Collective bargaining reform law passed

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In April 2004, the French parliament passed a law on the reform of collective bargaining. This legislation aims to give a new dynamism to bargaining by introducing two major innovations: collective agreements must essentially have the support of (or not be opposed by) a majority of representative trade unions or of unions representing a majority of employees, in order to be valid; while the previous 'hierarchy' of collectively agreed norms is changed, with the possibility of company-level agreements departing from sector-level agreements.

On 7 April 2004, the National Assembly passed the final draft of a law on vocational training and industrial relations dialogue. The government’s bill on the issue (FR0401110F) was approved with some minor amendments, by the combined votes of the parties of the governing coalition parties - the Union for the People's Movement (Union pour un mouvement populaire, UMP) and Union for French Democracy (Union pour la démocratie française, UDF) - against those of the left-wing opposition. Socialist Party (Parti Socialiste, PS) deputies announced that they would challenge before the Constitutional Council (Conseil constitutionnel) the new legislation's provisions overturning the previous hierarchy of labour law norms.

The second section of the new law deals with reform of the rules governing collective bargaining. The government’s proposals in this area provoked controversy (FR0311101N), but were not amended during the parliamentary process, despite attempts by the left-wing opposition and the UDF centre party.

Validity of agreements and majority principle

The legislation has introduced a 'majority principle' for collective agreements to be regarded as valid. Previously, it was sufficient for an agreement to have been signed by at least one trade union with representative status (FR9909104F). At national level, a government decree dating from 1966 granted an irrefutable assumption of representativeness to five union confederations - the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC), 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), the General Confederation of Labour (Confédération générale du travail, CGT), and the General Confederation of Labour-Force Ouvrière (Confédération générale du travail-Force Ouvrière, CGT-FO).

The new majority principle will be applied differently depending on the level of negotiations:

  • at the intersectoral level, an agreement is valid in the absence of opposition by a numerical majority of trade union organisations with representative status. Any such opposition must be expressed in writing within 15 days of the details of the relevant section of the Ministry of Labour being notified of the agreement;
  • at sector level, two variations of the majority support principle are suggested, and the social partners must choose one of them in a sector-level agreement. Under the first model, validity is subject to the absence of opposition by a numerical majority of unions with representative status, expressed in writing within 15 days of the details of the relevant section of the Ministry of Labour being notified of the agreement. Under the second model, the agreement must be signed by one or more unions representing the majority of the employees in the relevant sector. This majority is calculated according to the results of either a specific employee consultation exercise, or of the most recent works council or workforce delegate elections (FR0309102T). If there is no sector-level agreement that sets out the concept of 'majority', it is the first of the two options (absence of opposition) that will be applied; and
  • at company level, two different variations of the majority principle are available, and the social partners have to choose between them and enshrine this in a sector-level agreement. In the first model, in order to be valid a company-level agreement must be signed by one or more unions that received at least 50% of the votes cast in the first round of the most recent works council or workforce delegate elections. If no union holds this majority, the agreement must be approved by a majority of employees in a vote. In the second variant, an agreement is valid if not opposed by non-signatory unions that received at least 50% of the votes cast in the first round of the most recent works council or workforce delegate elections. This opposition must be expressed in writing within eight days of the relevant section of the Ministry of Labour being notified of the agreement. In the absence of a sector-level agreement choosing the model to apply, it is the second variation that is to be used.

Challenge to hierarchy of norms

Hitherto, in application of the principle of favourability to the employee (principe de faveur), a collective agreement at company (or workplace) level can only improve on the employees’ rights laid down in a sector-level agreement, and the latter can only improve on the rights laid down in an intersectoral agreement. However, from now on, a sector-level agreement may deviate from the provisions of an intersectoral agreement unless such derogation is expressly forbidden. A company-level agreement may, in turn, deviate from all or part of a sector-level agreement, again unless such derogation is expressly forbidden at the higher level. There are also other restrictions on the right for lower-level agreements to depart from higher ones. The favourability principle remains in force in respect of four themes: minimum wages; job classifications; supplementary social protection measures; and multi-company and cross-sector vocational training funds.

The previous 'hierarchy of norms' in terms of collectively agreed provisions remains in force in relation to agreements reached before the new law comes into force.

The new law enshrines the concept of group-level collective agreements in groups of companies, with the same validity criteria as company-level agreements.

Collective bargaining in SMEs

To facilitate the conclusion of collective agreements in small and medium-sized enterprises (SMEs) with no trade union delegates (or workforce delegates carrying out the same functions), the new law allows the social partners to reach sector-level agreements setting out the specific methods for bargaining in these cases. Such an agreement may allow workforce delegates or the works council to negotiate and sign a company-level agreement. This, however, must be endorsed by the national joint collective agreement committee for the sector.

If a company has no elected employee representatives, an agreement can be signed by a company employee 'mandated' by a trade union (FR9807123F). In that case, the agreement must be endorsed by a majority of the company's employees. An amendment to the law introduced by a deputy of the governing coalition stipulates that, in order to ensure his or her independence, this mandated employee may be 'neither related to the company head, nor have decision-making powers similar to those of the company head'.

Social partner and government views

The government feels that the new legislation merely transposes into law a 'common position' on collective bargaining reform agreed on 16 July 2001 by employers’ organisations and four trade union confederations - CFDT, CFE-CGC, CFTC and CGT-FO) (FR0108163F). This agreement did not contain a firm decision on the issue of the challenge to the hierarchy of norms, which was demanded by employers’ associations in order to establish 'autonomous bargaining levels'. The common position's passage on this point was somewhat cryptic, leaving scope for all parties to interpret it as they wished: 'each level of bargaining ... is entitled to negotiate so that the provisions reached at a more or less centralised level … apply to the decentralised levels in the absence of agreements dealing with the relevant subject'.

On this crucial matter of the hierarchy of norms, the government’s stance has undeniably changed over time. In the original plan drafted by the Minister of Labour, the right for lower-level agreements to depart from higher ones was confined to a few issues. In the final government bill, such derogation had become the general rule, with only a few exceptions. The trade unions interpreted this change of tack, imposed by a ruling from the Prime Minister, as having brought the law into line with employers’ demands. This is the main reason why they oppose the new legislation.

The Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), which argues that it was not the instigator of the government’s change of direction, has welcomed the change. However, MEDEF regrets that the government has not revised the French Constitution to reflect the new division of roles of the legislator and the social partners in the regulation of industrial relations and other social matters. The government has only signalled its intention to allow time for national intersectoral bargaining on the issue concerned before any attempt to introduce new legislation on industrial relations matters.

Commentary

When he presented his bill, the Minister of Labour, François Fillon, stated that it was just one step and that it could not therefore ensure the effectiveness of the new distribution of the responsibilities of the social partners, parliament and the government. Everything will depends on the respective attitudes of the social partners and the authorities. Even if they have a shared goal of a necessary galvanisation of social dialogue, the unions are treading very carefully in current intersectoral bargaining on restructuring (FR0311106F). The same apprehension will probably dominate the next round of sector-level bargaining, which will provide an opportunity to assess whether employers’ associations are actually inclined to give a fresh impetus to industrial relations at all levels, or if they are planning to use the new legal provisions to impose the company as the principal bargaining arena. If the latter is the case, it must be expected that, far from bringing new life to collective bargaining, the new law will actually end up further hampering momentum. (Udo Rehfeldt, IRES)

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