Following an agreement between social partners at the national level, reached on 19 July 2011, the French government brought in a new law on 29 July introducing a new contract for employees who are made redundant. By signing this contract, they are agreeing to actively seek work while taking part in retraining and redeployment programmes. The new system replaces two previous contracts, which the government felt had not done enough to rehabilitate unemployed workers.
Background
The French government brought in a law on 29 July 2011 to establish a new system to help reintegrate employees into work, who had previously been subject to collective redundancy procedures. It followed an agreement (in French, 743Kb PDF) that was signed by social partners at national level.
The new employment contract, called an occupational security contract (CSP) has been available to French employees since 1 September 2011. It is used in companies with fewer than 1,000 employees, and for workers who have been receiving unemployment benefits for at least four months out of the last 28 months or, if they are older than 50, in the last 36 months.
It replaces the previous Occupational Transition Contract (CTP) and the experimental 'personalised back-to-work assistance agreement' (CRP) for employees who are made redundant.
Nature and aim of CSP
The introduction of the CTP transition contract in April 2006 was an experiment in some French regions aimed at improving the CRP assistance programme, which had been introduced a year earlier. However the government found that neither the CRP nor the CTP had done enough to retrain and rehabilitate unemployed workers, despite the huge amount of public money invested.
Due to monitoring and classification problems there are very few statistics available on CRP/CTP, but those that are available demonstrate that somewhere between 40–60% of the people on a CRP/CTP were employed after the end of the contract. A parliamentary report on the draft law finds that the stability or sustainability of the employment found by workers previously on a CRP/CTP does not lend itself to statistical evaluation and the range of potential beneficiaries of the scheme was also too narrow to evaluate.
It is therefore hoped that the CSP, which can last for up to 12 months, will more efficient than former rehabilitation contracts, even if the intent remains the same.
The main purpose of the CSP is to facilitate a return to permanent employment through a process that may include, for instance, redeployment, retraining or help with starting up a business. Retraining and integration will be more closely connected to local job markets, and it is hoped this will contribute to the efficiency of the CSP.
The CSP is a contract between a job seeker and Pôle emploi – the French public job centre (or an affiliated body), or the French National Association for Adult Vocational Training (AFPA).
Financial package
An employer must offer a CSP to each employee being made redundant either during an interview preceding dismissal or during the final meeting with the employee’s representative. Each employee must decide within 21 days of receiving the offer whether they will agree to accept the CSP or choose the traditional path of receiving unemployment benefit
The financial advantage of the CSP is that, for 12 months, the employee will receive a payment equal to 80% of their former gross income as long as they had worked for at least one year in the company where they lost their job. It is also granted immediately, unlike unemployment benefit, which is usually paid after a delay. In practice, the amount paid under a CSP is almost the same as the net salary received before redundancy.
The employee’s agreement to such a contract implies the termination of their employment contract by mutual consent. However, for 12 months the employee retains the right to bring a claim to court for unfair economic dismissal. In any case, an employee who agrees to a CSP is entitled to financial compensation from their employer amounting to at least what they would have received if they had been dismissed on economic grounds.
As long as the CSP is in force, beneficiaries are covered by the public social security scheme and continue to contribute to basic and supplementary retirement schemes. The final package is more attractive than that of the former CTP, and is an incentive for employees to agree to a CSP.
Rehabilitating workers
When a CSP is agreed, the employee’s skills are evaluated. Then, taking into account the local jobs market and the types of work available, vocational guidance is offered and a professional plan drawn up. Throughout the process, various means of assistance are offered, including periods of training and work, counselling and job-seeking training modules. As long as the CSP is in force, the beneficiary is considered to be a ‘vocational training intern’ under French law. In return, the beneficiary undertakes to actively seek work, respect the measures provided by the contract and respond to job offers. Two unjustified refusals of job offers may lead to the termination of the CSP. If still unemployed at the end of the CSP, a beneficiary can register for the unemployment fund and will be eligible for unemployment benefits as long as they meet all the legal requirements.
Commentary
Redundant workers who were previously on a fixed-term contract or were temporary workers still do not fall within the scope of the CSP, and this is a weakness of the system. Many potential beneficiaries are also excluded by the requirement of having worked for at least a year for the company making them redundant. However, despite these flaws, this contract can be seen as an innovative step towards an occupational security system.
Jean-Philippe Lhernhould, Université de Poitiers, HERA