Industrial relations developments 2006 — France

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  • Observatory: EurWORK
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  • Published on: 13 June 2007

Christian Dufour

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

In 2006, many flaws appeared in French social regulation. The revolt in the suburbs of several cities in October 2005 was followed in February-March 2006 by young people protesting against the risk of greater job insecurity. There are more visible divisions between different groups in society. The presidential and general elections in Spring 2007 took place during a period of considerable social risk.

1. Political developments

Please give very brief details of:

  • The government (s) in office during 2006
  • Any general or significant regional/local elections held in 2006
  • Any other significant political events which took place in 2006
  • Any forthcoming national or important regional/local elections or significant political events

If a new government took office during the year, briefly summarise the industrial relations implications.

2006 was a pre-electoral year in France. The presidential elections planned for April 2007 and the general elections that would follow in June, mobilised both political parties and the media since early 2006. Dominique de Villepin’s government, which was installed after the referendum on the European constitution, had a difficult time finding its place. The Prime Minister, loyal supporter of the President of the Republic, did not control the majority party, the Union for a Popular Movement (Union pour un Mouvement Populaire, UMP). Nicolas Sarkozy, then Home Affairs Minister (Ministre de l’Intérieur) , took over the leadership of the UMP in view of guaranteeing his nomination as candidate for the presidential elections. Internal discussions were held over several months in the Socialist Party and led to Ségolène Royal being chosen for the race to the Elysée presidential palace. On both sides, a fairly big gap between party political stakes and expectations of activists appeared. Despite their common opposition to the European Constitution FR0505103N), the Political parties furthest to the Left of the political spectrum, could not agree on a unique joint nomination of an ‘anti-liberal’ candidate. On the other side, opinion polls forecasted the highest ever vote for the far Right in 2007.

At the end of winter 2005/2006, there were several demonstrations of school and higher education students against a law on youth employment contract (Contrat Première Empbauche, CPE) that the government intended to adopt (FR0605059I). The unions joined the movement and remained united on this issue. The government lost this test of strength. Its majority in parliament voted for the law, the President of the Republic asked for an implementation without the controversial parts and, in fine, the National Assembly passed a bill revoking the contract. This greatly discredited both the government and the Presidency (FR0605059I).

2. Collective bargaining developments

Please give details of the number of collective agreements negotiated in 2006 by level (eg national, sectoral, company), compared with numbers of agreements negotiated in 2005. Outline any trends/shifts between levels of bargaining, or changes in bargaining coverage.

Please give details of significant collective bargaining developments concerning:

  • Pay (including both general trends and the level of collectively-agreed pay increases)
  • Working time (including working time reductions and flexibility agreements).

Please outline, with brief examples where possible, the other main themes that featured in collective bargaining in your country during the year (for example, these might include training and skills, job security, occupational pensions, equal opportunities and diversity issues, or new forms of work).

Bargaining on the reduction of working time during the period between 1999 and 2002 was often accompanied by a pay freeze lasting several years. The latter has now come to an end and the issue of purchasing power is again in the forefront – both at sector- and company-levels (FR0609029I). The real contribution of bargaining to pay setting can be questioned. Highest-paid employees have experienced individualisation for a long time already; whereas low-paid production and service employees’ pay is based on national minimum pay (Salaire minimum interprofessionnel de croissance - SMIC) (FR0607019I). Gradual increases in the SMIC over the years have led to a reduction of the pay hierarchy at the bottom end of the scale: Many skilled employees received pay that is close to the SMIC and many sectors have collectively-agreed minimum pay levels that are actually below the SMIC.

Mimimum wages 2001-6


Gross hourly SMIC in Euros

Gross monthly SMIC in Euros for 151,67 hours

Gross monthly SMIC in Euros for 169 hours



1 254,28




1 217,88

1 357,07




1 286,09




1 215,11




1 154,27




1 127,23

In the public sector, the Unions contested the awarded pay rise of only 0.5%, following the 2005 almost stagnation and for the eighth consecutive year, no pay agreement was signed (FR0603029I).

Neither the increase of the SMIC - nor that of average purchasing power (1.3% in 2005) - made up for the increase in certain unavoidable expenses. Housing and transport now account for a third of households’ budgets. Employee poverty is on the increase, especially amongst young people and single parents families. More and more civil servants and public sector employees do not earn enough to keep them out of poverty. In December 2006, a tripartite conference on employment and pay gave the government an opportunity to present a few measures, which are considered by unions to be very disappointing and are half-heartedly supported by employers.

Economic growth will probably not reach 2% in 2006. There was a slow-down in job creation during the year. The number of employed jobs increased by 1% between 30 September 2005 and 2006. Unemployment dropped, but there are more insecure jobs (FR0608039I).

A Council for Employment, Income and Social Cohesion report (Conseil de l’emploi, des revenus et de la cohésion sociale, CERC) considers that the combination of stagnating pay and increasing job insecurity is a cause of social disintegration. Aconference on “flexicurity” has been planned for January 2007.

Working time has hardly changed. Local bargaining attempts to adapt it to economic constraints that threaten employment. Making the law on the 35-hour week more flexible has been one of the topics of the presidential election pre-campaign.

The national cross-industry agreement (accord national interprofessionnel - ANI) on Discrimination was signed on 11 October 2006 by three employers’ organisations (the Movement of French Enterprises (Mouvement des entreprises de France, 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)) and four unions (the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC), 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)). Negotiations were opened on 1 February 2006 after the revolt in the suburbs in November 2005. The agreement is intended to promote non-discrimination and equal treatment in the areas of recruitment, posting, pay, vocational training and careers. It aims at direct and indirect, as well as intentional and unintentional discrimination with real or alleged origins. It incorporates statements of principle regarding, for example, good practices concerning diversity. It also includes mandatory measures, such as the introduction of recruitment procedures free from all forms of discrimination (FR0611039I). The signatories have asked the authorities for it to be extended.

3. Legislative developments

Please give brief details (including a short contextual summary) of the year’s main legislative developments with implications for industrial relations, where these are not covered in other sections of your response. For example, this might include new or amended legislation on issues such as employment rights, working time, pay and conditions of employment, termination of contract, equality, social security (with implications for the employment relationship), training, new forms of work, the labour market, health and safety etc.

The government has taken a series of legislative measures aimed at reforming the labour market, sometimes alongside negotiations between the social partners.

Unemployment amongst Young people is worrying high. Therefore, at the beginning of 2006, the government presented a law on ‘equal opportunities’addressing this issue.. The main measures of this law were fought in the streets (see below point 1). Parliament voted for it, but the President of the Republic immediately suspended the controversial measure. Nevertheless some dispositions of the law were adopted as the creation of a new ‘junior apprenticeships’ scheme, provisions for better management of student work placements combating discrimination and the creation of new ‘urban free zones’ (zones franches urbaines, ZFU) providing subsidies for companies hiring young people from the area. Two existing measures have been modified in order to promote youth employment. (Law N° 2006-396 adopted on 31 March 2006 on equal opportunities (JO, 2 April 2006) and law N° 2006-457 adopted on 21 April 2006 on young people’s access to economically active life in companies (JO, 22 April 2006)).

Legislative measures have also been adopted concerning older people. Some were already negotiated by the social partners (FR0608029I). The government grouped them together under the title of ‘collective action plan for the employment of older people’ (FR0608029I). Currently, 350,000 people over 50 are jobseekers. A third will be able to find a job. The government wants to increase this proportion to 45% by 2010. It would also like there to be a 50% employment rate of 55-64 year-olds by the same year, compared with 37.9% in 2005 (Source : Eurostat). In order to achieve these targets, two measures were adopted:

-a provisional measure making it easier to retire gradually, to be assessed in 2008;

According to the Prime Minister,

-the creation of a special fixed-term contract for older employees, considered by the Prime Minister as an essential measure, while criticised by the unions. It is aimed at promoting the return to employment of those over 57 and at combating age-discrimination. (Concerted national action plan on older people’s employment: Doc.-V-N° 35/2006, 29 June 2006; employees over 45: Special edition, 25 November 2004).

Equal pay is due to be achieved by 31 December 2010, in line with the law on equal pay between men and women (FR0605049I ; FR0612019Q). According to the National Institute of Statistics and Economic Studies (Institut national des statistiques et des études économiques, INSEE), women’s pay was, on average, 19.5% lower than that of men in 2002 – men’s average monthly full-time net pay was EUR 1,905 compared with EUR 1.534 for women. The law wanted collective bargaining to reduce the gap. The social partners are requested to agree on the observations and then take action to put an end to pay disparity. Neutralisation of the impact of maternity leave on pay is also inscribed in the law.

Other measures are intended to promote work-life balance, as the help for SMEs to replace employees on maternity leave. (Law on equal pay between men and women adopted on 23 March 2006 (JO, 24 March 2006); Decision N° 2006/533 DC of the Constitutional Council adopted on 16 March 2006 on equal pay between men and women (JO, 24 March 2006)).

A law that was adopted on 23 March 2006 introduces a bonus for returning to employment, given to people returning to economic activity, as well as financial incentives for returning to employment for the three categories of people on minimum benefits, based on monthly flat-rate bonuses. The aim is to promote combining income from work and minimum benefits. Few of the 3.3 million people (excluding dependents) on minimum benefits can benefit from existing incentives: 11.5% of those on the Minimum Integration Income (Revenu minimum d’insertion, RMI), 14.4% of those on Specific solidarity allowance (Allocation spécifique de solidarité, ASS) and 7% of the Single Parent’s Allowance (Allocation de parent isolé, API) beneficiaries. At the same time, the battle against fraud increased. The law also proposes measures aimed at promoting occupational transition for certain categories of people, who have been made redundant. [(Law N° 2006-339 adopted on 23 March 2006 (JO, 24 March) Constitutional Council, Decision N° 2006-534 DC adopted on 16 March 2006). Draft law on return to employment and development of employment: v. Legis. Soc-V-n° 66/2005 adopted on 6 December 2005)].

4. Organisation and role of the social partners

Please provide brief details of any changes in the organisation and role of the social partners in your country during 2006. This might include trade union or employers’ organisation mergers, changes to social dialogue structures, or changes in membership levels and representativeness.

There have been several reports on the very sensitive issue of trade union representativeness (FR0606039I ; FR0606049I). A law adopted in 1966 confers irrefutable and general recognition to five trade union confederations and recognises limited representativeness of other union structures that have appeared since. An opinion of the French Economic and Social Council (Conseil économique et social, CES) –strongly contested by some unions – proposed that elections should serve as the basis for recognition of representativeness. This would be accompanied by the need for unions representing a majority of employees/electors to agree on a compromise during collective bargaining for an agreement to be valid (i.e. majority right of endorsement) (FR0507104F). Currently, it is necessary for a majority of unions to oppose an agreement in order to invalidate it (i.e. majority right of opposition). These changes would also apply to the representativeness of employers’ organisations and this explains why the biggest ones did also not support the CES’ proposal.

5. Industrial action

Please give brief details of strikes and other industrial action during 2006, including

  • statistics on the number of strikes, workers involved and working days lost (absolute and per 1,000 workers) for as much of 2006 as is available (please indicate briefly what types of action are or are not included in these figures – eg are only strikes with a minimum number of workers or days lost included, or is only “official” action included?), and how this compares with previous years;
  • any particularly large or significant strikes/disputes; and
  • any changes to the regulatory environment – eg the law on strikes or dispute resolution.

There are still relatively few identified strikes in the private sector. They are often local and short, concerning a company or workplace. In the public sector, transport and education have remained the sectors most concerned by industrial action.

The most significant dispute in 2006 took place in February and March, school and higher education students mobilised against a draft law, which made it possible for employers to dismiss new recruits without any justification or notice during their first two years in the job. According to those in government, who were pushing for this First Job Contract (Contrat Première Embauche, CPE), it should have made it easier for young people to enter the labour market. In fact, the proposal was simply extending –to all companies hiring young people- a possibility introduced in August 2005, by the New Recruitment Contract (Contrat Nouvelle Embauche, CNE) (FR0605059I) reserved to companies with fewer than twenty employees, for all workers.. The labour movement had not mobilised against the latter, but young people refused to accept this type of contract, as they feared it would relegate them to a category of insecure employees. The unions joined the protest movement that took the form of street demonstrations during many weeks, including in towns, which had the reputation of being calm. The government was forced to withdraw its proposal, as a result of the persistence of the movement and the united front of students and trade unions.

6. Cross-border mobility

Please give brief details of any industrial relations-related developments in 2006 on the issue of the mobility of workers (including the posting of workers)between EU Member States or into Member States from outside the EU. This might include collective agreements or legislation regulating the employment of migrant workers, social partner initiatives or debate on the matter (eg trade union campaigns to organise migrant workers), or industrial disputes.

Discussions on ‘Polish plumbers’ – representing the image of poorly-paid insecure workers, coming from Eastern Europe and working in France in total disregard of labour legislation – was at the heart of discussions on the project of the European constitution (FR0505103N). On several occasions, cases of East Europeans working illegally were highlighted in reaction to this issue. The services directive adopted by the European parliament was seen as a reversal for neo-liberal principles, thus confirming the French response to the referendum. Attempts to organise foreign employees working in certain sites (for example, building sites and shipyards, as well as seasonal workers) have been closely followed both by social partners and researchers. Such attempts seem to be difficult and, until now, have not resulted in much. In fact, discussions have now moved to the issue of relocation and loss of industrial jobs to low-pay countries.

Increasing immigration of working people is at the heart of a new law on immigration that was adopted by Parliament on 30 June 2006 (FR0605029I). It aims at making it easier for ‘high-potential’ foreigners to come to France. It creates a new residence permit, called ‘skills and talents’ residence permit. The conditions for obtaining and the features of the temporary residence permit have been changed. Repressive measures against illegal foreign workers have been increased. Many measures also concern foreign students. (Law N° 2006-911 adopted on 24 July 2006 on immigration and integration: JO, 25 July 2006).

7. Reconciliation of work, family and private life

Please give brief details of any collective bargaining or legislative developments in 2006 that aim to make it easier for workers to reconcile work, family and private life. These might relate to maternity, parental, paternity or other leave for childcare purposes, leave to care for elderly parents or disabled family members, care facilities for children and other dependants, or flexible working arrangements (eg job-sharing, flexible working hours, term-time working or teleworking).

Several of the legal measures referred to above concern this aim (gender equality).

Reduction of working time and its effects on pay have been at the centre of the presidential elections’ pre-campaign. The issue of balance between working time and time devoted to family life is a particularly sensitive one in relation to pay levels. Single mothers, in insecure and poorly paid jobs, are very typical of those concerned by these issues. They were raised again at the end of 2006, because of shop keepers’ desire to open on the 24 and 31 December, both of which fell on a Sunday. Several opinion polls show that people are divided on this recurrent issues.

Renault announced at the end of the year that, in order to cope with major employment problems, notably on care, it was intending to encourage many of its technicians and professional and managerial staffs to embark on telework.

8. Other relevant developments

If there been any other significant industrial relations developments in 2006 that have not been mentioned above, please give brief details.

9. General

9.1 Commentary by the NC

Please outline the main events and issues that are likely to be high on the industrial relations agenda in 2007.

The presidential elections are an important event in French society. The results of the far Right will make it possible to measure the quality of the current social compromise. The revolt in the suburbs in Autumn 2005, youth demonstrations at the beginning of 2006 and the growth of a feeling of insecurity at work for more and more groups of employees are all factors that indicate that the social compromise has been undermined.

The fact that many laws were adopted in 2006 highlights, rather than masks, the disarray of the country’s political and union representative forces.

Candidates’ proposals swing between optimising social structures that date back to the ‘thirty glorious years’ (1945-1975) and radical overhaul. The social fracture - which is increasingly visible, but less and less really taken into account – could lead to putting rhetoric to one side and taking on board an agenda, which would have little to do with the official one.

Christian Dufour, Institute for Economic and Social Research, IRES

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