France: Social partners reach deal on "emergency" employment measures
France's main employers' organisations and trade union confederations reached a national cross-industry agreement in July 2009 on managing the employment consequences of the economic crisis.
On this page:
Tackling the employment crisis
Short-time work
Employee leasing
Internal mobility
Schemes for redundant workers
Help for vulnerable groups
Reactions.
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Key points
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Tackling the employment crisis
During the economic downturn, the French unemployment rate has risen sharply, from 7.7% in June 2008 to 9.4% in June 2009, according to Eurostat, while the number of people in employment fell by 2.5% in the year to the end of the second quarter of 2009, according to Insee, the national statistical institute. In response, the main trade union confederations and employers' organisations decided in May 2009 to open negotiations over a national cross-industry agreement on the "social management of the consequences of the economic crisis for employment". The talks proceeded rapidly and an agreement on "emergency" employment measures was reached on 8 July. Further negotiations will be held on "structural" measures to facilitate and accompany a future economic recovery.
The accord builds on a number of employment initiatives taken by the Government and social partners during 2008 and 2009. It provides for supplementary measures aimed at "limiting the employment consequences of the economic crisis to the greatest extent possible". These measures aim to:
- help in to "maintain the contractual link" between employers and employees during periods of reduced activity;
- provide more secure paths back into employment for workers who have lost their jobs;
- mitigate the effects of the economic crisis on "the most exposed categories of people"; and
- enhance qualifications and skills.
All of the agreed measures are temporary in nature and will expire on 1 January 2011, and many require implementation by the Government through legislation.
Short-time work
France's state-funded short-time work benefit scheme (chômage partiel), which has recently been strengthened by the Government provides compensation for workers whose earnings are cut because their employer temporarily closes all or part of its business, or reduces collective working hours because of economic difficulties or exceptional circumstances. The general rate of the benefit is 60% of normal gross pay for the unworked hours, increasing to 75% if the company concerned signs a "long-term partial activity" agreement with the state. In such cases, the company must continue to employ the workers involved after the short-time work, for a period of at least double the length of the duration of the short-time work, and must hold interviews with the employees concerned to discuss training needs.
In their agreement, the social partners stress the value of short-time work in avoiding redundancies and allowing companies to retain and develop the skills that they will need when the economy recovers. The agreement states that the scale of the economic crisis means that the scheme should now be further strengthened. The partners therefore call on the Government to extend and simplify access, and to promote training to improve the skills of workers on short time.
The agreement asks the Government to extend short-time work to certain groups of employees whose work organisation does not currently allow them to benefit. Notably, this includes employees whose employer reduces their working time to less than 35 hours a week (the statutory normal working week) on an individual basis, by rotation, as part of a collective working time reduction scheme. This is aimed at service sector businesses, such as shops, that at times of reduced demand cannot simply close temporarily or cut the hours of large numbers of staff at the same time, as factories can. The short-time work scheme is currently designed mainly for the needs of manufacturing industry, and the effect of the change proposed by the social partners would be to adapt it to services. Companies using the new rotating working-time reduction scheme would have to consult employee representatives and, if they employ more than 250 workers, sign a long-term partial activity agreement (see above) with the state.
The accord recommends that all companies that sign a long-term partial activity agreement should also conclude a collective agreement with trade unions on ways of improving the skills and qualification of employees on short-time working, and of making their future career paths more secure. Such agreements could also enable employees on short time to volunteer to act as a mentor or trainer for apprentices and other trainees, both within the company and in its surrounding area. These agreements would meet some of the requirements imposed on companies that conclude long-term partial activity agreements with the state.
The training provided by companies to employees on short-time work should, according to the agreement: focus on improving basic skills; lead to a recognised qualification; and/or enhance transferable skills. Transferable skills include teamworking, foreign languages and ability to use information and communications technology.
The social partners recommend that periods of short-time work should not have a negative effect on payments to employees under statutory financial participation arrangements - that is,"participation in results" profit-sharing schemes and "pay related to company performance" plans. These payments are set as a proportion of employees' normal pay, and the agreement calls for periods of short-time work to be counted as fully paid periods for the purposes of calculating the payments
The agreement asks the Government to simplify the administrative procedures that companies must observe in applying for short-time benefit, especially for firms with less than 250 employees. They also want it be easier to renew short-time working arrangements, and for official authorisation and reimbursement of payments to be faster.
Short-time benefit is currently payable for a maximum of 800 hours per employee per year, except in the automotive and textiles industries, where a 1,000-hour limit applies. The social partners call on the Government to increase the maximum to 1,000 hours in all sectors.
Employee leasing
French employment law allows for an arrangement known as "employee leasing" (prêt de main d'oeuvre), whereby a company temporarily places a number of its employees at the disposal of another company. This is permitted if the company lending out the employees does not make a profit from the arrangement. Interest in employee leasing has increased in the current recession and the cross-industry agreement acknowledges that it can be useful in avoiding short-time working or redundancies.
As the current statutory provisions on employee leasing are rather sketchy, the agreement lays down a number of rules and procedures aimed at providing a clearer and more secure framework for the practice and allowing its greater use. The main provisions are as follows:
- During employee leasing, the employer (the leasing company) places the employees concerned under the authority of the user company. This must be based on a contract between the leasing company and the user company. During the period of leasing, the employees' employment contracts with the leasing company remain in place and are not broken or suspended.
- The not-for-profit nature of employee leasing means that the leasing company may charge the user company only for the employees' wages and social security costs for the period concerned, plus any additional payments made to the employees as a result of the leasing arrangement.
- Employee representatives must be informed and consulted by the leasing company prior to any decision to lease out staff. Similarly, the user company must inform and consult representatives about its intention to take on leased employees.
- During the period of leasing, employees leased to a user company remain covered by all rights and advantages arising from collective agreements applicable to the leasing company, and from custom and practice, and by any individual guarantees from the employer, just as if they were still working at the leasing company's premises.
- A leasing company and a leased employee may agree that the arrangement will be subject to a probationary period.
- If employee leasing involves a modification to the employment contract, or lasts longer than eight months, the employee must agree expressly to the arrangement in advance. In such cases, refusal by the employee to be leased out may not lead to any detriment or dismissal.
- The agreement between the leasing company and the
user company must specify:
- the planned duration of the leasing;
- the identity and qualifications of the leased employees;
- the work to be carried out for the user company;
- the working time arrangements applying in the user company;
- the place(s) where the work is to be carried out;
- the specific characteristics of the workplace and any particular health and safety risks involved;
- the details of any personal protective equipment that the employees must use;
- that the leased employees will, during the leasing period, have the same access as the user company's employees to transport facilities and other collective services, such as canteens, in that company, and;
- the amount of wages, social security contributions and other payments to employees, for which the leasing company will charge the user company.
- At the end of the leasing period, the employees will return to their former job with the leasing company, and may suffer no detriment in terms of career development or remuneration.
- Any additional costs for leased employees arising from the leasing arrangement must be met by the leasing company.
Internal mobility
The agreement describes geographical and occupational mobility within a company, or group of companies, as making an important contribution to employee's job security and career development. The accord provides that all companies which are currently obliged by law to hold negotiations with unions at least every three years on the "forward-looking management of employment and competences" (gestion prévisionnelle des emplois et des competences, GPEC) - that is, companies with 300 or more employees - should put in place measures to promote such mobility, such as internal "job exchanges".
The same companies should also introduce a scheme known as the "mobility experimentation period", whereby employees can try out another job. Company-level collective agreements should lay down the details of this scheme, under which the employees concerned would be able to return to their old job, or a similar one, if the new arrangement does not prove satisfactory. Where no agreement can be reached, employee representatives should be consulted on the scheme.
Schemes for redundant workers
The agreement calls on the Government to extend to employees on fixed-term contracts and temporary agency workers an existing scheme known as the "vocational transition contract" (contrat de transition professionnelle, CTP). This contract, between a redundant worker and the public employment services, allows the former to combine looking for employment with attending training courses and carrying out periods of work for up to 12 months, while receiving a benefit worth 80% of previous pay. The scheme applies in areas particularly hard hit by unemployment, and the Government has recently extended its scope from 25 such areas to 40.
The accord also seeks improvements in benefits under another scheme aimed at helping redundant workers back into employment, the "personalised reclassification agreement" (convention de reclassement personnalisé, CRP). Currently, CRP participants receive 80% of previous pay for eight months, then 70% for the remaining four months of the scheme. The agreement provides for a benefit of 80% for all 12 months, harmonising the scheme with the CTP.
Help for vulnerable groups
The agreement contains a range of measures aimed at helping the groups most badly affected by the economic crisis, such as low-skilled workers, older people and young people. These focus mainly on optimising the use of various existing schemes that seek to keep these groups in employment, find them new jobs, or help them enter the labour market for the first time. For example, the agreement:
- asks the public authorities to bring forward to 2009 spending scheduled for 2010, in order to enable authorised training bodies to provide extra training for priority groups, such as long-term unemployed people and employees affected by short-time work;
- provides for improved information on youth employment and training opportunities, aimed at both employers and young people;
- suggests that young workers employed by small and medium-sized firms with limited resources could receive training in large companies' training facilities;
- requests that the joint union-employer sectoral training funds that exist in many industries be allowed to finance the completion of training for young workers who are made redundant during the course of a work/training contract;
- calls for the recently created Social Investment Fund (Fonds d'Investissement Social, Fiso) to fund work experience placements (including mentoring by older employees) for unemployed young people;
- increases the monthly subsidy to finance mentoring/tutoring for young trainees from €230 to €345 per mentor, where the mentor is an employee aged 45 or above;
- provides that employees aged 45 or above who are on short-time work are automatically able to use their statutory entitlement to 20 hours of training per year (under the "individual right to training" scheme) during the period of short-time work, with their employer unable to refuse such requests; and
- asks the Government to increase the "solidarity" benefit paid to unemployed people who have exhausted their entitlement to unemployment benefit, and to give this group priority in training efforts.
The agreement also sets up four joint working groups to examine: the calculation of short-time benefit; promoting geographical mobility among workers, looking particularly at the obstacle presented by the housing problems faced by young people; ways in which companies may group together to tackle employment issues jointly; and the position of unemployed people who have exhausted their unemployment benefit entitlement. The work of these groups will feed into the negotiations over structural employment measures during autumn 2009.
Reactions
The cross-industry agreement on emergency employment measures has been signed by all three national employers' bodies - Medef, which is the main general employers' confederation, along with CGPME, representing small and medium-sized firms, and UPA, representing crafts sector employers. Four of the five main national trade union confederations have also signed up - CFDT, FO, CFTC and CFE-CGC. Only the CGT union confederation has rejected the accord.
The Government has indicated that it will issue the decrees necessary to implement the agreement as quickly as possible.
Medef commented that the agreement sets out "urgent, pragmatic and innovative measures that will improve the situation of the people most affected by the economic crisis". It said that the strengthening of the short-time work scheme will help prevent redundancies, and that young people seeking to enter the labour market for the first time will now benefit from tailored employment and training solutions.
The CFDT union confederation described the agreement as a "first step", laying down "modest but concrete" emergency measures for the workers most exposed to the crisis, and hopes that the forthcoming talks on structural employment measures will produce significant results. The FO stressed the financial benefits of the agreement for employees on short-time work or on CRP contracts, while the CFTC was particularly pleased with the training measures agreed for workers on short time. The CFE-CGC, which represents managerial and professional staff, decided to sign the agreement despite the employers' refusal to meet its key demand: giving access to short-time work for employees on "inclusive" working time contracts - the arrangement, common among managers, whereby employees' work a certain number of days a year, including overtime, with their working time not otherwise measured.
The CGT, which rarely signs national cross-industry agreements, regards the new accord as being inadequate to deal with the current employment crisis. It is not opposed to the extension of the short-time work scheme, but regards the employers as being "very generous with public money" in this area, while being rather more careful with their own. The CGT wants reinforced monitoring of the use of short-time work, to prevent abuses by companies.
This article is based on material provided by Christophe Boulay, European Employment Review correspondent for France.
European Employment Review 428 (EER 428) contents
