The french labor reform: a story of power relations, fears and incoherences

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The French labor reform triggered controversies and serious opposition from labor unions and students. The draft bill, envisioning to help firms getting around easier the 35-hour work week, limiting severance payouts and reducing unions’ power to block company moves, has as an objective to safeguard and promote the competitiveness of businesses operating in France by giving them enhanced flexibility when hiring and dismissing workers.

Perceived by many opponents as a social regression, the government was obliged to revise its version of the draft bill and to postpone its official adaptation in the council of ministers. The bill, currently in discussion in the national assembly, faced and continues to face massive resistance in a country where, due to one of the weakest unionization rates in Europe, the judge is often perceived as the ultimate safeguard of workers’ rights.

Ab initio, the executive paved the way for the debate to become highly explosive and to some extent biased. Its communication on the bill has been a disaster. From the leak of the draft legislation to the possibility considered to use the controversial article 49-3 of the Constitution to adopt legislation even without the necessary majority, it was hard to start off worse. Desolating as well are the political egos that transcend the law. Indeed, the government proved itself to be very aggressive on the communication of the bill and its key measures. Since prime minister Manuel Valls wanted to stand as the top social-democrat reformer of the government in place of the minister of economy, Emmanuel Macron, representing a serious political opponent in regard to Valls’ future political career, the latter was not allowed to push through the legislation himself as initially planned.

To this end, the draft bill was transferred to the new labor minister, Myriam El Khomri, easier to control for the prime minister. The petty wrangling of party politics largely influenced the biased debate around the law. In fact, by drafting the bill before consulting the social partners, the government wanted to demonstrate its determination to push the bill through the legislative process as fast as possible. It, however, neglected the highly explosive institution the French labor law “code du travail” represents. Indeed, several thousands of citizens, unionists and students decided to take the streets to protest against a reform they considered to violate long-established social rights. As a result, the new version of the text the government was forced to revise no longer imposes a cap on severance pay for dismissed workers, a measure many companies argued would have abolished the variable costs of laying off employees. Instead, new limits are introduced as non-binding guidelines for labor courts. Likewise, the government decided to impose additional taxation on short-term contracts and finally denied to grant employers of less than 50 workers the ability to take unilateral decisions without a company agreement applying to workers subjected to on-call duty or pre-assigned overtime remuneration.

Denouncing inequality in its core

If student and labor unions that initiated large protests have in common the opposition to a law in contradiction with their vision of social labor rights, they find themselves however in very different positions on the job market. In reality, nothing could oppose labor unions and students more. Indeed, if the former want to protect their members from a more flexible long-term working contract (CDI), it is, nonetheless, possible to raise the question to why the latter are protesting against the bill and their motivation to do so. In fact, students who enter the job market have been increasingly exposed to precarious contracts, mostly short-term contracts, the so-called “CDD”.

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The injustice against young people in the access to the job market is blatant. Nowadays, 90% of all employed workers in the job market get employed via a short-term contract, interim (replacement) or apprentissage (internship) and most of them are first-time job seekers. As a result, it became a routine, if lucky enough to find employment in the first place, to go through several internships and short-term contracts before eventually getting hired on a long-term contract. Very often, the reality for young people employed under these conditions is equivalent to significant difficulties in acquiring bank loans and building up their life and the private or professional projects going with it.

The access to the job market is thus divided into two categories: the workers employed on long-term contracts and the workers employed on short-term ones. Instead of pointing out the disparity resulting from this existing inequality in the access to employment, student unions, driven by the major labor unions, decided to fight the enhanced flexibility the reform designed on long-term contracts. If it is entirely understandable that student unions are willing to combat the increased flexibility resulting from the reform and regarding long-term contracts, it is however not justifiable not to fight for the rights of their generation exposed to even greater precarity.

As thing always seem to happen when you least expect them, student protests, even if ambiguous in their claims, resulted in a positive outcome for the young generation. Indeed, the government introduced a provision into the bill planning to raise taxation on short-term contracts, and thus to discourage employers from hiring on long-term contracts when possible. If students were not protesting for their rights in the first place, the government, in the end, took a progressive and courageous measure in bringing closer the two main working contracts provided by French law, the long-term contract CDI and short term contract CDD.

Flexibility and equality go together in a single employment contract

In fact, the difference between workers employed in a CDD and a CDI cannot continue if we want to stick to the reality of the job market today and reduce intergenerational injustice which is a crucial matter related to it. The two different working contracts should merge into one and only, more flexible contract, with a non-renewable internship possibility of maximum six months, and provide limited exceptions for replacement workers (interimaire) or seasonal workers, justified on objective, valid economic reasons. If this seems delicate to implement on a political level regarding the significant resistance the law already faces, it represents, however, the most efficient way to increase flexibility while insisting on more equal working conditions for everyone and thus reduce unemployment and precarity.

Precarity is what we have today; more flexibility is what can turn the tide tomorrow

A single, more flexible working contract does not have to be mixed up with more precarity. Everything depends on the conditions that are attached to it. If it is an economic necessity for a company to lay off a worker, it should have the right to do so more easily, encouraging de facto businesses to take higher risks when the order books are well furnished and thus to employ. If the laying off is not justified by an economic necessity nor a serious professional fault, an accurate compensation regarding several months of salary will have to be granted to the worker, making it possible for the latter to look for the next job in reasonable conditions.

In addition to this, if necessary, essential or continuous training has to be encouraged to restrain the inactivity period to a strict minimum. The termination payments should be fixed in advance, as it is considered for now, on a progressive scale with a more generous compensation, avoiding laid off workers to fall into precarity before finding the next job. Talking about precarity, there is nothing more precarious than a total unemployment rate of 10% with youth unemployment brushing past 25%. Thus, there is nothing more unjust than the status quo. The need to radically rethink the perception of today’s job market is of primary importance. Flexibility is undeniably part of the solution.

The “code du travail” should prescribe a clear framework for workers rights, termination benefits and set the borders of national as well as sectorial negotiations. It is not sustainable that employers need to be specialized lawyers in labor law to understand the legal situation they find themselves in.

Increasing the representativeness of labor unions is key

A more flexible working contract implies as well to revise the terms of the agreement regarding the economic situation in the sector. If a company does well in an economic sector that does well, workers should be able to profit from it by being granted better working conditions. On the contrary, it is also necessary to make apparent concessions to allow the company and the sector to get back on track.

To make this happen, it is, nevertheless, necessary to increase the representability of labor unions by encouraging workers to either adhere to the existing ones, or to create new ways of expressing common views and to improve the social dialogue between labor unions and employer organizations, both on a national level and on a company level, which is too often flawed in France. A good working social dialogue is, however, an absolute prerequisite for a reliable and more flexible job contract, whose conditions could be adapted through company agreements as well as through social partner negotiations’ to the needs of the market. Employees and employers are often ideologically opposed against each other even though in reality 99% of the businesses operating in France are small and medium enterprises that are trying to make ends meet. To achieve goals that are in the interest of the employer and employee, company negotiations, dialogue and mutual trust are fundamental. Without this essential prerequisite, economic and social progress cannot be achieved. In that sense, there is still a lot of work to be done.

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