Restructuring under debate

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In November 2003, the French social partners are engaged in difficult intersectoral negotiations over social measures to accompany corporate restructuring, while the government is preparing new measures in this area and changes to the law on collective redundancies. Relations between the social partners have been strained by the proposals of the MEDEF employers' organisation on restructuring and by recommendations made in an official report.

The question of social measures to accompany corporate restructuring and resulting job losses is at the top of the industrial relations agenda in France in late 2003. The new conservative government which came to office in 2002 suspended parts of the previous Socialist-led government's 'social modernisation law' (FR0201102F) - mainly dealing with redundancy procedures, including consultation with employee representatives on the economic and social aspects of redundancy plans -and signalled its desire to examine new policy directions in this area. In March 2003, the government launched intersectoral negotiations with the social partners on the compensatory employment-related measures to accompany restructuring and will soon propose a new legislative framework to parliament (FR0303106F).

Initial outlines of government’s new directions

Although it is not yet possible to gauge the exact nature of the changes that the government intends to make to the regulations pertaining to company restructuring, several significant aspects of its strategy have become apparent. These include stressing the local dimension of retraining for redundant workers, and better public management of restructuring by setting up a specialist working group. The main ideas are as follows.

  • A right to retraining and redeployment at regional level. The idea of creating a right to retraining and redeployment (reclassement) in a worker's local area should be elaborated in a bill on training expected in the near future. According to François Fillon, the Minister for Social Affairs, the aim of introducing such a right is 'to give employees the right, regardless of their position, and especially when they are in difficult circumstances because their company has closed down or had to make them redundant, to change occupations, obtain new qualifications in their own field of work ... within their own region'. The point is not only to acknowledge an individual right to training, but also a right to redeployment within a worker’s home region. The Minister has announced that a consultation process with regional councils is under way in order to look at the ways in which these councils could be more closely linked to the establishment of a right to retraining and redeployment.
  • Granting official status to the Interministerial Working Group on Economic Change (Mission interministérielle sur les mutations économiques, MIME). This small working group focusing on restructuring, decided on in January 2003, has now been granted official status by decree. Reporting to the Minister for Employment, it is now to be headed by Jean-Pierre Aubert. The MIME is a small body entrusted with 'joining up' the actions of the various civil service bodies involved in economic change. It seeks to galvanise and coordinate the actions of the various ministries in anticipating economic change, as well as to ensure the consistency of government policy in this area, in terms of its economic, social and local dimensions (FR0303106F).

Tense negotiations on restructuring

As mentioned above, a social partner consultation on restructuring was launched by the government in spring 2003, with the launch of intersectoral negotiations on the compensatory employment-related measures which should accompany corporate restructuring. Several meetings have been held since March 2003, and the talks are planned to end in January 2004. The debates have been characterised by the vehement opposition of the trade unions to a draft plan proposed by the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) employers' confederation.

During the most recent session, in October 2003, MEDEF tabled these proposals for amending the legislation on restructuring. The plan suggests anticipating the changes affecting companies and 'improving the management of restructuring'. It refers particularly to the implementation of a lifelong training policy. To this end, firms employing 300 or more people should be obliged to draw up a forward management plan covering staffing levels and skills, and consult the works council on this issue on an annual basis. MEDEF also advocates a reduction of the time spent on informing and consulting the works council in the event of redundancies, in order to avoid creating anxiety or excessive delays. MEDEF also favours raising from 10 to 20 the number of redundancies within a company which leads to a legal requirement on the employer to produce a redundancy programme, as well as limiting employees’ opportunities to use the courts and shortening collective redundancy procedures. One of this stated plan’s objectives is to 'kill off' companies’ 'fear of recruiting staff.'

The trade unions are unanimously opposed to this plan. According to Maryse Dumas of the General Confederation of Labour (Confédération générale du travail, CGT), the plan is just a 'list of employers’ demands aimed at truncating collective redundancy procedures and there is nothing in it to extend employees’ rights'. More fundamentally, it is the government’s intentions that are worrying the unions. They are concerned that the government's forthcoming draft legislation on the reform of collective bargaining (FR0311101N) may allow lower-level agreements to deviate from intersectoral agreements. On this point, the General Confederation of Labour-Force Ouvrière (Confédération générale du travail-Force Ouvrière, CGT-FO), has questioned the usefulness of holding negotiations on restructuring now, as any potential intersectoral agreement could be contradicted by a sectoral or company-level agreement. To sidestep this danger, Michel Jalmain of the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT) thinks that unions should demand that 'the provisions of the future intersectoral agreement on restructuring become mandatory'. Moreover, Jean-Marc Icar of 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) wondered 'what is the point of negotiating before we know what the government’s stance on restructuring is?'

CAE report

The trade unions’ concerns were exacerbated by the publication in October 2003 of a report by the Economic Advisory Council (Conseil d’analyse économique, CAE), a body responsible for advising the Prime Minister. This report (Protection de l’emploi et procédures de licenciement[Employment protection and redundancy procedures], Olivier Blanchard and Jean Tirole, CAE) advocates the introduction of a tax on companies that make workers redundant as a quid pro quo for simplifying redundancy programmes. This would be a means of raising the awareness of companies about their responsibilities and the social costs of their decisions, while enabling them to obtain an increased margin for manoeuvre. In line with the 'polluter pays' principle, only firms that make employees redundant would contribute to the UNEDIC unemployment insurance scheme. Moreover, the role of the courts would be diminished. Lastly, the report advises the elimination of the distinction between fixed-term and open-ended contracts, and the creation of a single employment contract with a probation period during which companies could dismiss workers without having to pay the proposed new tax.

These proposals are interpreted by the unions as an additional provocation.


As long as anxieties remain as to the content of the reform of the law on collective redundancies and the directions of government policy on restructuring, it seems unlikely that genuine negotiations among the social partners will begin. Arguing over an unknown plan would be more likely to have the effect of fuelling the trade unions’ concerns. (Marie Raveyre, IRES)

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