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France: A French quiet revolution: the development of collective bargaining

23/07/2015

Since Colbert, France is known as the country of all kinds of regulations: statutes, decrees, directives and norms which have to be respected by companies whatever their size.

Collective bargaining in France was generalised by law only in 1950, establishing the industry as the main level for bargaining. Because collective bargaining at the industry level is the only way for small companies to benefit from collective agreements, this level of negotiation has traditionally been the most important level for collective bargaining in terms of both, the number of employees covered and the number of agreements reached (about 1300 industry-level agreements are signed each year). Today, almost 98% of employees are covered by such collective bargaining agreements due to the extension of the applicability of collective bargaining agreements by the Ministry of Labor.

Since 1982 a quiet revolution has been taking place: regulations increasingly leave the floor to collective agreements. This is a 3-step revolution.

First, in 1982, the “Auroux laws” imposed an obligation on the employer to negotiate annually on pay and working time at the workplace or at company level where there is a trade union delegate – essentially companies with more than 50 employees – and this obligation is backed up by penalties in case of non-compliance. However, there is no obligation to actually reach an agreement.

In the past, company level agreements could not provide for terms and conditions less favorable than those set by the appropriate industry agreements. However, this has changed over time. Legislation introduced in 2004 now allows company level agreements to diverge from an industry agreement in areas where this is not specifically prohibited by the industry agreement. Furthermore, legislation introduced in 2008 gave primacy to company level agreements over industry level agreements in the area of working time.

As a result of all of these reforms there are about 40 000 company level agreements signed each year in France.

In 2007 the position of national level bargaining was strengthened by a law passed by the minister of labor Gérard Larcher, which gave Unions and employers a much greater role in the development of legislation in areas of industrial relations, employment and training. According to article L. 1 of the labor code, directly inspired by the European Social Protocol of 1991 which has been integrated into the Maastricht treaty, when the government wishes to introduce changes in these areas, it must first consult with employers and Unions on the basis of a document setting out its analysis of the situation, the purpose behind the changes and the potential options. The government has to allow them to agree to the suggested changes, if they wish to do so. Should Unions and employers decide to negotiate the suggested changes, the government has to leave them sufficient time for that purpose. If Unions and employers approve the changes, the government has a political, if not a legal, obligation to transpose the suggested changes into law in the existing form.

  • This new procedure led to major recent reforms in French labor law:
  • The National Inter-professional (i.e. cross-industry) Agreement of 11 January 2008 on the modernization of the labor market which provided for the termination of labor contracts by mutual agreement, taking labor conflicts out of courts;
  • The National Inter-professional Agreement of 9 April 2008 on social democracy which reformed the rules on Union representation.
  • The National Inter-professional Agreement of 11 January 2013, on employment security which fully reformed the rules and procedures governing collective dismissals.

As a result, several national inter-professional agreements are negotiated each year (5 in 2013).

Finally, the law adopted in 2008, based on the National Inter-professional Agreement of April 2008, introduced new criteria for determining whether a Union is representative or not and therefore allowed to participate in collective bargaining at national, industry and company level. The new law requires a Union to win at least 10 per cent of the votes at the workplace level, 8 per cent of the votes at industry level and 8 per cent of the votes at national inter-professional level to be considered as being representative. In order to be valid, collective bargaining agreements at national, industry and company level need to be signed by Unions having at least a 30 per cent support of works council and similar elections, and not be opposed by Unions with majority (more than 50 per cent) support.

As if all this was not enough, Prime Minister Manuel Valls has recently asked the former Director of Industrial Relations Jean-Denis Combrexelle to propose “new and bold prospects in order to deeply modernize our social relations”. He will be assisted in this task by a commission of 16 experts which includes two European experts, Mr. Andreas Botsch, special adviser of the president of the German DGB, and Mr. Tiziano Treu, a former Italian minister of labor.

Authors

Olivier Dutheillet de Lamothe
Olivier Dutheillet de Lamothe
Partner
Paris