Between September 2004 and May 2005, the largest retail group, Carrefour experienced various industrial disputes, mainly over pay. One of them was motivated by the highly lucrative golden handshake afforded to the outgoing CEO.
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Between September 2004 and May 2005, the largest retail group, Carrefour experienced various industrial disputes, mainly over pay. One of them was motivated by the highly lucrative golden handshake afforded to the outgoing CEO.
It is an unusual state of affairs for the high-volume retailing sector dominated by grocery sales (hypermarkets and supermarkets) to have experienced various sporadic strikes, as occurred at the industry’s leader in France, the Carrefour group.
The first strike, which passed off unnoticed in September 2004, involved IT department staff protesting against the planned outsourcing of their work. Next it was pay that spurred the group’s employees to take action:
In March 2005, a fresh and frozen food warehouse in the South of France had its entrances and exits blockaded in a protest against the fall in the profit-sharing scheme payout.
At the end of March, the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC) and the General Confederation of Labour (Confédération générale du travail, CGT) called for a nationwide strike to be held on 25 March to defend purchasing power. The unions estimate that 100-120 stores were hit (FR0505101N). According to the management, the dispute affected less than 2% of the hypermarket staff in 49 of the group’s 179 stores, and only two sites were genuinely prevented from operating. It felt the unions’ demands were baseless since the pay agreement signed in 2004 by the majority unions, the General Confederation of Labour - Force ouvrière (Confédération générale du travail - Force ouvrière, CGT-FO) and the Independent Labour Confederation (Confédération autonome du travail, CAT), provides for a 2% pay rise in 2005, plus an increase in staff discount on purchases and progression through the job classification scales. The CGT counters that the pay rise was worth only 1.79%.
The action could have stopped there and then. Only one store on the outskirts of Marseille had decided to extend the dispute to get pay rises and more recruitment (a dispute backed by the CFDT and the CGT, but criticised by the CGT-FO, which saw it as doomed to failure). The strike ended there on 15 April after part-time contracts had been extended to full-time ones.
Yet a further strike began at the end of April when details of the golden handshake afforded to the outgoing CEO, Daniel Bernard, became public. It consisted of EUR 38.5 million, including severance pay, the non-competition clause and pension payment. This departure was the consequence of the group’s problems and the inability of the outgoing CEO, who had formerly been successful in internationalising the group, to transcend them. Carrefour’s hypermarkets have for some years been losing market share to hard discount stores and even supermarkets. In February 2005, Daniel Bernard was replaced by the former Marks and Spencer boss, Luc Vandevelde, well-known for carrying out painful cost-cutting exercises.
The golden handshake given to the former CEO caused a national outcry and raised questions about a sector known for imposing difficult employment and labour conditions and among the lowest wage levels on its employees, even though the Carrefour group flaunts a rather more advantageous pay policy than its competitors’. In respect of this news, the bitter climate surrounding recent pay bargaining appears untimely and inappropriate from an economic perspective. The unions then urged employees to take the offensive again, calling for a strike aimed at getting a general EUR 150 pay rise, and a minimum monthly wage of EUR 1,400. However, they have only managed to involve the warehouses of a Carrefour subsidiary in charge of purchases in the strike. Although encouraged to take action on Saturdays, the peak shopping day of the week, store staff did not take up the invitation. The dispute was quickly brought to an end by the granting of some extra pay concessions, with an agreement signed on 2 May by the CFDT, but not the majority union, the CGT-FO.
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Eurofound recommends citing this publication in the following way.
Eurofound (2005), Strikes in Retail Sector, article.
