New back-to-work scheme agreed for redundant employees

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In April 2005, French employers' organisations and four out of five trade union confederations concluded an intersectoral agreement on the introduction of a new 'personalised back-to-work assistance agreement' (CRP) scheme to retrain and find new jobs for employees who are made redundant. The scheme is based on the provisions of a new law on social cohesion, adopted in January.

A new law of 18 January 2005 on 'social cohesion' (FR0409104F) aims to combine a relaxation of the conditions for redundancy with an entitlement to a 'personalised back-to-work assistance agreement' (Convention de reclassement personnalisé, CRP) for employees who are made redundant. This objective is in line with the government’s policy in favour of collective bargaining, which it is stressing at present. It is thus expected that intersectoral negotiations on the employment of older workers, teleworking and 'work hardship' will lead to agreements by the end of 2005. As far as the new CRP scheme is concerned, the social partners reached a deal on 5 April 2005, after only three meetings. Henceforth, all those employees made redundant in companies with workforces under 1,000, including those with only one employee, will be able to benefit from a CRP. Prior to this change, only large companies with redundancy plans offered their employees this type of protection (FR0311110T).

Combining active and passive measures.

From the moment an employee is served notice of redundancy, he or she has 14 days within which to either accept of reject assistance under the CRP scheme. Where an employee signs on to the scheme, his or her employment contract comes to an end and he or she becomes a vocational trainee. The retraining scheme lasts eight months. The main features are as follows.

• The CRP improves upon the ordinary unemployment compensation scheme. For the first three months, employees receive specific compensation equivalent to 80% of their former gross wage (or 95% of their net wage). For the next five months, this benefit is reduced to 70% of their previous gross wage (or 85% of their net wage). Employees with under two years of service in a particular company, who have earned entitlement to unemployment insurance, benefit from various forms of assistance for the entire eight-month scheme. However, their compensation is less generous since it falls under the ordinary National Union for Employment in Industry and Commerce (Union nationale interprofessionnelle pour l’emploi dans l’industrie et le commerce, UNEDIC) unemployment benefit scheme.
• The assistance begins within a week of the employee signing on to the scheme. An individual case worker follows each employee until a new job is found and for a further six months thereafter. Redundant employees each receive a pre-scheme vocational ability assessment, leading to either skills assessment, training or certification of work-derived experience (validation des acquis de l’expérience, VAE). However, training is designed to enable redundant workers to find new employment as quickly as possible and as such, must be in occupations experiencing a shortage of labour.
• A cross-disciplinary team made up of staff from the National Association for Adult Training (Association nationale pour la formation professionnelle des adultes, AFPA), National Employment Agency (Agence nationale pour l’emploi, ANPE), and the Association for Employment in Industry and Commerce (Association pour l’emploi dans l’industrie et le commerce, ASSEDIC), is responsible for developing a return-to-employment plan for each participant. Each geographical zone will have its own team, thus ensuring that the scheme puts down local roots.

At the end of the eight-month scheme:

• those employees whose retraining for an entirely new field is too long to be completed under the CRP may continue with it beyond the statutory eight-month period, but they will come under the general unemployment insurance scheme; and
• where employees fail to find new jobs, they receive unemployment benefit for the normal statutory period minus the eight months they spent on the CRP scheme. For example, an entitlement of 23 months minus the eight-month back-to-work scheme period would mean 15 months.

Funding arrangements remain uncertain

The most sensitive issue during the negotiation process was funding arrangements for the CRP. Until the state makes a firm commitment, as provided for in the new social cohesion law, companies and the UNEDIC unemployment insurance fund will provide part of the funding for this new scheme:

• companies pay to the ASSEDICs the two months’ pay equivalent to the redundancy notice compensation normally paid to employees. They are also required to make a cash payment for any statutory training hours (20 hours per year) unused by the employee concerned; and
• UNEDIC is required to channel the funds normally set aside for the ANPE 'return-to-employment assistance plan' (Plan d’aide au retour à l’emploi, PARE) (FR0101114F) into the new scheme. Therefore, UNEDIC does not intend to inject any additional money.

All the social partners are now calling on the government to specify the money that it intends to earmark for this new scheme.

Reactions

The head of the negotiating team for the Movement of French Enterprises (Mouvement des enterprises de France, MEDEF) employers' confederation, Denis Gautier-Sauvagnac, was very pleased with the deal struck on 5 April at the end of the negotiation process, which in his opinion had provided a forum for 'constructive discussion' and enabled the 'social partners to fulfil their mandate'.

Four of the five representative trade union confederations signed the agreement. The French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), considers that under the new CRP scheme 'the immediate (personalised) assistance will limit, as far as possible, the length of unemployment among redundant employees'. However, it criticises the fact that 'employees in the most insecure positions, ie those who have worked less than six months in the previous 23-month period, will not benefit from the new back-to-work scheme'. In the opinion of the General Confederation of Labour-Force Ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO), the new initiative 'improves on the length and level of compensation of previous schemes. In addition, it provides new entitlements, particularly for employees of small and medium-sized companies.' The French Confederation of Professional and Managerial Staff-General Confederation of Professional and Managerial Staff (Confédération française de l'encadrement-Confédération générale des cadres, CFE-CGC), which had for a long time remained undecided as to whether to sign the agreement, finally came on board after the government guaranteed that it would not set up another similar parallel scheme. The French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC) also endorsed the deal.

However, for the General Confederation of Labour (Confédération générale du travail, CGT), which opposed the new scheme, the agreement is 'a bare minimum'. It would have liked to see the employment contract between the company and the employee maintained until the redundant worker succeeded in finding alternative employment. Furthermore, CGT is very critical of the so-called active measures, claiming that 'the new training and support provisions are far from innovative' and that the CRP 'falls well short of providing life-long vocational assistance to employees in their career changes'.

Commentary

The creation of the 'personalised back-to-work assistance' agreement scheme has filled a vacuum left by the scrapping of retraining agreements (conventions de conversion). This was a state-run initiative, which until 2001 had provided support for many redundant workers attempting to find new jobs. Ever since it was dismantled to make way for the PARE scheme, approximately 80% of redundant employees have had no specific support. Companies have baulked at setting up their own schemes to help redundant employees obliged, usually not by choice, to find new jobs. They have acted as if these workers were quite naturally the government’s responsibility. Consequently, the return of a scheme that looks strangely like the retraining agreements of nearly 20 years ago is to be applauded. Nevertheless, the effectiveness of the personalised back-to-work initiative relies on the commitment of each individual company. Without hands-on involvement at this level, the new entitlement will remain largely theoretical. This new scheme raises the issue of the social responsibility of companies once again. (Carole Tuchszirer, IRES)