France: Government assesses collective bargaining on older workers

In January 2010, the French Government assessed the progress of collective bargaining on promoting the employment of older workers. Employers and unions have been negotiating on this issue in response to legislation which imposes a fine on employers that are not covered by an agreement on older workers.

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Law promotes collective bargaining on older workers
Low unemployment rate for older workers
First assessment of bargaining
Social partner views
Metalworking agreement
Agreement at Rhodia

Law promotes collective bargaining on older workers

Legislation adopted in December 2008 called on employers and trade unions to conclude, by the end of 2009, sector- or company-level collective agreements on "active age management". These should lay down a concrete target on the employment of older workers to be achieved during the agreement's term, along with specific actions to promote the employment of this group, such as training, skills assessments, part-time work for older workers, recruitment measures and improved working conditions.

The law provides that, from 1 January 2010, all companies with at least 50 employees that are not covered by such an agreement on promoting the employment of older workers are subject to a financial penalty of 1% of their total paybill. To avoid the fine, firms with 300 or more employees must have their own company collective agreement on the issue or, where this is not possible, an equivalent action plan. Companies with between 50 and 299 employees may conclude their own agreement or introduce an equivalent action plan, or can be covered by a sector-level collective agreement on the issue. In December 2009, the Government gave firms of this size an additional three months to comply, with the deadline extended to 1 April 2010.

Low employment rate for older workers

France has one of the EU's lowest employment rates among older workers. According to the European Commission, only 38.3% of French people aged 55 to 64 were in employment in 2008, compared with an EU average of 45.6%, and the EU Lisbon strategy's target of an employment rate of 50% for this group by 2010.

A key factor behind France's low employment rate for older workers is that from the 1970s until the early 2000s there was a heavy reliance on early retirement to manage employment problems. According to the current Government, politicians were often happy to push workers into retirement prematurely in order to keep unemployment figures down, while employers used early retirement as an HR management tool in times of difficulty and trade unions often agreed to such measures as a means of resolving disputes over planned job cuts. The trend reached its peak in 1997 and 1998, when more than 100,000 employees retired early each year.

The Government started to address employment levels among older workers in an active way in 2006, when it launched a national action plan on the employment of "seniors". Since then it has put in place a range of measures aimed at keeping workers in employment longer, such as:

• making it easier for people aged 60 and above to combine paid employment with receipt of a state pension (60 is the statutory normal retirement age);
• encouraging people to work beyond the age of 60 by increasing their eventual state pension if they do so;
• preventing employers from forcing employees to retire before the age of 70; and
• abolishing the rule whereby older unemployed people were not obliged to seek employment.

The efforts to clamp down on early retirement have proved successful, and only 8,000 people were granted an early state pension in 2009, mainly on ill-health grounds as a result of exposure to asbestos.

The legislation promoting collective agreements on active age management represents the latest stage in the Government's approach to increasing older workers' employment rates. It has pushed ahead with the law's implementation, despite suggestions that this might be postponed owing to the economic crisis, and believes that a 40% employment rate for the over 55s can be achieved soon.

First assessment of bargaining

In mid-January 2010, the Government gave details of an initial assessment of the progress of collective bargaining to implement the older workers legislation. It found that 82 sectoral agreements had been signed, or were on the verge of being signed, at the beginning of the year. These accords covered 12 million employees, or around three-quarters of the private sector workforce. Examples include agreements in metalworking, chemicals, construction, transport, the food industry, the large-scale retail sector and property services. Around 8,000 company-level collective agreements or action plans had been registered with the labour authorities by the end of 2009. Major companies with agreements include Carrefour (retail), EADS (aerospace and defence), France Telecom (telecommunications), PSA Peugeot Citroën (automotive), Rhodia (chemicals) and Société Générale (banking).

The Government sees these figures as indicating that its initiative has been successful. It describes the agreements as having a "quality content", not merely observing the minimum legislative requirements but also introducing innovations. Examples highlighted by Laurent Wauquiez, the secretary of state for employment, include:

• a right for older workers to switch to part-time work in many sectors;
• increased training provision in the chemicals industry and at Société Générale (where the number of older workers with access to training will be increased by 30%);
• measures to prevent physically arduous work in the large-scale retail sector;
• the development of tutoring schemes in metalworking; and
• the introduction of part-time work without loss of pay in the period up until retirement at Carrefour, along with the possibility for older workers to move from night to day work. 

Overall, according to the Government's assessment, 80% of agreements include measures on developing skills and qualifications, access to training and tutoring; three-quarters of agreements provide for the anticipation of older workers' career development; and half introduce schemes for managing the final stage of employees' careers and improve older workers' working conditions. Other "positive" measures identified include a reduction in night work for employees aged over 55 and training in avoiding age discrimination in recruitment.

Wauquiez stated that a "new dynamic" is emerging in France, with bargaining now focusing on giving older workers access to employment rather than on pushing them out of the labour market, as was previously the case. "This long-term battle requires great stubbornness, because it means changing our vision of society," he added.

Social partner views

Trade unions are generally dubious about whether or not negotiations held under the threat of a financial penalty are leading to genuinely ambitious or innovative measures on the employment of older workers. They believe that many employers are seeking to do the minimum possible to avoid paying a fine of 1% of paybill, and to avoid binding commitments. Unions see many company agreements as lacking ambition, while sectoral agreements, although generally having a better content, lack the means to ensure their implementation at company level.

The CGT union confederation is particularly outspoken in its criticism, describing the Government's initiative as a "vain effort", and pointing out that firms with fewer than 50 employees are exempt and that those with between 50 and 299 employees have been given an extra three months to comply. For the CGT, the main obstacle to the employment of older workers is a general lack of demand for labour in the current economic crisis, and a reluctance among most employers to recruit older staff. Further, the CGT, along with some other unions - notably the FO confederation - still believes in the value of early retirement in some circumstances, at the very least for employees who have worked in arduous conditions during their careers.

Employers' representatives are very critical of the method chosen by the Government to achieve its objectives. While accepting that attitudes to older workers need to change, Jean-François Pilliard, an official at the Uimm metalworking employers' organisation, stated that "it is particularly inappropriate to force the social partners to negotiate in these conditions", under the threat of a "very substantial" fine of 1% of paybill. If companies have to pay this penalty, it would be to the detriment of wider employment policy, notably the recruitment of young people, and companies' pay policy, he argued. According to Pilliard, such a large penalty is particularly inappropriate in the current economic climate.

Metalworking agreement

A notable example of a sectoral agreement on older workers is the one signed on 4 December 2008 in the metalworking industry by the Uimm sectoral employers' organisation and trade unions affiliated to four of the main confederations - CFDT, CFE-CGC, CFTC and FO. The metalworking/engineering industry is made up of 45,000 companies with a total of 1.8 million employees, although the economic situation means that the workforce is falling and likely to continue to do so for several years. In this context, the accord aims - over its three-year term - to increase the proportion of the industry's workforce who are aged 55 or above from the current 11% to at least 12%, and the proportion aged 58 and above from 3% to at least 5%.

The agreement provides for a communication campaign aimed at employers and employees, to raise awareness of "the need to prolong careers beyond the age at which the great majority of metalworking employees cease work, which is 58 years". The campaign will focus on the pension benefits of working longer, the possibility of reorganising the working hours of older workers (for example, switching to part-time work), and the option to combine work with receipt of a pension. Where older workers move to part-time work in the last five years before retirement age, employers should "examine the possibility" of continuing to make pension contributions on the basis of the former full-time pay.

The awareness-raising campaign will be accompanied by the distribution of a guide highlighting good practices in avoiding age discrimination in recruitment. The guide will encourage employers to pay particular attention to applications from people aged 45 and above, to adapt their recruitment methods to target this group, and to use public subsidies that may be available to support the employment of older workers. Metalworking companies are also encouraged, by 2012, to treble the number of [Article:98434#5.7 ""professionalisation" contracts"] offered to unemployed people over the age of 45. These are a specific form of employment contract whereby employees receive both work experience and training, leading to a recognised vocational qualification.

The agreement promotes the use of five-yearly "second part of the career" interviews, whereby older workers' skills, experience and qualifications, and their needs in these areas, are assessed and the options for the remainder of their career are examined. Information on this scheme will be provided to companies and employees, and employers will be encouraged to provide training for those conducting the interviews. The agreement states that the last interview before an employee is due to retire should include an evaluation of the skills and know-how that he or she should pass on to other employees before retirement. Further, a scheme will be developed whereby older workers may, where appropriate and by agreement with their employer, try out a new job in another company, with a possibility to return to their old job if necessary.

The accord aims to increase, from 31% to 35%, the proportion of employees aged over 45 undertaking training, mainly by using "professionalisation periods" (a scheme aimed at current employees, with similar content to the professionalisation contracts for unemployed people) and the statutory [Article:98434#5.2 ""individual right to training""] (whereby employees are entitled to 20 hours of training a year). Further, the proportion of employees over the age of 45 obtaining a professional qualification should be increased from 7% to 10%, using a range of existing training schemes.

Employers are encouraged to implement or strengthen a systematic policy aimed at preventing health and safety risks and improving the quality of working life, and especially to remove or reduce the arduous aspects of certain types of work (a list of which is provided in the agreement, including exposure to various chemical and physical agents). The accord stresses a preventive approach to reducing these arduous aspects, setting out prevention measures applicable to each and promoting the use of "organisational tools", such as reorganising working hours. It also encourages action to ensure the "traceability" of the risks to which employees have been exposed, through employers keeping records of, for example, exposure to chemical agents. Further, the agreement provides for the development of preventive ergonomic measures applicable to all work-stations.

The success of this policy of improving working conditions will be measured through an assessment of the industry's occupational health statistics, and special attention will be paid to "psychosocial" risks (that is, those linked to stress).

While the agreement's main focus in this area is on prevention, a working party will examine the issue of whether or not employees who have worked in arduous conditions during their career should be able to cease work before the normal retirement age.

Finally, the agreement promotes the use of older workers as tutors for other employees, enabling them to pass on their skills and know-how to the benefit of the company, while at the same time allowing them to diversify their role at work. By the end of the agreement's term, at least 20% of tutors for employees on professionalisation contracts should be over the age of 45. However, the accord states that age should not be the sole criterion for selecting tutors.

Agreement at Rhodia

An example of a recent company agreement on older workers is a three-year accord on the "second part of employees' careers" signed at the Rhodia chemicals group on 15 December 2009 by management and three unions (CFDT, CFE-CGC and CFTC). Rhodia has around 5,000 employees in France and one-third of them are over the age of 50. The agreement provides for the further recruitment of older staff: while 4% of employees recruited in 2007 and 2008 on open-ended contracts and fixed-term contracts lasting more than three months were over 50, this will increase to 6% over the 2010-2012 period, and the company has an eventual target of 8%.

The agreement places on a formal footing good practices that Rhodia has already developed to promote the employment of worker aged over 50. The main provisions are:

• To ease the transition from work to retirement, the agreement introduces a scheme known as part-time "grandparental leave". This will enable employees over the age of 50 to reduce their working time to as little as 80% of full-time hours, using time off saved in a working time account to offset their loss of pay. In return, the employees must commit themselves to remaining in employment after the age at which they qualify for a full pension, for a period at least equal to the time off they have taken as grandparental leave.
• Employees aged 45 and over will be provided with "second part of the career" interviews and skills assessments.
• Older employees involved in continuous shiftwork will be given priority in applying for newly vacant day-work positions.
• The proportion of employees agreed over 45 receiving training, which is currently little more than half the average for all Rhodia employees, will be increased to this average.
• The proportion of older workers among tutors for young employees and trainees will be increased from 26.7% to 33.13%. In addition, a "reverse tutoring" scheme will be introduced whereby younger employees will help older staff in areas such as computing, new technologies and languages.
• Rhodia will include a specific clause on non-discrimination against older workers in all contracts that it signs with recruitment agencies.
• The company will introduce a specific section on its website aimed at encouraging the over-50s to apply for jobs.

This article is based on material provided by Christophe Boulay, European correspondent for XpertHR.

European employment policy, practice and law, February 2010