France: Renewing social dialogue
Two reports dealing with key aspects of social partnership in France have been submitted to the prime minister, Dominique de Villepin. They propose a range of measures designed to enhance the process of social dialogue, varying from relatively simple changes to recommendations that would fundamentally alter the landscape. We look at the content of the reports.
The first report, compiled by Raphaël Hadas-Lebel, a member of the supreme administrative court (conseil d'état), deals with the representativeness and financing of French unions. The other, submitted by Dominique-Jean Chertier, former adviser to Jean-Pierre Raffarin, prime minister between 2002 and 2005, addresses the modernisation of social dialogue.
Both reports were commissioned by De Villepin in December 2005 when he addressed the national collective bargaining commission (commission nationale de la négociation collective). This was within the context of seeking to improve the workings of a system in which many feel that the representative trade union organisations do not accurately reflect the workforce and are characterised by a lack of financial transparency and independence. Further, it is perceived that the social dialogue mechanisms need to be developed.
Report on representativeness
Hadas-Lebel's report On effective and legitimate social dialogue: the representativeness and financing of the professional organisations and unions (Pour un dialogue social efficace et légitime: Représentativité et financement des organisations professionnelles et syndicales), proposes two sets of reform scenarios - one envisaging "adaptations", or short-term goals, the other containing more substantial long-term changes or "transformations" - for four key topics. These are:
union representativeness;
the validity of collective agreements;
bargaining at small and medium-sized enterprises (SMEs); and
union finances.
The report highlights the low level of unionisation in France, which stands at roughly 5% in the private sector and 8% overall. France has the lowest union density rates of any Organisation for Economic Cooperation and Development member country. Although the level has remained constant for the past 12 years, over 25 years the rate has halved. Collective bargaining coverage is nevertheless extensive and union presence at enterprises is reasonably widespread, apart from in very small firms. In 2003, some 1.8 million workers were union members.
Representativeness
Five trade union confederations are recognised as "representative" by the labour authorities (CGT, FO, CFDT, CFTC and CGC). This status accords them a wide range of rights at national, sectoral and company level, which include the right to conclude collective agreements and to sit on certain consultative committees as well as to take part in running the unemployment benefit system, the social security and supplementary retirement funds and the vocational training organisations. At company level, they can conclude company agreements and are the only organisations that can put forward candidates for workplace elections during the first round.
Other organisations are required to "prove" their representativeness before being granted similar rights. However, these rights apply only at sectoral and company level, not at national level.
The representativeness criteria have not changed since the 1950s and include membership numbers, experience and patriotic attitude during the Second World War occupation.
As noted above, the report makes two sets of recommendations for each of the four issues covered, one to achieve a more measured "adaptation" scenario and the other aiming for a more radical "transformation".
On representativeness, the first set of suggestions, which would introduce a limited level of change, include:
revising the list of representative organisations on a regular basis, for example every four years after the workplace elections or every five years after the employment tribunal elections;
replacing the current, outdated, criteria of representativeness with: the level of influence and independence of unions (assessed by electoral success, membership numbers and finances), the activity and the experience of the organisation and its respect for the values of the republic; and
facilitating procedures for recognising those organisations (at branch or company level) that are not automatically and irrefutably recognised by the labour authorities.
The report proposes that a more radical transformation could be achieved by changing the criteria for defining representativeness to reflect the organisation's electoral results at sectoral or company level, while maintaining the existing right to representativeness at national multi-sectoral level. A further suggestion is to reconsider whether representative organisations should keep their monopoly to present candidates at the first round of workplace elections. The report suggests that the thresholds for representativeness could be set at 5% or 10% of the percentage of the workforce they represent.
Collective bargaining and the validity of agreements
The potential for the collective bargaining landscape to undergo significant change was created by the Fillon law of 4 May 2004 (EIRR 366 p.27), which allowed company agreements to derogate from rules fixed at a higher negotiating level even if this meant a worsening of terms and conditions for employees. This law also introduced the principle of a "majority" agreement (achieved either through a numerical majority of the employee representatives' votes or the absence of opposition) as a condition for the validity of accords. Previously, agreements were valid if signed by only one representative trade union. However, as yet, there has been limited use of this facility. A first assessment of the legislation is due on 31 December 2007.
In the reform scenario providing for modest levels of change, the report recommends that the social partners use this time to reflect on how to promote collective bargaining and increase representativeness by re-examining how the sectors are structured.
A more ambitious option would be to introduce a mechanism for validating an agreement based on unions' electoral representativeness (expressed in terms of workplace election results) and to abandon the distinction between the "majority of opposition" (the absence of opposition by a numerical majority of trade unions) and "majority of approval" (achieved through a numerical majority of the employee representatives' votes). It calls for this to be done across all the collective bargaining levels, where various majority rules apply.
The "weight" of those organisations not committing themselves one way or the other would not be added to those in favour - they would be understood to have constructively abstained. This "intermediate" system would be closer to a relative majority model, which would boost the legitimacy of accords without running the risk of obstructing them - as could happen if an absolute majority were required.
Finally, Hadas-Lebel's report proposes that a more fundamental transformation could be achieved by allowing the law to develop progressively towards the establishment of a "simple and comprehensible" system of majority approval for an accord (requiring at least 50% of the vote).
Bargaining in SMEs
The report notes that collective bargaining in SMEs is weak and their employees are poorly represented. Although there have been various attempts to promote social dialogue in SMEs, and the Fillon law introduces a new framework for atypical bargaining structures (through employees who have been elected or mandated), recourse to atypical forms of bargaining remains strictly limited and few company agreements provide such possibilities.
In the first place, the report suggests that bargaining at SMEs could be promoted by relaxing the rules set out in the Fillon law for concluding accords with elected or mandated employees. For instance, it proposes abolishing the requirement for a pre-existing sectoral accord before a company accord can be concluded and adjusting the rules on retrospective validation of accords concluded with elected employee representatives or mandated employees.
As for more far-reaching reforms, the report suggests replacing on an experimental basis the existing plethora of employee representative bodies at medium-sized enterprises with a single forum. It suggests either keeping the role of trade union negotiators for the conclusion of agreements or alternatively bringing the power to conclude agreements within this single forum.
Union finances
Union finances in France are characterised by a lack of transparency, in particular because the unions are not obliged to present annual accounts. Accordingly, it is hard to draw an accurate picture of where they obtain their money. The share of income coming from membership dues varies, from between 15% and 60% of the unions' overall revenue. Other sources of funding flow from their participation in various joint commissions.
The report's recommendations for moderate change include: extending the system of "union cheques", which allows employees to choose which union to support with a cheque given by their company; creating more transparency in the area of state funding, where the state is the employer; creating specific tax legislation for union organisations; and obliging them to publish annual accounts.
More radical changes include overhauling the tax system relating to union membership subscriptions and bringing in some form of state funding. A rather more controversial idea is to introduce an employers' social dialogue contribution in exchange for the abolition of other employer charges.
Reactions
Of those organisations that have expressed an opinion on the report, there is a clear division between the "representative" organisations and the others. The CFTC supported one idea in the report - holding workplace elections on the same day in all enterprises - but expressed its grave concern over the proposal that the representative organisations should lose their exclusive right to present candidates for the first round of workplace elections. It also reacted unfavourably to the ideas for promoting collective bargaining at SMEs and expressed its total opposition to the idea of a single representative body.
The CFE-CGC reiterated its proposal to introduce a "social engagement contract", which would, among other things, set out the conditions relating to retraining and job reclassification for private sector workers.
Unsa and FSU, on the other hand, which are both organisations that would see their sphere of influence increase, have a different view. Unsa welcomed the proposal to assess representativeness on the basis of electoral results as well as the suggestion to abolish the five representative unions' dominance at the first round of workplace elections. The FSU particularly welcomed the proposal for a "majority vote" on company accords.
The first employers' organisation to react was Upa, representing crafts employers, which expressed a "positive appreciation" of the recommendations to improve transparency and finance.
Report on social dialogue
Although analysts note that the incidence of strikes has been falling, the degree of social unrest has been increasing - as demonstrated by the violence and rioting in urban suburbs across the country in October and November 2005. There were also widespread protests on the streets against the first employment contract (contrat première embauche, CPE) earlier this year, which forced the government to abandon the measure (France: Social partners' views on labour market initiatives).
The other report commissioned by De Villepin, compiled by Chertier, is on modernising social dialogue (Pour une modernisation du dialogue social). Its starting point is that tripartism in France is "disorganised" and that the parties "do not speak the same language". It sets out a programme designed to invigorate and modernise social dialogue, stating that the country's lack of economic and social reform does not stem from a lack of will, but from the absence of a method with which to achieve it. It makes several suggestions, including planning the reform agenda in advance, creating the opportunity for concertation talks and reforming the social and economic council (conseil économique et social, CES).
The report notes that there is no mechanism for the social partners and the government to draw up a programme for the year's work and then carry it through - the only forum for the government to outline its programme of reform is for the prime minister to announce it in parliament. It therefore sets out a framework for social dialogue.
In the first place, it states that the social partners and the government should agree a long-term programme of reform, together with the means to achieve it. This programme would be prepared in conjunction with the parties concerned, in an informal manner and/or within the framework of the CES (see below).
To be updated annually, the national programme would also include reforms emanating from the European level.
More social dialogue
The second stage of Chertier's proposals addresses the need for the social partners to participate more fully in government reform proposals. Within the framework of creating more time for concertation, legislation would amend art. 39 of the French constitution to provide for at least a three-month concertation period between the announcement of a reform project and the adoption of a proposal by the council of ministers. However, Chertier notes that he would not wish to see too formal a process.
This concertation could lead to negotiations between the social partners on issues normally dealt with by collective bargaining, such as terms and conditions of employment, vocational training and employees' social guarantees.
Here, the government would launch the consultation by announcing its intention to reform employment law and publishing a document to support the concertation process. The social partners would have a month to communicate to the government whether they wished to participate in the consultation. If they did not wish to contribute, the government could then continue with its plans. If, however, they expressed the wish to participate, the government would have to wait.
There could, therefore, be a delay of up to three or four months, or longer, if it seemed likely that the parties were close to agreeing; during this "period of negotiation", parliament and the government would not be able to take any initiatives in the same area.
Government manoeuvre restricted by social partners
If, after the above process, no agreement is reached, the government regains the right to act on its own initiative. If, however, the social partners conclude a valid accord, the parliament will be unable to change the wording of the text and will either have to adopt it without any alterations or reject it, in which case it will have to justify its decision.
The report suggests that the best way of implementing the agreement is for the passing of legislation (loi d'habilitation) that grants parliament the power to enact the social partners' accord through an ordinance.
Chertier stresses that the proposed mechanism for agreeing and implementing an accord between the social partners will work only if the social partners are prepared to play an active role in the process. Further, the report notes that, although not directly part of this study, social partner representativeness and how accords are validated should be examined within the framework of the new procedures it suggests.
Fundamental reform of the economic and social council
The final recommendations contained in the report relate to a fundamental reform of the CES and the simplification of the social dialogue landscape.
The report notes that the CES should be able to fulfil its role in facilitating the achievement of the long-term agenda of reform (see above). It should therefore be more able to express different points of view. To achieve this, Chertier proposes reorganising the CES members into three "colleges": employee representatives; employer representatives; and representatives of "civil society". This would entail changing the nomination procedure for membership to the council as well as the system for renewing membership. Here, the report suggests renewing the membership one-third at a time. Individual mandates would last for six years and the composition of the council should be reviewed every 12 years.
Review of existing bodies
In a parallel exercise, the report suggests that parliament carry out a thorough reassessment of the existing concertation bodies. The report also proposes adopting legislation that would empower the government to simplify the consultation landscape - by abolishing or merging existing bodies - by means of an ordinance. At the same time, the government's secretary general would draw up a complete directory of the consultation bodies with details of their rules, guiding principals and membership composition.
Additionally, the report proposes that the proliferation of concertation bodies should be halted. This could be achieved by introducing a ceiling on establishing new concertation bodies by, for example, permitting the establishment of a new one only if another is abolished.
Finally, Chertier calls for the "profound renewal" of social dialogue in the public sector, relaxing its "excessive formalism" and thereby improving its effectiveness.
