France: Latest developments in working life Q1 2019

The ongoing gilet jaunes crisis, the launch and conclusion of a wide national debate, reforms to the unemployment insurance scheme, and efforts to reduce the gender pay gap are the main topics of interest in this article. This country update reports on the latest developments in working life in France in the first quarter of 2019.

Wide national debate to tackle the gilets jaunes crisis

The protest movement of the gilets jaunes (yellow vests) continued throughout the first quarter of 2019, with demonstrations organised every Saturday despite the measures announced by President Macron in December 2018. [1]

In an effort to halt the protests, President Macron launched a ‘wide national debate’ in January 2019. The aim of the debate was to consult with French citizens on four key themes and allow them to present their claims. This unprecedented exercise ended in mid-March with nearly 2 million online contributions having been collected and more than 10,000 local meetings organised. The four themes proposed by the government were:

  • taxation
  • the organisation of the state and public authorities
  • the transition to sustainability
  • the functioning of democracy.

(While topics relating to industrial relations and working conditions were not part of the initial themes, they were mentioned in a summary of the contributions.)

The requests from the participants included:

  • limiting the number of fixed-term contracts
  • reducing wage disparities within companies
  • safeguarding jobs in France
  • reducing social security contributions to decrease labour costs
  • sharing wealth more effectively for the benefit of employees
  • ensuring a more prominent role for non-governmental organisations such as trade unions and employer organisations

President Macron held a press conference on 25 April where he explained his plan. He described his target of 7% unemployment by 2022, with full employment by 2025, as ‘perfectly achievable, especially if we continue the reforms’. He feels that the French must work harder, a stance that is believed to be based on a 2015 study by Coe-Rexecode that ranked France last among the EU Member States for average effective annual working time of full-time employees. However, this ranking does not match similar rankings from the Organisation for Economic Cooperation and Development (OECD) or Eurostat. [2]

One of the president’s suggestions was to extend the reference period for full pension rights without changing the current legal retirement age from 62 years. Additionally, he announced that pensions of less than €2,000 will be indexed again in line with inflation as of 1 January 2020, while all pensions will be indexed with reference to price increases from 2021. The exceptional purchasing power bonus, created in 2018, will be renewed, with employers again invited to pay the €1,000-bonus, accompanied by tax and social security exemptions, to boost the purchasing power of households. Finally, President Macron announced that all stakeholders will work together to propose ‘concrete solutions’ to fight against injustices in terms of access to employment by September. For example, the president cited the case of young people in rural areas who cannot find apprenticeship contracts, as they are not able to move to another city and find accommodation for financial or/and transportation reasons.

The reaction of social partners to the conference was muted. The French Democratic Confederation of Labour (CFDT) noted that while ‘the president has changed his stance on several points ... there is a lack of strong and engaging announcements on the ecological emergency’. Philippe Martinez, General Secretary of the General Confederation of Labour (CGT), stated that the president ‘does not tackle the real problems, i.e. how to share wealth more effectively.’

Employer organisations – the French Small and Medium-sized Employers’ Organisation (CPME) – voiced their regret that the president did not make reference to the tax burden experienced by small businesses. The Movement of the Enterprises of France (MEDEF) declared that financing tax reductions by removing tax credits for companies was ‘totally unacceptable’.

Reforming the unemployment insurance scheme

On 26 February, the government presented the timetable and method for reforming the unemployment insurance scheme, following the failure of negotiations between social partners (the social partners particularly disagreed on solutions supported by the government).

The government proposed a bonus–malus mechanism for social contributions paid by employers. This would mean that those who use the shortest fixed-term contracts (of less than 3 months’ duration) pay higher social security contributions than those offering permanent employment contracts.

The government consulted social partners in order to explore different issues and develop shared solutions. In the second quarter of 2019, Prime Minister Édouard Philippe will reveal the selected parameters and measures that will then be implemented by a decree to be adopted by the government during the summer.

The government's intervention is seen as a desire to nationalise unemployment insurance by reducing the role of social partners. President Macron called on the government to carry out ‘the most ambitious possible reform of the unemployment insurance system’ this summer and added that ‘it is about building rights and duties for companies and jobseekers. It is a profound lever for returning to work and fighting injustices’. [3]

Government seeks to reduce gender pay gap

The implementation of the government’s new measure to help reduce the gender pay gap has had mixed success. [4] With this measure, the employer must evaluate its performance in terms of equal pay, publish the results on its website, forward them to employee representatives and give itself an overall score. However, 50% of companies with at least 1,000 employees had not reported their results by the deadline of 1 March, according to the Minister of Labour, [5] despite the fact that failure to do so potentially carried a financial penalty of up to 1% of the company’s total payroll. To strengthen the system, the government adopted a decree to sanction the failure to publish results or to define corrective measures in the event of insufficient results.

 


Footnotes

  1. ^ Eurofound (2018), France: Latest working life developments Q4 2018 .
  2. ^ Le Monde (2019), Non, les salariés français ne travaillent pas moins que leurs voisins , 29 April.
  3. ^ Le Monde (2019), « L’Etat a bien nationalisé l’assurance-chômage » , 4 March
  4. ^ Eurofound (2019), France: Latest working life developments Q4 2018
  5. ^ Les Échos (2019), ‘ Egalité professionnelle : une entreprise sur deux n'a pas publié son index dans les temps’, 3 March

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