Industrial relations

France: Latest developments in working life Q3 2019

Pension reform, the development of the unemployment insurance reform, a challenge from labour courts about severance pay, and developments in the field of health and safety are the main topics of interest in this article. This country update reports on the latest developments in working life in France in the third quarter of 2019.

Pension reform gathers momentum

On 18 July, after more than 18 months of consultation, High Commissioner for Pensions Reform Jean-Paul Delevoye submitted a report to Prime Minister Édouard Philippe with recommendations to inform the government's draft law on pensions. [1] According to these recommendations, the universal pension system would be managed by a national fund with a joint board of directors, assisted by an independent expert committee. A general assembly representing all insured people, employers and pension stakeholders, and a council composed of citizens, would also provide opinions each year. This first phase of consultation was generally well received by the social partners, although some objected to certain announcements made at government level and suggested that choices had been made without consultation.

The report was assessed in different ways by the social partners. The French Democratic Confederation of Labour (CFDT), which has been calling for a comprehensive reform of the pension system, welcomed ‘a more contributory and fairer system’. The General Confederation of Labour (CGT) saw it as a ‘social regression project’ that was ‘unfair [and] individualistic’. On the employers' side, the Movement of the Enterprises of France (MEDEF) said that it supported ‘the main principles of this reform’ but remained vigilant on the governance of the future regime and on the fate of the financial reserves accumulated by supplementary pension schemes that are managed by the social partners.

On 12 September, Prime Minister Philippe detailed the objectives and method of the reform. A consultation is taking place from September to December 2019 with the social partners, various professions and citizens. The prime minister has appointed three experts to consider the issue of maintaining older workers in employment. A major debate with citizens was launched on 3 October, which consists of a series of public meetings to explain the challenges of the reform. The reactions of citizens will be gathered through these meetings, and a related website, in parallel with the consultation with the social partners. Parliament is expected to pass the bill before the summer of 2020.

In September, some trade union confederations, such as the CGT and the General Confederation of Labour – Workers’ Force (FO), mobilised their affiliates to oppose the pension reform through demonstrations. On 13 September, seven unions affiliated with Régie Autonome des Transports Parisiens (RATP), which manages the public transport in the Paris region, disrupted traffic and threatened an unlimited strike from 5 December.

Further adjustments to unemployment insurance reform

In February 2019, the government finalised the implementing legislation for the 2018 reform of unemployment insurance. [2]A decree published on 26 July specified the bonus-malus mechanism on social contributions due by employers who hire employees on short-term contracts. The text also provides details on the conditions for opening and ‘reloading’ unemployment insurance rights and on the ‘degressivity’ of compensation for former employees with high incomes.

Another decree published on the same day specified how the nature of the career plan for resigning employees must be assessed in order for them to be eligible for unemployment benefits, and the conditions for granting the allowance to self-employed workers.

Labour courts challenge scale of severance pay

This quarter was marked by controversy over one of the key measures of the labour law reform adopted in 2017. [3] Its aim was to remove employers' fears by capping the severance pay that must be paid to an employee in the event of dismissal without real and serious cause. The reform introduced a mandatory compensation scale to be applied by judges in the event of litigation. This scale sets compensation limits based on seniority.

Labour courts have repeatedly rejected the scale as they consider it contrary to Article 10 of International Labour Organization (ILO) Convention No. 158. On 17 July, the Court of Cassation delivered an opinion that judged the scale compatible with the ILO Convention. However, the labour courts are not bound by this opinion and continue to reject the scale.

Developments in occupational health and safety

Occupational health sector: After four months of consultation, social partners failed to reach an agreement on how to reform the occupational health sector. Trade unions and employer organisations have particularly opposing views on financing and opening up medical monitoring to vulnerable groups, such as platform workers.

Judgment on employee compensation: In a judgment on 11 September, the Court of Cassation recognised the possibility of making employers liable to compensate employees who have been exposed to any ‘harmful or toxic substance’ that could lead to the development of a serious illness. Before this, the possibility had been limited to employees exposed to asbestos. [4]

Survey results: The results of a survey by the Directorate for the Coordination of Research, Studies and Statistics (DARES) showed that the exposure of private sector employees to physical constraints decreased between 1994 and 2017, with the exception of noise. However, exposure to chemicals still affects one-third of employees and exposure to biological agents has increased.

Commentary

The government has slowed the pace of its pension reforms, allowing more time for consultation with social partners and citizens. It remains to be seen whether this investment will be sufficient to ease people's concerns


Footnotes

  1. ^ Eurofound (2018), France: Latest working life developments Q3 2018 .
  2. ^ Eurofound (2019), France: Latest developments in working life Q1 2019 .
  3. ^ Eurofound (2017), France: Latest working life developments – Q2 2017 .
  4. ^ Eurofound (2019), France: Latest developments in working life Q2 2019 .

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