Pressure mounts on 35-hour week

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During summer 2004, criticism of the statutory 35-hour working week has been mounting in France's governing coalition and in employers’ circles, raising fears among trade unions.

The 'Aubry laws' of 1998 (FR9806113F) and 2000 (FR0001137F) on the reduction of working time introduced a statutory 35-hour working week in France. A precise evaluation of the effects and consequences of these laws is particularly complex and difficult (FR0107170F and FR0210106F). However, employers’ associations and the parliamentary right have consistently fought this legislation, introduced under a Socialist-led government.

The conservative government that emerged from the 2002 general elections did not immediately mount a head-on attack on the legislation adopted by the previous administration. Instead it relaxed the law in certain respects. The 'Fillon law' (FR0209105F), passed on 17 January 2003, kept statutory working time at 35 hours a week, but raised the annual overtime quota from 130 to 180 hours and allowed companies to pay a 10% pay premium for overtime work, rather than the normal 25%, up to the end of 2005. This law also de facto suspended the application of the 35-hour week in firms with fewer than 20 employees. Lastly, it provided for the progressive unification of the various hourly rates of the SMIC national minimum wage - brought about by the staged move to a 35-hour week (FR0208102F) - by 2005, the increases involved being compensated for by a further cut in employers’ social security contributions, regardless of the length of working time.

However, in summer 2004 matters have apparently changed, and a more fundamental debate on the future of the 35-hour week is now under way within the governing coalition in parliament, the government and employers’ associations.

Calls for change

The Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) employers' confederation had originally expressed concerns that the new government elected in 2002 would turn out to be 'too hesitant to carry through the radical reforms that should be implemented'. Employers stressed the need to combat what they saw as a lack of motivation among workers, a devaluation of work and a loss of competitiveness. The governing coalition seemed unsure about which strategy to adopt. The employers on the other hand, were determined that there should be change, going beyond the issue of the 35-hour week. Guillaume Sarkozy, the deputy chair of MEDEF and chair of the Textile Industry Employers’ Association (Union des industries textiles, UIT), argued that the very concept of statutory working time was 'nonsensical'.

On 14 April 2004, Patrick Ollier and Hervé Novelli - parliamentary deputies on the free-market wing of the governing coalition - published a report on 'the assessment of the economic and social consequences of the legislation on working time'. Its principal conclusion is that 'the issue of working time should be dealt with by collective bargaining, not the law'. The authors of the report suggest that overtime quotas in companies be pooled, and that they be exempt from social security contributions for firms with fewer than 20 employees, instead of being subject to a premium pay rate. The report provoked an outcry, especially from the opposition Socialist Party (Parti socialiste), which immediately produced a counter-report.

Debate among employers and in government

In early July 2004, amendment of the legislation on working time emerged as one of MEDEF’s priority demands, together with a reform of the Labour Code (FR0404102N). In the interest of 'free social dialogue', the chair of MEDEF suggested that the law state that the 35-hour week should apply only if a sector or company-level agreement does not organise work differently.

The debate shifted ground somewhat when several firms - including Bosch, Doux and SEB- used a new provision introduced by the law of 4 May 2004 on social dialogue, which allows company-level agreements to offer employees less than is guaranteed by existing sectoral or intersectoral agreements (FR0404105F). The threat of relocation has been used in some of these cases as an argument for negotiating an increase in working time (FR0408101N).

On 30 June 2004, the Minister for the Economy, Nicolas Sarkozy, called for 'a wide-ranging reform of the 35-hour week', recommending, among other changes, the abolition of all forms of taxation on overtime. In an interview published in the Le Monde newspaper on 11 July 2004, Mr Sarkozy stated that: 'for two weeks at the beginning of every year, each employee should be able to either volunteer for overtime or opt to stay on the 35-hour week'.

During a speech on 14 July 2004, President Jacques Chirac also touched on the issue. After reiterating that he did 'not support the 35-hour week law', he nevertheless spoke of it as 'an established right'. Therefore, rather than favour the radical reform advocated by Mr Sarkozy, the President stated that he backed the idea of 'further flexible arrangements negotiated at company level within the parameters of the law and sectoral agreements'.

This debate reflects the divisions on this subject within the governing coalition and its parliamentary representatives, as well as on the issue of fiscal priorities. Prime Minister Jean-Pierre Raffarin recently decided to introduce in stages over two years a planned 8% rise in the SMIC to bring into line the various minimum wage rates resulting from the introduction of the 35-hour week, while the government had previously committed itself to implementing the increase in 2005 (FR0408102N). This decision by the Prime Minister appears illustrative of a conflict between two government policy objectives: on one hand, containing the rise in public spending; and on the other, lowering companies’ social security contributions.

Union responses

The delay in raising the SMIC provoked heated reactions from the trade unions, which have accused the Prime Minister of back-pedalling. According to the General Confederation of Labour (Confédération générale du travail, CGT), Mr Raffarin 'is attacking the group of people in the worst social predicament', while the general secretary of the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC), Jacky Dintinger, said that he was 'very concerned to see the Prime Minister promise a reduction in employers' social security contributions with no trade-off from businesses required'.

Behind the issue of the reduction of working time, several unions perceive the threat of company relocations. 'The 35-hour week is just a pretext', according to the CGT national secretary, Maryse Dumas, and a 'smokescreen' in the words of 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). Jean-Claude Mailly, general secretary of the General Confederation of Labour-Force Ouvrière (Confédération générale du travail-Force Ouvrière, CGT-FO), rejects what he calls the logic of 'dumping', and has criticised the government’s willingness 'to reduce overtime pay'.

In response to what he termed the 'ideological strategy' of the government, Michel Jalmain, the national secretary of the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), stressed that 'the law and sector-level agreements allow for negotiating the necessary adjustments to certain economic realities'. This viewpoint is shared by CFE-CGC, CFTC and CGT-FO, which have expressed profound misgivings about the opening of general negotiations on the 35-hour week. This is also, for the same type of reason, albeit from the opposite point of view, the stance of the MEDEF, which is awaiting government initiatives.

Commentary

One would now be justified in referring to the debate on the future of the 35-hour week as a 'cacophony', as did an editorialist in Le Monde, who wrote in the 23 July 2004 issue, that 'this debate, begun at the initiative of Nicolas Sarkozy and Jacques Chirac, is currently taking place in the midst of the shambles that … too often characterises action taken by the current governing majority.' This position echoes that of the National Federation of Independent Unions (Union nationale des syndicats autonomes, UNSA), which is urging the government to organise a real debate, considering that 'the utter disorder beginning to hold sway on the question of the 35-hour week is intolerable and harmful for both workers and companies'. (Michel Husson, IRES)