement in November, which came into force on 1 January 2012 (FR1112021I), setting out a process for transferring employees in the event of the loss of a service contract to a competitor.

 

Elsewhere, social dialogue in the public sector was robust this year despite the announcement, in April, of a partial wage freeze for civil servants, as was the case in 2010. On the 31st March, the Ministry responsible for the public sector signed an agreement with all trade unions (except FSU and Solidaires) to reduce precarious employment, by giving workers on short-term contracts better access to permanent contracts or the status of civil servant. The agreement was transposed by the law adopted at the beginning of 2012. The same day the Ministry announced a social agenda for 2011 to prepare the ground for the law and the workplace elections of October (see. point 3). Elsewhere a scheme of financial participation was created in the public sector by decree and the social partners discussed three other topics: gender equality, employment of older workers and teleworking. On 29th September, the Ministry of the Public sector presented to the unions a scheme regarding the financing of unions based on their result in workplace elections.

5. Responses to the economic situation

There was no specific action from social partners to make face to the economic crisis, except it was taking into account in their interprofessional collective bargaining (see. point 4). But at a meeting in November, they decided to begin monthly monitoring to deal with the urgent socio-economic situation (FR1105031I) with, in particular, the aim to reform the partial unemployment scheme.

 

The government tried to make face step by step to the economic crisis instead of adopting a strong programme to decrease expenses and increase taxes. It is seeking to avoid an economic downturn due to a reduction of consumer spending. So throughout the year the government announced new measures to tackle unemployment (increase of supported contracts of employment, financial incentives to hire young or old workers, incentives to recruit young into apprenticeships etc) and the national debt crisis, without using the word “austerity”.

 

The Court of Accounts has warned that the national debt may reach 90% of GDP in 2012 and 120% in 2020 in a report. To reduce the debt, the government decided to pursue its policy of decreasing the number of public servants by natural wastage and only replacing one worker for every two lost to retirement. As in 2010, over 30,000 positions were cut. By the end of August the government decided a new package of measures to raise the revenue of the State to €12 billion in 2011 and 2012 with an increase in different taxes. Placed under pressure by the rating agencies, it announced a second austerity plan in December with an increase in the lowest rate of VAT from 5.5 per cent to 7 per cent and the acceleration of pension reform (the retirement age will increase to 62 years in 2017 instead of 2018). The government is expected to save 17.4 billion euro including €7 billion in 2012. On the 1st of December, Nicolas Sarkozy invited the social partners to an “employment summit” on January 18, 2012 and forecasted a new increase of the VAT, linked to a decrease of employer’s social contributions.

6 Developments in working conditions

The French government introduced a law on 28 July 2011 to establish a new system to help reintegrate employees back into work who had previously been subject to collective redundancy. It followed an agreement (in French, 743Kb PDF) that was signed by social partners at national level (FR1110011I). Elsewhere, the law also introduced measures to strengthen the legal framework regulating internships to offer more protection for French interns (FR1111011I).

Otherwise, a decree dated 7 July 2011 (in French) and a circular dated 28 October 2011 (in French, 2.31Mb PDF) (FR1112011I) detailed the law of 9 November 2010 (in French), reforming the pension system that included a penalty of up to 1% of the payroll costs for companies with at least 50 employees, which had not met their responsibilities to reduce the pay gap between women and men by 1 January 2012.

By the law (Social Security Code, art. L. 138-29), the social partners within undertakings with more than 50 employees must improve working conditions to reduce workers’ exposure to arduous work. Employers are subject to penalties if an agreement or action plan to deal with this issue had not been introduced by 31 December 2011, according to a decree of 7 July 2011. For example, the car manufacturer Renault concluded an agreement with four unions (CFDT, CFE-CGC, FO, CFTC) on an early retirement scheme for workers 58 years of age or older. This scheme could affect 3,000 employees. Psychological risks are also under scrutiny and on 11 April, the Ministry of Labour received a report  launched by a task-force of experts (“Collège d’expertise sur le suivi des risques psychosociaux au travail”) that proposed six criteria to follow six factors of risks : work intensity and working time, emotional demand, autonomy, quality of social relations at work, value conflicts, insecurity within employment. On 19 April, the National assembly voted in favour of a report on psychological risks that stressed the need to develop the prevention of stress and to improve the support available to those adversely affected.

In November, the Secretary for State for Small and Medium sized companies launched a plan to develop telework ing (which affects 9% of workers in France compared to an average of 18% across the EU). The aim is to add a chapter in the Labour Code on this practice, to clarify the insurance coverage of employees working at home and to share best practice.

The beginning of the year started with a strong political debate about the law on 35 hour weekly working time when the European Committee of Social Rights (ECSR) ruled in its annual assessment that the French working time legislation does not conform to the European Social Charter, in particular the system of measuring working time for managers called ‘forfait-jours’, where they work a fixed number of days per year, and the regime of on-call duty. Laurence Parisot, president of the main employers’ organisation MEDEF, called for the abolition of the legal threshold for weekly working time that has to be negotiated and leads to collective agreements. On 29 June, the French Supreme Court took its first decision on the ‘forfait-jours’ (FR1107011I). The court ruled that French law and collective agreements are compatible with European and international sources, but employers will have to take the health and safety of managers more into account. This important ruling will force companies and social partners to verify that sectoral and company agreements are compatible with criteria set by the judge. This could lead to the invalidity of many collective agreements since employers often neglect to carry out interviews with managers and to assess their workload, or even to count the number of working days.

Otherwise, the legislator has adopted two laws creating new leave for employees to improve their work-life balance: the law of 7 July 2011 allows employees time-off when they have medical appointment for oocytes donation and embryo transfer. In November, the National Assembly voted in favour of a draft bill to increase the number of days-off in case of the death of a child from two to five days and for the partner from two to three days. In March, the president of the MEDEF, Laurence Parisot said she supports forcing fathers to take a paternity leave.

7. Industrial action

On national level, after the strong but unsuccessful demonstrations against the pension reform in 2010, unions demonstrated less in 2011. The traditional demonstration of 1st May, was followed by only 77,000 trade unionists (compared with 195,000 in 2010, according the police). After the announcement of a wage freeze in the public sector, unions launched a national strike on the 31st May, but the government calculate that only 5% of workers went on strike. Unions could not agree on a national day of action against the government’s policy of austerity, in contrast to other European countries where huge demonstration were organised. On 11th September, five unions (CGT,CDFT, FSU, UNSA) organised demonstrations but with weak participation - about 145,000 unionists took to the streets, according to the police. On 13th December a new day of action witnessed a weak participation among workers yet again.

 

At the sectoral level, dockworkers and port workers staged 14 days of strikes in January to protest at the withdrawal by the government of extending an agreement on early retirement, which was agreed in 2010 for up to 6,000 dockworkers with arduous jobs. On the 15th April, the union and the employer organisation reached an agreement which was accepted by the government. The agreement allowed for two years early retirement for dockworkers with arduous jobs, financed by the employers of the sector, and an additional early retirement which was not linked to arduous work. In December, the private security guards in the airports went on strike for better wages and working conditions. After the first week of the strike the government asked the police and the army to replace the strikers, a move that was immediately denounced by the unions as a breach of the right to strike. Finally unions and the employer organisation signed an agreement that allocates a bonus of 1,000 euro to each employee.

As French workers were facing real cuts in their standard of living, as pay increases failed to keep pace with inflation, they participated in strike action at company level to demand for a higher wage increase (FR1104021I).

 

Elsewhere, in September the unions on the island of Mayotte, which became a French overseas department in March, launched a 44 day general strike against the high level of prices, specifically for food. An agreement to end the conflict was concluded in December with the decrease of the prices of 10 essential products. 

8. Restructuring

Two car manufacturers are accused of planning to relocate their production to low-cost countries - Renault with its new plant in Morocco and PSA-Peugeot-Citroën that is suspected by some unions to plan the closing of its plants of Aulnay (Seine-Saint-Denis) and Sevelnord (Nord). PSA announced a restructuring plan in November that will cut 5,000 jobs in Europe, by shedding half of its directly employed workforce and by halving its number of subcontractors.

 

By the end of the year, several restructuring plans were announced in the financial sector, specifically in the investment division of the banks as for BNP Paribas (373 job cuts in France), Société Générale (880 job cuts),Crédit agricole (850), Crédit Foncier de France (350) or HSBC (672).

A wave of restructuring has also affected oil-refineries: Total, Petroplus in the beginning of the year (ERM Factsheet) and in October (ERM Factsheet) and LyondellBasell. The media were also affected by the crisis of restructuring with significant job cuts by Les Journaux du Midi, Le Parisien, France-Soir and La Tribune (both have ceased their paper publications) and in the free advertising newspapers Hebdoprint and Comareg, the most significant social plan of the year was launched with the loss of over 1,300 jobs.

A wave of restructuring destroyed employment in the logistics and road transportation sector (MorySociété de transport Guy Van EslandeDucros Express...), the pharmaceutical industry (PfizerTakedaAbott France,Schering-PloughRocheLaboratoires Fournier...), the paper industry (Papeterie de la SeinePapeterie de TurckheimSouche Paper) and the printing and graphical industry (Imprimerie Le MondeImpression et servicesImprimerie Didier Mary).

 

Two majors conflicts as a result of restructuring ought to be mentioned: the closure of Net Cacao (184 employees), a subsidiary of the Nestlé group until 2006, following a protracted 21 month long industrial dispute and the closure of Unilever’s subsidiary Fralib (182 employees) after one of the major industrial relation disputes of 2011.

9. Other relevant developments

After the pension reform of 2010, the government expected to launch a new and large reform to counter the future impact of the ageing population with the creation of an old-age insurance scheme (“assurance dépendance”). But, in September, due to the economic and debt crisis, the government postponed its ambitious reform. However a few public bodies (report of the Economic, social and environmental council, High Council of Family, reports of the four working groups launched by the government) gave their position and indicated different methods of financing this insurance scheme. The Prime Minister excluded the creation of a compulsory private insurance or increasing social taxes (generalised social contributions – “Contribution sociale généralisée” - CSG). The Government’s immigration policy was also frequently debated, and the government aimed at reducing legal migration and the number of professions available to foreign workers.

Elsewhere the idea of an unemployed person, who has reached the end of their entitlement to unemployment benefit, to receive the minimum income (RSA) was discussed and introduced as an experiment in 11 departments. In this pilot the unemployed individuals were asked to work seven hours a week (paid, as opposed to the original proposal for them to work for 5 hours a week for nothing) to help them integrate back into the labour market and to preserve public support for continuing to help the long term unemployed.

Frédéric Turlan, IRShare

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