EMCC European Monitoring Centre on Change

France: Young people and temporary employment in Europe

  • Observatory: EMCC
  • Topic:
  • Published on: 08 December 2013



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Given the very high rate of youth unemployment and the substantial proportion of young employees on precarious contracts in France, the labour market transition of young people is of major concern for both policymakers and the social partners. Special contractual arrangements are in place to facilitate the integration of young job-seekers into the labour market. There is no unequivocal evidence that shows that these measures are successful. Most recently, two major initiatives from social partners and the Socialist governments set incentives to hire young people on a permanent basis.

Introduction

Youth unemployment has been a persistent problem in many parts of Europe for many years. Over the past 3-4 years, however, since the onset of the financial crisis and the economic recession which followed, it has become an even greater and more widespread problem and one which, given the on-going depressed state of the European economies, is likely to remain for some time to come. The latest monthly figures (for September 2012) show the unemployment rate of those aged 15-24 averaging 22.8% in the EU – just over 1 percentage point higher than at the time a year earlier. In Spain, the figure was over 54% and in Greece, 57%, in both cases, much higher than a year earlier. In the worst affected countries, therefore, as in most Member States, there is very little sign of any easing of the youth unemployment problem. There are, however, a few exceptions. In Germany, in particular, youth unemployment has declined since the global recession hit in 2009 and now stands at only 8%, well below the level it was before the recession. In Norway too, the rate is only 8%, though this is slightly above the level in 2007 before the crisis. Germany, apart, there are two other countries in the EU with youth unemployment below 10% according to the latest monthly figures - the Netherlands (9.4%) and Austria (9.9%). As in Norway, in both cases, the rate is above the pre-crisis level.

Moreover, young people who do manage to find jobs often have to settle for a temporary one, defined as one with a fixed-term contract of employment. According to the European Labour Force Survey (LFS), in 2011, just under 43% of employees under 25 were in temporary jobs in the EU and well over half in Germany (56%), France (55%), Portugal, (57%), Sweden (57%), Spain (63%), Poland (66%) and Slovenia (75%). (In Norway, the figure was much lower than in most EU countries, at around 24%.) While around 40% of the young people concerned on average were in temporary jobs because they had a fixed-term training contract and another 9% were on probationary contracts, a substantial proportion (37% on average) were in temporary jobs because they were unable to find permanent ones. In the Czech Republic, Cyprus and Portugal, this figure was over 75% and in Spain and Slovakia, well over 80%.

Among young people making the transition from education or initial vocational training into employment, the proportion who take up temporary rather than permanent jobs is much higher than for the age group as a whole. In 2011, 57% of those aged 15-24 in employment who were in education the previous year were in temporary jobs in the EU and 86-87% in Spain, Portugal and Poland. For those moving from unemployment into employment, the proportion who take up temporary jobs is even higher on average in the EU (61%) as well as in Spain (90%).

The fact that a relatively large proportion of young people in employment are in temporary jobs may be a reason why they have been hit disproportionately hard by the crisis. In the economic downturn in 2009, many of the people who lost their jobs first were on fixed-term contracts since not renewing these contracts represented the easiest way for employers to reduce their work forces. In 2009, therefore, there was some decline across Europe in the proportion of young people in work employed in temporary jobs (see the Tables attached to the questionnaire). Since then, there has been some tendency for the proportion to increase again, in part perhaps because employers are reluctant to take on people on permanent - or standard – contracts given the uncertainty about future economic prospects.

Given the above, it is understandable that there is growing public interest, and some concern, over the nature of the jobs that young people are taking up. This concern is mirrored at EU-level where a ‘flexicurity’ approach to labour market policy has increasingly been advocated, which, in practice, means that while flexibility is an important objective, it needs to be accompanied by protection of workers’ interests if it is not to lead to a growth of precarious employment in low quality jobs. Accordingly, there is a need to obtain a better understanding of the terms and conditions applying to temporary jobs, the extent to which they are a stepping stone to permanent jobs and a working career in line with a person’s qualifications and capabilities, the access to social protection which comes with them and the measures in place to encourage employers to convert them into more stable jobs. These issues form the focus of the present study.

Definition of temporary jobs

The interest in the study is in all young people employed in temporary jobs of whatever kind, in the sense of all jobs that they are not subject to a standard contract of employment which is normally one of indeterminate length, or at least one for which no specific length is specified. Such temporary jobs can be for a period of training (i.e. traineeships or apprenticeships) or probation, intended to enable employers to check the suitability or aptitude of people for the jobs concerned. They might also be to replace someone on maternity leave or on a training programme or they might relate to a specific project of fixed duration.

All such jobs and others which are of fixed duration should be covered, whether they are part-time or full-time and irrespective of whether they are specifically for young people (such as perhaps in the case of traineeships or apprenticeships) or for people of all ages which young people happen to be doing. In some cases, it should be noted, it is relevant to include, in addition, to temporary employees, the ‘bogus’ self-employed – i.e. those people who have self-employment status but who are contracted to work for a single employer and who are effectively similar to employees who have a fixed-term contract of employment. (The cases in question relate to instances where employers use self-employment contracts as a means of employing young people without bearing the costs, and obligations, of a standard contract of employment.)

Outline of study

The study is divided in three sections. The first is concerned with the main types of job in which young people who are employed under temporary contracts work and the reasons why employers choose to use temporary contracts of employment instead of standard ones when they take on young people, as well as with the link, if any, with labour market conditions (i.e. with the extent to which the crisis has led to an increase in temporary employment). The starting point is the data summarised above, derived from the LFS, which indicate the relative number of young people employed on temporary contracts in the different European countries and the way that this has changed over the recent past (these data, as noted, are set out in the tables attached to the questionnaire). Correspondents are asked to check these data against any national data on temporary employment and to indicate where these show a different picture from the LFS data, perhaps because a different definition is adopted of temporary jobs.

Any description or commentary on national statistics should, however, remain brief, since the main task of the first section, is to review and summarise relevant sources of information on the different kinds of temporary contract under which young people are employed in each of the countries, the circumstances and areas (the types of job and the sectors of activity) in which they tend to be used and the main reasons why employers adopt them.

The second section is concerned with the access to social benefits which temporary jobs provide, distinguishing between the various kinds of benefit, and with the extent to which entitlement to benefit differs for young people employed in temporary jobs from that for those employed under standard contracts of employment. It should be emphasised that the concern is not only with the formal regulations which apply, which in many if not most countries do not make a formal distinction between temporary jobs and others, but also with de facto entitlement which stems from the nature of temporary employment. In particular, young people in temporary jobs may have difficulty in complying with the need to have a continuous period in employment, or a continuous record of paying social contributions, in order to be eligible for unemployment benefit.

The third section is concerned with the measures in place to regulate the use of temporary contracts of employment (such as specifying the number of times they can be renewed), with the attitudes of government and the social partners towards their use and with the incentives which exist to encourage the wider use of standard contracts of employment and the conversion of temporary jobs into permanent ones. A particular point of interest is the extent to which regulations and attitudes as regards temporary jobs have changed over the crisis period as the number of jobs available for young people to take up has diminished and as expanding these has become a policy priority.

A final point to note is that while it is customary to define youth employment (and unemployment) in terms of those aged 15-24, it is also the case that many of those aged 25-29 are also employed in temporary jobs, as indicated in the attached tables. Correspondents are therefore asked to extend the coverage of the study to this age group where relevant. It is recognised that in some countries the statistics available may not relate precisely to the age groups specified here, in which case correspondents should report on the age groups nearest to these.

Questionnaire

1. Importance of temporary employment for young people

1.1. Do the figures shown in the attached tables (on the number of temporary employed as a % of total employees based on Eurostat LFS data) give a reliable indication of the scale of temporary employment among the young in your country and the way that it has changed over recent years? Are there young people employed in temporary jobs who do not show up in the Eurostat figures? Are there national statistics which show a different picture from the Eurostat data? If so, please indicate what they show and give the source of the data.

National data paint a very similar picture of young employees on temporary employment to the figures provided by the Labour Force Survey. Latest data published by the National Institute of Statistics and Economic Studies (Institut national de la statistique et des études économique, INSEE) published in September 2012 show the situation of young employees in salaried jobs (97.3% of the employed and 88.4% for the total population) since 2003. The data – depicted in Figure 1 – confirm that roughly half of young people work on temporary contracts (in 2011, 27% of young people aged 15-24 were in fixed-term contracts, 16% in apprenticeship and a further 7.5% on temporary agency contracts). This is significantly above the figure for the total population (12%). Moreover, there is evidence to confirm the observation that temporary employment has decreased during the crisis, although changes are marginal. From 2007 to 2009, temporary employment among those aged 15-24 has dropped from 48.3% to 46.4%. This was accompanied by a shrinking population of young people in employment in the same period (-2%) suggesting that employees on temporary contracts were among the first to be made redundant. Since 2009, the proportion of temporary contract is rising again and hit 49.8% in 2011, which is above pre-crisis level. At the same time, the number of young people in employment dropped by another 3% to 2.219 million young workers in 2011.

Figure 1 – Young People in Temporary Employment In Comparison to Total Workforce

fr1304011q.tmp00.jpg

Notes: Data do not add up to 100% since non-salaried employment has been excluded.

Source: Insee

A study by the Ministry of Labour’s Directorate for Research, Studies and Statistics (Direction de l’animation de la recherche, des études et des statistiques, DARES) uses quarterly Insee data to compare temporary employment, defined as temporary contracts or agency work, of young workers (15-29) with those of 30 years and older. Although these data, depicted in Figure 2, show the drastic gap between the age groups, a lower proportion of temporary work is recorded (just over 34% in the last quarter of 2011). This is mainly due to methodological differences since apprentices are excluded from the computation. It is noteworthy, however, that these figures also include the age group from 25 to 29, which is reported to have lower rates of temporary employment than the cohort below. Nevertheless, it can be noted that, in 2011, roughly half of France’s young employees were working under temporary contractual arrangements. If apprentices are excluded, this figure drops to about one-third of the age group.

In addition, Figure 2 gives a clearer image of the cyclical volatility of young temporary employment. For the age group 15 to 29, the proportion of employees on temporary contracts decreased by 3.7 percentage points from 33.4% just before the crisis (fourth quarter 2007) to 29.7% in the second quarter of 2009. Subsequently, the proportion is rising constantly and, as in the data presented above, exceeds the pre-crisis level by the end of 2010 (33.7% and 34.3% by the end of 2011). At the same time, temporary jobs for the age group of 30 or above is relatively stable at around 8%. Again, this illustrate that young temporary workers might have been the first ones to be affected by the crisis. Moreover, it seems that a popular response by employers to a slight easing of the labour market is the recruitment of young workers on temporary contracts.

Finally, the Dares study shows that temporary contracts are not purely a private-sector phenomenon – roughly 40% of the young people working in the public sector had fixed-term contractual arrangements.

Figure 2 – Young People in Temporary Employment In Comparison to Older Workers

fr1304011q.tmp01.jpg

Note: Temporary employment here includes Temporary contracts (CDD) and Agency workers (Apprenticeship is not included).Source: Dares

1.2. Is there any evidence that other forms of employment are used as a substitute for temporary contracts, such as bogus self-employment where young people are contracted to provide services to a single work provider in a continuous manner so acting de facto as employees? If so, please give the source of the evidence and indicate the scale of the phenomenon in terms of the number of people concerned.

There is no systematic evidence that young workers are more or less likely to experience bogus self-employment or other forms of temporary employment.

1.3. Please list (and give summary details, i.e. purpose and duration of the contract) the most common contract types or contractual arrangements under which young people are employed on a temporary basis (such as for traineeships, apprenticeships, probationary periods, replacement of workers on leave or projects of a fixed duration). What is the relative importance of each type of contract or arrangement in terms of the number of young people employed under them?

See below.

1.4. Please indicate the main reasons for the emergence and development of the different types of temporary contract which you have listed in response to question 1.3. To what extent are they linked to particular conditions in the labour market or employment protection legislation/regulation in your country? What is the main attraction of such contracts to employers? What effect has the crisis had on the use of such contracts?

As Figure 1 shows fixed-term contracts (Contrat à durée determine, CDD) are the most common form of temporary employment in France. In 2011, 27.0% of all young people (15-24) in employment had such a contractual arrangement, whereas only 8.4% of the total workforce was employed on a CDD. Not surprisingly, the proportion of apprentices is substantially higher among younger employees (15.7% and 1.4%, respectively). Finally, it is noteworthy that temporary agency work is – similarly to employment under fixed-term contracts – more than three times more likely to be found among young employees than in the workforce as a whole (7.1% and 2.1%, respectively).

Additional findings by the Dares study cited above shed more light on the nature of temporary contracts for young people. Most notably, it is shown that in 2011, around one-fourth of the workforce of less than 26 years of age is on so-called assisted contracts (contrats aidés) for young people (against 3.4% for the total – all ages), i.e. contracts that receive some kind of state subsidiaries, which may take the form of recruitment subsidies, exemptions from certain social contributions, or training assistance. There are three different categories of such contractual arrangements – vocational education and training contracts, assisted contracts for the market sector, and assisted contracts for the non-market sector (public sector, non-profit sector). Vocational education and training arrangements have been designed to provide young employees with the skills necessary to succeed on the labour market, whereas the other measure shall support young people in acquainting first job experiences (although some instruments consist of both). In 2011, there were four schemes in place that are taken into account in the statistics.

Vocational education and training contracts

  1. Apprenticeship Contracts are employment contracts (of one to three years) that provide young workers who have completed their compulsory schooling with general, theoretical and practical training in order to obtain a vocational qualification backed up by a professional or technological diploma, an engineering qualification, or similar. Apprentices are employed with a company that provides parts of the training and monitoring through an assigned tutor. In addition, training is provided by specialised training centres. Remuneration is between 25% and 78% of the national minimum wage according to the age and progress of the apprentice. The state pays most social contributions (except those for occupational accident insurance). In addition, the employer receives a lump-sum compensation of at least €1,000 per year, and is entitled to tax credits of €1,600-€2,000 per annum.
  2. Professionalization contracts can be concluded between employers and employees of 16 to 25 years of age, or under certain conditions above if the worker has been previously unemployed. The contract may constitute a temporary or permanent arrangement. The employment relationship consists of work and in-house training, whereas the latter must account for at least 15% of the time spent at work. The professionalization period usually lasts between 6 and 12 months, but might be extended to up to 24 months by a sectoral collective agreement. Participants are paid 55% to 85% of the national minimum wage if they are 16 to 25 years old; older employees receive higher remuneration. In addition, young trainees qualify the employer to apply for exemptions from social contribution. The measure was introduced in 2004 as a reorganisation and simplification of a range of similar instruments that had existed previously.

Assisted contracts for the market sector

  1. The single integration contract in the market sector (CUI-CIE) is designed to encourage the recruitment of job seekers with difficulties to access the labour market. The instrument was initially targeted at long-term unemployed but was later extended to other groups that have trouble finding employment. The employer signs a contract with a local authority (for instance the public employment service, pôle emploi) and is then eligible to receive subsidies to cover parts of the labour costs and, if applicable, training expenses and other benefits. The amount of this aid is determined by regional authorities, which must not exceed 47% of the gross hourly minimum wage. Contracts may be permanent or temporary with a minimum duration of 6 and a maximum duration of 24 month. Exceptions apply for disabled or older workers. The employee may work full-time or part-time. The scheme was created in 1995 and substantially reformed in 2005 and reorganised in 2010.

Assisted contracts for the non-market sector

  1. The single integration contract in the non-market sector (CUI-CAE) is the equivalent of the CUI-CAE in the public sector. The major difference is that wage subsidies are significantly higher – up to 95% of the minimum wage and that they are eligible to a range of specific exemptions. The instrument was created as a reorganisation of previous measures in 2005 and restructured in 2010.

Other measures exist. In 2008, for instance, so-called independence contracts were introduced to help young job seekers from disadvantaged neighbourhoods to find employment through close personal guidance (FR1212011I,). The general pattern that can be observed here is that all contracts combine the insertion of young employees with financial incentives to the employer. As the discussion below will show, this pattern is repeated in recent policy initiatives to boost youth employment. The discussion here will focus on the four most important programmes presented above that are reflected by most reports.

It is noteworthy, however, that assisted or professionalization contracts are not necessarily temporary arrangements. In the second quarter of 2012, for instance, 57.5% of all CUI-CIEs (market sector, all age groups) were permanent contracts whereas more than 98% of all CUI-CAEs (non-profit sector, all age groups) were CDDs.

Figure 3 shows, however, that among the assisted/subsidised contracts, the most popular instrument among young people is the apprenticeship programme. In 2011, 16.6% of employees under the age of 26 had such a contract. This proportion has been rising and only experienced a minor bump in 2010. Training contracts, in particular the professionalization contract, are signed by an average of 6% of young employees in the period covered (2003-2011). Assisted contracts for the market sector experienced an all-time low in 2011. Data suggest, however, that this is rather due to the low take-up of the newly established CUI-CIE and the end of a range of other instruments that existed previously. The use of assisted contracts for the non-market sector is relatively stable.

Figure 3 – Assisted Contracts for Young Employees (under 26)

fr1304011q.tmp02.jpg

Source: Dares

1.5. To what extent are temporary contracts a ‘stepping stone’ to ‘permanent’ jobs (or those with standard contracts of employment of undefined duration)? Are apprentices and trainees typically taken on by the companies or other organisations concerned on standard permanent contracts once they complete their training? Has the situation changed over the crisis period? Please summarise any relevant studies which have been carried out in your country or other evidence at the national level which exists and give the reference to them.

There is a long lasting and controversial, political and academic debate if CDDs for new labour markets entrants are “pitfalls or trampolines”. Advocates stress that any employment for young people is better than none, whereas critiques stress abuses and point towards the comparably high rate of temporary contracts in France. The debate here must be more specific and will be limited to the two most popular temporary contractual arrangements for young people discussed above, professionalization contracts and apprenticeship programmes.

Data on the success of apprentices on the labour market are dated. The latest study available suggests that there was an impact of the crisis since, in February 2009, only 67.3% of recently graduated apprentices had found employment. This is an 8.5 percentage point decline in one year (75.8% in February 2008). The same data show that a completed apprenticeship reduces the likelihood of temporary employment. 63% of those young people that were successful in finding employment had a permanent contract, 24% were hired under temporary arrangements, 6% worked for an agency, and 7% had to rely on an assisted contract.

Young people of less than 26 years of age who successfully complete a professionalization contract are still more likely to be unemployed than their older colleagues, according to Dares. In 2008, 65% of former participants had found employment, 24.5% were unemployed, 7.2% economically inactive, and 2.9 in further training. Respective figures for people above 25 are 75.3%, 21.2%, 2.9%, and 0.6%. Moreover, those young employees that found a job are still substantially more likely to work on temporary employment. Only 57.5% were on permanent contracts, 25.1% worked on CDDs, 8.7% were agency workers and 8.7% on other assisted contracts. On the other hand, 72.4% of their older counterparts found a permanent job and only 15.9% a CDD only. Agency work was conducted by 10.2% and only 1.6% had to rely on another assisted contract. Finally, young people were also more likely than the older ones to interrupt the professionalization contract before successful completion (18.9% and 11.3%, respectively). Since these data were collected before the crisis and newer information is not available, it is not possible to assess the impact of the economic downturn on the role of temporary contracts as ‘stepping stones’ towards secure employment.

2. Access to social benefits

2.1. Does entitlement of young people to (contributory) unemployment insurance benefits and (non-contributory) unemployment assistance (i.e. benefits, usually means-tested, which provide a minimum level of income) differ if they are employed on temporary contracts as opposed to permanent ones? If so, please indicate briefly the differences in eligibility conditions and any differences between types of temporary contract (including those working as self-employed for a single employer). Have there been any changes over the period of the crisis?

Unemployment benefits may be claimed after the end of any of the contracts discussed above if the general conditions are satisfied, i.e. if the person concerned has worked for a total duration of at least 122 days or 610 hours during the preceding 28 months. The amount of the benefits received depends on the length of the contract and the salary received, and can be calculated on the official website of the public employment agency pôle emploi. Since the pay rate of these contracts is relatively low, the amount of benefits received after the end of the contract might be modest, as the following example illustrates. A young person between 18 and 21 years completing an apprenticeship for which they have earned €559 to €887 may claim net unemployment benefits of €414 to €657.

2.2. Does entitlement of young people to sickness benefits and maternity benefits differ if they are employed on temporary contracts as opposed to permanent ones? If so, please indicate briefly the differences in eligibility conditions and any differences between types of temporary contract (including those working as self-employed for a single employer). Have there been any changes over the period of the crisis?

All part-timers and people on assisted contracts are subscribed to the General Regime of the French Social Security System. Hence, they are covered by a health insurance, which includes invalidity and maternity protection, an insurance scheme in case of occupational accidents or illness, a retirement scheme, and the so-called family scheme that covers, among others, housing benefits.

2.3. Are there any differences in the entitlement of young people to old-age pensions between those employed in temporary jobs as opposed to permanent ones? If so, please indicate what these are. Have conditions of eligibility to pensions changed over the period of the crisis (including through pension reforms introduced as part of a long-term strategy to improve the financial sustainability of the system)?

In France, old-age pensions (basic scheme) are calculated based on the annual average earning of the ‘best’ 25 years of the person’s career. If temporary contracts are used as way to enter the labour market on a regular contract, the impact on the amount of the individual’s old-age pension should be limited, if existent. Long periods of temporary contracts may be problematical if the person earns a reduced salary (i.e. below the national minimum wage) for a long time. Moreover, the General Confederation of Labour (Confédération générale du travail, CGT) is concerned that pension contributions are only valid if the employee earns at least the equivalent of 200 times the hourly national minimum wage per quarter, or €7,544 per year (in 2013).

On the other hand, there might be macro effects on the financial sustainability of the system since some of the contractual arrangements discussed exempt employers from contributions to the national social security scheme. France has, however, introduced a tax-funding mechanism that covers parts of its social security expenditure, in particular the general social contribution (contribution sociale generalise, CSG) on individual incomes introduced in 1990.

2.4. Are there any differences in entitlement of young people to health care between those employed in temporary jobs as opposed to permanent ones? If so, please indicate what these are. Have conditions of eligibility to health care changed over the period of the crisis?

See above.

3. Regulation of temporary contracts and policies to support transitions into permanent contracts

3.1. Please describe briefly the regulations applying to the main types of temporary contract in your country. Do restrictions exist on the maximum duration of the different types of temporary contract for young workers or the number of times they can be renewed? Do these regulations differ by age (i.e. between young people and older workers) and/or by type of temporary contract (as mentioned in question 1.3), by occupation, or by sector of activity? Do special regulations exist for those completing apprenticeships or traineeships? Have the regulations changed over the period of the crisis – i.e. has there been a tendency for them to have been tightened or relaxed?

French law only allows temporary contracts (CDD) in the presence of a range of specified objective reasons justifying the need for a fixed-term employment contract (for instance for project work, replacement of another employee who is temporarily absent, seasonal jobs). The allowed maximum duration of the CDD is nine to 24 months depending on the reason that justifies the temporary employment. Apart from the special contracts discussed under 1.3 and later in this section there are no special CDD arrangements for young people. There is a special CDD for older workers that has been presented in another report (FR1210011). CDDs that have expired may not be renewed for the same tasks before a minimum period of one-third of the original duration of the contract (for instance three months after a nine-month contract)

Apprenticeship Contracts may be concluded for a period of one to three years; professionalization contracts last between six to twelve months. The latter may only be renewed if the trainee failed to obtain the expected degree or if they succeeded and want to achieve a superior qualification. Contracts under the schemes CUI-CIE and CUI-CAE may be concluded for a period of six to 24 months. Specific rules governing these contracts are discussed above.

3.2. Do incentives exists in your country to encourage employers to opt for standard rather than temporary contracts of employment, to convert temporary contracts into permanent ones or to make it easier for employees to move from temporary to permanent contracts? If so, please briefly describe the form that these incentives take. Do they apply equally to young people as well as to older workers? Are any incentives in place to encourage employers to take on young people who have completed an apprenticeship or traineeship on permanent contracts? Have there been any changes to incentives over the period of the crisis? Are any such changes being proposed or being actively discussed at present in your country?

Most notably, there were two recent policy initiatives aimed at encouraging employers to opt for standard rather than temporary contracts of employment for younger workers. First, the so-called Generation Contract (contrat de génération) was proposed on 12 December 2012 by the French Minister of Labour, Michel Sapin, and passed the National Assembly on 23 January 2013. The proposal was based on a collective agreement signed by all three national employers’ associations and all five representative trade union confederations in October 2012. The measure is aimed at providing incentives to companies to hire young people on a permanent basis while retaining older employees. Companies with less than 300 employees can apply for direct financial aid of €2,000 per year for hiring at least one young worker (not older than 25 years) on a permanent contract and another €2,000 for maintaining employment for at least one person of 57 years or more. The aid is granted for not more than three years (i.e. a maximum of €12,000 per company). In order to qualify for financial aid, companies with at least 50 employees shall conduct a collective agreement on the employment of young and old workers. Companies with 50 to 299 workers must only negotiate a company agreement if no sectoral agreement exists. If an SME is not covered by either, it does not qualify for financial aid. Companies with 300 or more employees shall conduct a company agreement and they may be fined if they fail to do so. The aim is to hire 500,000 young workers on permanent contracts in the next five years. The government allocates €2.43 billion for the programme between 2013 and 2016 (from €180 million in 2013 to €920 million in 2016). The French Senate, in which the ruling Socialist has a majority, approved the law on 6 February 2013.

The second recent initiative is a social partners’ agreement that is expected to be transformed into legislation in the next few months. The draft of an interprofessional agreement, which includes measures that are aimed at securing employment and, in return, introduces additional flexibility into sectoral collective bargaining was presented in January 2013. Concerning temporary contracts, the agreement proposes to increase employers’ contributions on CDDs in general, but to waive these contributions for up to three months for permanent contracts for young employees (under 26). More details on this agreement are given elsewhere (FR1301011).

3.3. Is the employment of young people on temporary contracts an important issue of concern for the social partners? Are there strong differences in attitudes and policies between employers and trade unions towards the use of temporary contracts? Have any initiatives been taken by the social partners, either jointly or separately, to encourage the use of permanent rather than temporary contracts? Have any specific initiatives been taken in respect of young people completing apprenticeships or traineeships over the types of job they are offered when their temporary position comes to an end?

Given the high rate of youth employment and young employees on temporary or other forms of precarious contracts, youth unemployment is a central concern of all social partners and the latest agreements are not the first ones that deal with the issue. In 2011, for instance, employers and four of the five representative unions signed an agreement on the insertion of young unemployed into the labour market. In the recent agreements (see above) both employers and unions did not oppose financial incentives for hiring young people on permanent contracts. It should be noted here, however, that the signatory unions paid a high price for this concession since they agreed, in the January agreement, on measures that might weaken and decentralise the French collective bargaining system to a significant extent (FR1301011Q).

Interestingly, France’s largest employers’ association, MEDEF that has expressed claims for substantive liberalisation of French labour law at numerous occasions seems to be more reserved when it comes to dismantling protection mechanisms for young people. In 2006, when the government tried to deregulate employment protection for young labour market entrants, MEDEF, although officially not opposed to the initiative, expressed some concerns (FR0605059I).

Temporary employees as a share of total employees aged 15-24, 2004-2011

 

% total employees

% point change

 

2004

2007

2009

2011

2004-2007

2007-2009

2009-2011

2007-2011

EU27

37.6

41.3

40.4

42.5

3.7

-0.9

2.1

1.2

BE

28.6

31.6

33.2

34.3

3.0

1.6

1.1

2.7

BG

15.3

10.3

9.3

8.3

-5.0

-1.0

-1.0

-2.0

CZ

18.0

17.4

18.7

22.3

-0.6

1.3

3.6

4.9

DK

26.9

22.5

22.8

22.1

-4.4

0.3

-0.7

-0.4

DE

55.5

57.4

57.3

56.0

1.9

-0.1

-1.3

-1.4

EE

:

:

:

13.8

 

   

 

IE

11.2

20.5

25.0

34.2

9.3

4.5

9.2

13.7

EL

26.3

27.0

28.4

30.1

0.7

1.4

1.7

3.1

ES

64.8

62.8

55.9

61.4

-2.0

-6.9

5.5

-1.4

FR

46.7

53.5

52.4

55.1

6.8

-1.1

2.7

1.6

IT

34.4

42.3

44.4

49.9

7.9

2.1

5.5

7.6

CY

16.1

23.3

18.4

17.2

7.2

-4.9

-1.2

-6.1

LV

17.3

9.3

9.3

10.7

-8.0

0.0

1.4

1.4

LT

13.8

9.8

5.0

9.1

-4.0

-4.8

4.1

-0.7

LU

24.1

34.1

39.3

34.5

10.0

5.2

-4.8

0.4

HU

15.1

19.1

21.4

22.9

4.0

2.3

1.5

3.8

MT

9.2

11.0

11.3

17.7

1.8

0.3

6.4

6.7

NL

37.9

45.1

46.5

47.7

7.2

1.4

1.2

2.6

AT

32.4

34.9

35.6

37.2

2.5

0.7

1.6

2.3

PL

60.6

65.7

62.0

65.6

5.1

-3.7

3.6

-0.1

PT

47.4

52.6

53.5

57.2

5.2

0.9

3.7

4.6

RO

6.6

4.6

3.7

5.8

-2.0

-0.9

2.1

1.2

SI

63.1

68.3

66.6

74.5

5.2

-1.7

7.9

6.2

SK

9.9

13.7

12.5

18.6

3.8

-1.2

6.1

4.9

FI

49.8

42.4

39.0

43.4

-7.4

-3.4

4.4

1.0

SE

53.1

57.1

53.4

57.3

4.0

-3.7

3.9

0.2

UK

11.0

13.3

11.9

13.5

2.3

-1.4

1.6

0.2

NO

31.2

28.0

25.7

24.3

-3.2

-2.3

-1.4

-3.7

Source: Eurostat, Labour Force Survey

         
Temporary employees as a share of total employees aged 25-29, 2004-2011

 

% total employees

% point change

 

2004

2007

2009

2011

2004-2007

2007-2009

2009-2011

2007-2011

EU27

19.5

21.1

20.2

21.4

1.6

-1.0

1.2

0.2

BE

12.4

13.1

12.5

14.6

0.7

-0.5

2.0

1.5

BG

9.0

5.3

4.4

4.2

-3.8

-0.8

-0.2

-1.0

CZ

9.8

8.1

8.4

10.8

-1.7

0.2

2.5

2.7

DK

16.5

13.9

13.8

16.4

-2.6

-0.1

2.7

2.5

DE

17.2

21.2

21.2

22.0

4.0

0.0

0.8

0.8

EE

3.0

1.8

4.2

4.2

-1.2

2.4

0.0

2.3

IE

3.4

10.1

9.5

12.7

6.7

-0.6

3.2

2.6

EL

18.4

16.1

19.9

19.0

-2.3

3.8

-1.0

2.9

ES

44.0

41.2

37.5

39.8

-2.7

-3.7

2.3

-1.5

FR

18.3

20.8

20.2

22.0

2.5

-0.6

1.8

1.2

IT

17.2

22.7

23.5

26.7

5.5

0.8

3.2

4.0

CY

19.2

17.7

16.2

18.1

-1.5

-1.5

1.9

0.4

LV

11.8

3.2

4.2

5.5

-8.6

1.0

1.4

2.3

LT

5.3

4.2

2.5

3.6

-1.1

-1.7

1.1

-0.6

LU

7.6

12.5

11.2

12.7

4.9

-1.2

1.5

0.3

HU

8.1

8.9

11.3

11.0

0.8

2.5

-0.3

2.2

MT

1.1

5.6

5.0

6.3

4.6

-0.6

1.3

0.6

NL

16.8

22.9

24.2

25.8

6.1

1.2

1.7

2.9

AT

10.0

8.8

9.6

9.8

-1.1

0.8

0.2

1.0

PL

33.8

38.7

35.6

38.9

4.9

-3.1

3.3

0.2

PT

30.3

36.6

38.6

39.2

6.3

2.0

0.6

2.6

RO

3.4

2.1

1.2

2.1

-1.3

-0.9

0.9

0.0

SI

30.7

33.7

34.1

33.9

2.9

0.4

-0.2

0.3

SK

6.8

5.7

4.1

7.7

-1.2

-1.6

3.7

2.1

FI

28.7

24.5

25.5

26.0

-4.2

1.1

0.5

1.5

SE

24.0

27.4

24.0

25.0

3.4

-3.3

1.0

-2.4

UK

6.2

7.1

6.3

5.0

0.9

-0.8

-1.3

-2.1

Source: Eurostat, European Labour Force Survey

       

Sebastian Schulze-Marmeling, IRShare

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