Report examines bargaining under the 2004 social dialogue reform law

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The French Ministry of Employment’s 2004 annual report on collective bargaining, published in June 2005, is the first since a May 2004 law reforming the rules for social dialogue. Not all the effects of this law, which significantly amended the way in which collective bargaining is structured, have yet emerged, and the new rules are fuelling important debates between the social partners.

The 2004 annual report on collective bargaining, published on 27 June 2005 by the Industrial Relations Directorate (Direction des Relations du Travail, DRT) of Ministry of Employment, Labour and Social Cohesion, is the first to reflect the effects of the 'Fillon law' of 4 May 2004 on social dialogue (FR0404105F). This law 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 (except in relation to four themes set out in the law).

Bargaining activity in 2004

The DRT report demonstrates the vitality of sectoral collective bargaining in 2004, during which 1,096 collective agreements were signed (compared with 950 in 2003 - FR0408107F). Four main themes emerged from sector-level bargaining:

  • pay was the most popular theme, with 399 agreements and and additional clauses to existing agreements signed (384 in 2003). The number of sectors in which an agreement was reached rose by 3%. The majority of collectively-agreed minimum wages however, are still lower than the SMIC statutory minimum wage (in real terms) and the government is now emphasising the need to raise collectively-agreed pay scales above the level of the minimum wage;
  • vocational training was a crucial bargaining theme. The number of agreements on the topic rose to 210, more than double the 89 reached in 2003. This massive increase is to a large extent due to the 2004 Fillon law, which contained provisions on life-long learning - 60% of the agreements were reached through the process of applying this law;
  • agreements on pensions and savings schemes registered a significant rise (149 agreements in 2004, 80 in 2003), which partly resulted from new provisions made available by the law of 21 August 2003 (FR0309103F); and
  • bargaining on working time remained constant, with 77 agreements reached in 2004 (78 in 2003).

Moreover, 12 entirely new sector-level collective agreements were signed in 2004, six of which related to industries not previously covered.

The number of company-level agreements signed in 2004 (15,000 in total) fell by 10% compared to 2003.

Little use made of exemptions and right of opposition

The option provided for in the 2004 Fillon law whereby company-level agreements may depart from sector-level agreements has been little used. A study of the uses of this exemption option at sector level has been carried out at the request of the DRT in 10 industries - private hospitals, young workers' hostels, aeraulics, manual work in the construction industry, metalworking (agreements at regional or lower level), the flower and pet trades, hotels and catering, hairdressing, thermal equipment, and large-scale retailing (see 'Les dérogations: quels usages par les branches de la loi du 4 mai 2004'[Exemptions: uses of the law of 4 May 2004 by sector], Jobert and Saglio, presented at a DARES-DRT-Université Paris I colloquium on 'Social dialogue: international perspectives', 29 June 2005). The research finds that no sector has so far actually and voluntarily allowed company-level exemptions. In general terms, the process of collectively 'taking ownership' of the contents of the Fillon law, which should, in particular, lead to the opening up for discussion of the issue of exemption at sector level, does not yet appear to have made much progress.

Moreover, the law provides for the right of the majority trade union(s) at the various levels of bargaining to exercise a 'right of opposition' to collective agreements signed by other unions. Yet in 2004, only one sector-level agreement (relating to animal insemination centres) gave rise to the exercising of this entitlement.

The DRT feels that it is too early to assess the Fillon law in relation to the two most important points: the relationship between sector and company-level agreements, and majority agreements. In the current uncertain situation, what matters for DRT is that all the social partners engage in negotiations in full knowledge of the facts and be well aware, especially at sector level, that from now on 'silence is also important' (the non-introduction of a clause ruling it out means de facto, the acceptance of the principle of company-level exemption, except in those four fields where no exemption is possible according to the terms of the law).

The government has been especially watchful regarding the future consequences of the Fillon law for the development of collective bargaining at sector and company levels. Parliament has been increasingly anxious to divest itself of some of its decision-making power in favour of collective bargaining, and as legislation in this area is aimed more than ever at supplementing negotiations between the social partners, collective bargaining has been an area of concern for government.

The DRT, like many others, is therefore curious about the scope of the law passed in 2004, and whose effects it is finding hard to identify: is the 2004 law just one step or does it constitute a much broader set of changes in the development of collective bargaining? The answer, it argues, lies primarily with the social partners. The fact remains, however, that the features introduced in the Fillon law, particularly the practice of exempt agreements, will require in-depth monitoring by the state, something that everyone realises will be a sensitive matter.

Reactions

In response to the report, three representative trade union confederations - the General Confederation of Labour (Confédération générale du travail, CGT), the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT) and the General Confederation of Labour-Force ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO) - reiterated their opposition to the principle of exemption from sectoral agreements. CGT and CGT-FO maintain that it is a move towards the dismantling or unravelling of the whole body of collective bargaining and collective agreements. CGT states that it is particularly dangerous in the newly-created sectoral agreements: seven agreements out of the 10 concluded since May 2004 in sectors that had never had one before do not appear to have introduced a 'no-exemption' clause. CGT, which is in favour of majority agreements, stresses the difference between the right of opposition and majority agreements. The right of opposition, it argues, confines the majority unions within a detrimental, 'destructive' role, in that it does not lead to the agreement being renegotiated (the agreement is considered as never even having been signed). For CFDT also, majority agreements, unlike exercising the right of opposition, would force the social partners to do more work in the build-up to the agreement. Lastly, these two confederations are in favour of the organisation of a 'gauging exercise' to measure union representativeness at sector level, by holding a one-off ballot at that level or through combining the scores of the unions in company-level elections of representatives.

The Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) employers' confederation, which supports exemption, contends that the benefits negotiated in agreements are now mainly 'qualitative' ones. It feels, for this reason, that ways of assessing what is more or less advantageous to employees has become arduous, and might require a rethink.

Commentary

More than a year after the law on the reform of collective bargaining was passed, a great deal of uncertainty clouds the effects that it may bring about. The law’s content, which is arguably difficult to understand, lends itself to a variety of interpretations and leaves serious questions unanswered. This is the case for the hierarchy of sources in law governing collective bargaining: does it mean a dismantling of the various levels of bargaining, or the granting of autonomy to each of them? If it involves a new form of relationship between the levels of bargaining, how is the term 'exempt' to be defined? The most recent debates on the implementation of the law have demonstrated that these issues are by no means the subject of a consensus.

This is probably the reason why the social partners are being circumspect about taking any steps in this new direction, hence the rather slight increase in sector-level bargaining in 2004 compared with the results hoped for (apart from the agreements on vocational training). Prudence has also been evident among employers, if the drop in company-level bargaining is anything to go by.

At present, the implementation of the law of May 2004, aimed at driving forward social dialogue, has resulted in a degree of ambiguity in the structuring of industrial relations. However, the ways in which the various actors take ownership of it will perhaps lead, more clearly than was previously the case, to a new configuration of relationships between the law, and sector and company-level agreements. (Solveig Grimault, IRES)

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