Government issues assessment of 35-hour week legislation

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In September 2002, the French government issued an evaluation report on the implementation of the 35-hour week, which is to be submitted to parliament. The report examines the principal effects of the negotiated reduction of working time, which began in 1996. Since then, the creation of an estimated 300,000 jobs has been attributable to the reduction of working time. The switch to the 35-hour week has involved a large rise in the amount of company and sectoral collective bargaining and has generated an increase in the flexibility of working schedules. Those employees who have experienced working time cuts have responded positively overall, although opinions differ widely according to employees' levels of skills The report was published just as the government proposed new measures to introduce flexibility into the 35-hour week.

At a meeting of the National Collective Bargaining Commission (Commission nationale de la négociation collective) on 6 September 2003, François Fillon, the Minister for Social Affairs, Labour and Solidarity, presented trade unions and employers’ associations with a draft evaluation report on the negotiated reduction of working time over recent years. At the same meeting, the Minister presented the government's new bill on 'wages, working time and job creation' (FR0209105F), which includes provisions on increasing the annual overtime quota in order to introduce greater flexibility into the statutory 35-hour working week.

The evaluation report, which the government must present to parliament under the terms of the second 'Aubry law' on the 35-hour week of January 2000 (FR0001137F), is based on the most recent data, from 2000 and 2001. It studies the principal aspects of the transition to the 35-hour week initiated by the previous Socialist-led government with the first Aubry law in 1998 (FR9806113F) - ie the consequences of the reduction of working time on employment levels, collective bargaining, working time and pay. The report thus represents a genuine overview of the implementation of the Aubry laws at a time when the current conservative government is preparing to introduce flexibility into the 35-hour week.

According to the report, by the end of 2001, five years after the first statutory moves to encourage negotiated working time reduction (launched by 1996 'Robien' law providing incentives for agreed working time cuts - FR9705146F), 53% of private sector employees (8.6 million workers) were working in companies that had changed over to the 35-hour week. Serious disparities still existed, depending on the size of the company and the industry in which it operated. Thus, at the end of 2001, 90% of employees in firms with 200 or more staff were working a 35-hour week, whereas only 40% were doing so in companies with 21-49 employees, and a little under 10% had changed over to the new hours in firms employing fewer than 20 people. Average declared weekly working time for full-time staff in businesses with 10 or more employees had decreased by 2.9 hours between 1996 and the end of 2001 (a cut of 7.5%), and stood at 36 hours per week.

Impact on employment levels

The report's comparative analysis of businesses that had changed over to the 35-hour week and those that retained the 39-hour week indicates that, from 1996 to the end of 2001, an estimated 300,000 new jobs were attributable to the reduction of working time and the accompanying lowered social security contributions for employers. The part played by the reduction of working time in the overall rise in employment over this period stands at around 18%. Up to 2000, due to the incentive measures contained in the Robien law and first Aubry law, the net effect on employment was an increase of 6%-7% of the number of employees covered by working time reduction agreements (ie 160,000 new jobs). After 2000, roughly 150,000 jobs were created due to the effect of lowering statutory weekly working time to 35 hours.

State funding for the reduction of working time, which since 2000 has been in the hands of the employer contributions reform fund (Fond de Réforme des Cotisations patronales, FOREC), a fund set up to centrally handle all the monies allocated to the lowering of social security contributions, totalled a little over EUR 9 billion in 2001. The level of aid granted differed greatly depending on the industry and the size of company, reflecting the unequal take-up of the 35-hour week throughout the economy.

More bargaining and greater flexibility

As previous assessments of the reduction of working time have shown, (FR0107170F), the transition to the 35-hour week has mainly revolved around bargaining, principally at company level, where over 35,000 agreements have been reached annually since 1998. However, sector-level bargaining has not taken a back seat, especially since 2000, when small businesses were allowed to reduce their working time by what is termed 'direct access'- ie through application of a sector-level agreement.

There have been two successive phases in the ways in which the reduction of working time has been negotiated. Prior to 2000, the favoured means of access to the 35-hour week was a company-level agreement, often in small businesses signed by an employee 'mandated' (FR9807123F) by a trade union (this was the case in more than 60% of agreements). After 2000, in more than six out of 10 cases, the changeover to the 35-hour week was carried out by direct application of a sector-level agreement (without negotiation taking place within the firm in question), a trend which accelerated rapidly in 2001 (rising to three cases out of four) due to the massive increase in small businesses reducing working time.

On the other side of the equation in the reduction of statutory working time, the two Aubry laws have opened up a new spectrum of possible options for organising working time. In half of the workplaces that have changed over to the 35-hour week, negotiators have opted for the working time reduction to be implemented in the form of extra annual holiday entitlement. This format has been especially popular in large companies, as it covers over 75% of employees in firms with a staff of over 500, and only a third of workers in companies with fewer than 20 employees. Two-thirds of managerial staff have also benefited from this format. In small businesses, the preferred method is half a day off per week, or one day every two weeks. Moreover, 18% of workplaces that changed over to the 35-hour week in 2000 have withdrawn previously included break periods from the basic working time used for the calculation of the reduction process.

At the same time, various forms of working time 'modulation'- ie variation around an average - have often accompanied the transition to the 35-hour week. Some 35% of employees have seen their working time reduced on the basis of the introduction of an annual schedule, with the hours worked varying between busy and slack periods. In the construction industry, this is the dominant method (72% of cases). While the statutory option to vary working time around an average has existed since 1982, until 1998 very few employers used this type of instrument of flexibility: in 1994, only 8% of companies with 10 or more employees had negotiated an agreement to use 'modulation', and only 4% had implemented such a scheme.

The changeover to the 35-hour week has been accompanied by a reduction of the working time of part-time workers, who have thus also benefited from the legislation. More generally, the proportion of part-time employees has fallen since 1998, and stood at 14.1% of all employment in March 2002. Lastly, the reduction of working time has not resulted in a drop in pay, although there has been a wage freeze in one out of three cases. Wage moderation has been less significant in 'micro-businesses' and very large ones. However, it should be emphasised that with the introduction of modulation, employees who had previously worked a lot of overtime, the majority of whom were manual workers, have seen a noticeable reduction in their pay.

Generally favourable response among employees

The evaluation given by employees affected by the reduction of working time of the impact on their working as well as their home lives, has been quite positive. Around 60% of those surveyed say that they feel the change has led to an improvement overall, while only 15% say the opposite. However, this positive overall judgment conceals very mixed evaluations that differ widely depending on the workers’ qualifications and gender. Female managerial staff are the most satisfied group (73% report an improvement), while unskilled female workers are the least content (40%). A similar, albeit less marked, contrast exists among men with different levels of qualification (65% for managerial staff, as against 57% for unskilled workers).

Looking only at working conditions, the response given is clearly more qualified. Here again, it is senior managerial staff and middle management (both male and female) who perceive an improvement in their working conditions due to the transition to the 35-hour week. The employees who are most likely to believe that their working conditions have worsened are manual and unskilled workers. The reduction of working time has generated wide-ranging organisational changes which, considering the time and production constraints bearing down upon these workers and the few new jobs created in these categories, have led to the intensification of work and a worsening in working conditions.

Commentary

The content of the report presented to trade unions and employers’ associations is especially interesting because it is the first overview of the implementation of the 35-hour week to have been so detailed, and because it was issued just before the legislative amendments planned by the new conservative government begin to cloud the effects of the reduction of working time. In terms of job creation, which was the priority of Martine Aubry, the Minister who introduced the 35-hour week legislation, the assessment is very positive. From the perspective of improving the status of employees, the report clearly highlights very important dividing lines between employees now on a 35-hour week and those still working a 39-hour one, but also, more significantly, between the various groups whose working time has been reduced, by reference to the size of the company, the industry and the workers’ qualifications.

The trade unions have roundly rejected the government’s proposals for introducing flexibility into the use of overtime. They may use this report as a basis for their line of argument in defending the social advances produced by the laws on the 35-hour week. (Catherine Vincent, IRES)

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