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The Evolution of IR/HRM 
in France

Yonatan Reshef
School of Business
University of Alberta
Edmonton, Alberta

Before reading the following overview, take a look at:

  1. Table 1 - Labor Federations and Employer Organizations
  2. Table 2 - CB Developments
  3. Table 3 - Worker Representation Bodies


The Early Years

The Auroux Laws

Labor Relations

Recent Developments



The Early Years

France has been a country of revolution, involved in a fight to produce a nation open to all who define themselves as free men. This revolutionary spirit against the discretionary power of the monarchy, was epitomized by the words equality, from the French motto, "Liberty, Equality and Fraternity." The French citizenry had an earnest concern for both civic and social justice since the mid1700's. Despite the prevalence of family and small businesses, unionism in France was legalized as early as 1884 in the Waldeck-Rousseau Law. This took place as an attempt to improve the wretched and precarious existence of working class where a paternal attitude permeated the work place. The working class lost confidence in the Utopian hopes presented by socialism, and embraced some traits of the anarchist and Marxist models. In 1895, the Confederation Generale du Travail (CGT) was established to represent and bring cohesion to the industrial working class, those in the metalworking, printing, mining and shipping industries. This was a federation born of communist ideals, intent on defending the workers from capitalism.

World War I found the workers united in the single cause of defending a nation at war. After World War I, the Law of March 1919 provided a statutory framework for collective bargaining. The Confederation Francaise des Travailleurs Chretiens (CFTC) was founded in 1919, with a close philosophical connection to the Catholic Church. The employers federation, the Confederation Generale de la Production Francaise (CGPF) was also founded in 1919. In 1921, a split occurred within the CGT, with the CGTU breaking away and carrying with it a stronger communist tie.

The Socialists were elected in 1936 (the Popular Front; 1936-38; first socialist government in history; the Prime Minister is Léon Blum) and major reforms were soon underway. In the wake of organized labour demonstrations and strikes, the Matignon Agreement of 1936 established a human resource framework including the 40-hour work week, a social safety system (i.e. paid holidays and pensions), and an industrial relations framework granting the rights to organize and bargain collectively and enjoy internal and local employee representation. The agreement, that became a law later that year, also established the extension procedure under which the Minister of Labor may make a collective agreement binding on all employers in a given industry, regardless of their membership of employers' associations.

During World War II. France split into two states. Vichy became the provisional capital and the Petain government worked with the Nazis after the invasion of May 1940. The new Nazi state was authoritarian, corporatist and discriminatory; the CGT and the CFTC were both prohibited while the CCPF was dissolved. General Charles de Gaulle continued to lead a fight with the allied forces, in resistance to the Nazis. Paris was freed in 1944 and the Vichy government members were either imprisoned or fled France. The Confederation Generale des Cadres (CGC) was formed in 1944, representing the elite class of white-collared workers. This was a moderate union, one which avoided mixing politics with the function of the union. The central employers association, the Conseil National du Patronat Francais (CNPF) was formed in 1945.

The situation left after the war required radical change to France's political, economic and social structures. The 1946 Constitution recognized the right of all individuals to protect their rights and interests by engaging in trade union activity and by joining the union of their choice. In 1948, the Confederation Generale du Travail-Force Ouvriere (CGT-FO) officially broke away from the CGT with a strong socialist philosophy, and the Federation d'Education Nationale (FEN) was formed, representing teachers. In the same year, two of the federations, the CGT-FO and the CFTC collaborate in order to obtain a better wage-price relationship for French workers.

The Basic Law of 1950 established industry level negotiations, signed by the most representative union, as the framework for collective bargaining. In 1964, the CFTC ended its ties with the Catholic Church and formed the Confederation Francaise Democratique du Travail (CFDT). 1968 saw a surge of demonstrations and strikes which began with student protests against admission policies. Labour joined in and, in fact, took over the protests, which caught the trade unions by surprise. The government was asked to assist in restoring order which brought about the Grenelle Agreement. The essence of this agreement was multi-industry bargaining, requiring endorsement by the individual plant.

The Auroux Laws

In May 1981, the first Socialist president in the post-1945 era, Frnacois Mitterrand, was elected for a period of seven years. One immediate consequence was the 1982 Auroux (the Minister of Labor at the time) Laws. The aim of these laws was primarily industrial relations reformation to enhance the power of the trade union at the company level, through the collective bargaining mechanism. Employee representation, through the restoration of works committees, was also a key element of the laws. The CFDT was a major proponent of the workers right of expression.

The Auroux laws embodied the new government's efforts to reform workplace industrial relations and to provide employees with real "citizenship rights within the firm." One of the key provisions was the imposition on employers of the obligation to bargain annually with company-level unions on pay and working time.

The French collective bargaining system is now structured around the three levels of multi-industry, industry, and company bargaining. At multi-industry level, agreements are concluded between central employer and trade union organizations. The agreements are not directly binding but set the framework within which industry and company bargaining can take place. At industry level, there is a statutory obligation (under the Auroux laws) to negotiate annually on minimum rates of pay, although no obligation to reach an agreement. The parties at industry level are also obliged by statute to review job classification systems every five years. At company level, employers are required to negotiate (although not to conclude agreements) annually with union representatives on pay and working time issues.

Labor Relations

French management has until now been able to enforce its philosophy that the factory is an extension of the family, and thus must remain non-egalitarian. The revolutionary history of France is central to any attempt to identify the relationship between management and labour. The paternal nature of the French patronat, or manager, coupled with an underlying sense of continuous class warfare sets the stage for a dichotomous existence between the two parties. French employers have traditionally been hostile towards unions and union activities within organizations, and an egalitarian spirit has fueled the labour movement. This results in a struggle to keep labour out of management and any consequential decision-making. This prevailing attitude has gradually changed in a small number of organizations since the mid-1980's, as those employers have come to realize the weakening of union power.

It is estimated that there are presently 2.2 million union members in France, representing about 10.0 percent of the workforce. Due to the pluralistic and voluntary nature of unions, this estimate is difficult to make. Collective bargaining is the main task of labour unions and this negotiation is typically done, as a result of the Auroux Laws in 1982, at a local level, by the most representative union (since more than one union can be represented in the same workplace). The actual representative function of the unions is quite low today due to French legislation which effectively address conditions of employment and grievance processes. This works to weaken potential loyalty which an individual worker may have towards a particular union organization.

Unions also have a voice by way of the legislated workers right of expression (also as a result of the Auroux Laws) through a mixed system of representation. Union members are considered first for elected roles on various works committees. While the responsibilities of these committees revolves around specifics such as health and safety issues, voicing grievances, management of a social/cultural activities fund and collective bargaining, two of the committees are chaired by the head of the firm and none of them are involved in the organization's strategic or economic decision-making process.

Despite efforts to move towards a more quality-oriented relationship, the French managers continue to have a distinct supervisory role over the workers, based on a hierarchical organizational structure. Workers continue to operate with very little input into change. Scientific management techniques seem to be predominant, with a strong management class who "knows best". This continues to be reinforced even in the French educational process.

Recent Developments
End of 1990s - Early 2000s

  1. An intersectoral collective agreement on collective bargaining of 31 October 1995, given legal status by the law of 12 November 1996, introduced the procedure of "mandating" (mandatement). This means that in companies with no trade union delegate or workforce delegate fulfilling the duties of a union delegate, an employee can be mandated by a nationally representative trade union to sign collective agreements. Normally, bargaining rights are essentially restricted to union representatives. This procedure came into effect in the fourth quarter of 1996, but statistics on its use have been recorded only since January 1997. The Ministry's report highlights the difficulty in recording the exact scale of this phenomenon: "The wording of the texts registered with departmental labour directorates has not always allowed new bargaining procedures to be positively identified and therefore the actual extent of the procedure could have been slightly underestimated."

    The Ministry puts the number of agreements signed by mandated employees in 1997 at 620 (40 other agreements were signed by elected staff representatives - another mandating option). (Original article.)

  2. The Robien law.  For almost 20 years, various legislative modifications and collective agreements have sought to make the regulation of working time in France more flexible. More flexibility in working time could have a positive effect both on productivity and competitiveness. Combined with a reduction in the length of working time, it could also have a positive effect on job creation. The five-year law on employment, passed in December 1993, has made it much easier to introduce an "annualised hours" mechanism by which hours worked can be calculated over a 12-month period, by agreement at industry or company level, in exchange for a gradual reduction in total working time. The law also extended this system to part-time work.

    In this context, employers and trade unions (with the exception of the CGT) signed a national agreement in October 1995, which covers all sectors of industry. It encouraged: the establishment of the system of calculating hours worked on an annual basis (instead of a weekly one); part-time work; and the use of time off in lieu if overtime is worked. The application of these measures was referred to negotiations at industry level, of which the first appraisal was to be carried out at the end of the second quarter of 1996. However, the results have been disappointing. Agreements were only reached in some sectors of industry, and their content has been generally judged as far from innovative.

    Meanwhile, since November, 1995, at the initiative of some of its members, the National Assembly had been examining a bill to which the Government, after much hesitation, finally gave its approval. The law, called the Robien law (loi Robien) after its sponsor, the President of the National Assembly's Social Affairs Commission, came into effect on 11 June 1996.

    The principle behind the Robien law is simple: the state gives financial concessions, in the shape of partial exemption from employers' social security contributions, if a large reduction in hours worked (combined with a reorganization of the working week), enables the same proportion of jobs to be created, or redundancies avoided. The law's application necessitates a dual form of negotiation: a collective agreement must be signed within the company, which then negotiates a convention with the State on this basis. The same option is available at sector level, but as yet, has seldom been put into practice.

    In the case of a "hiring" agreement (under which jobs are created), a 10% reduction in the working week, combined with 10% more workers being recruited, gives the company the right to a 40% exemption from social security contributions in the first year, then a 30 % exemption for the next six years (or 50% and 40% respectively, if the reduction is 15%). The new levels of staffing must be maintained for at least two years. In the case of a "defensive" agreement (redundancies avoided) the exemptions are the same but are granted for only three years. They can be extended for up to seven years by a rider to the contract. (The original article)

  3. The French prime minister, Lionel Jospin, announced on Friday October 10, 1997, a new bill for the legal reduction of the working week without loss of salary. French employers swiftly made their opposition to the new measures known. The president of the French employers' confederation, (Confédération Nationale du Patronat Français, CNPF) resigned, reckoning that his post should be taken over by a combative president.

    The legislative timetable given for negotiations (2 years for business employing more than 20 people, 4 years for the rest) risks being used by employers to apply job flexibility and intensify the work routine, cutting out any positive effects of a reduction in the working week.

  4. The Aubry law.  France's new working time law was passed by Parliament in May 1998, and validated by the Constitutional Council in June of that year. It sets the length of the statutory working week at 35 hours as of 1 January 2000 in companies employing more than 20 people, and from 1 January 2002 for smaller firms. Some provisions come into effect immediately after the law's promulgation. This new legislation has brought in radical modifications to French employment law, and both employers and trade unions are already engaged in its implementation. (Original article.)

    The legislation, popularly known as the first "Aubry law" (after the Minister of Labor Martine Aubry), has given a new emphasis to the "mandating" procedure in collective bargaining. This mechanism, which allows a trade union to appoint an employee to negotiate and sign agreements in companies with no union delegates, aims to meet the concerns of both unions and employers, by compensating for the weak and dispersed union representation within companies. While the extent of company bargaining with these mandated employees is still limited, the new working time law may well provide a boost, all the more so as most unions have made mandating part of their campaign to cut working hours. (Original article.)

  5. In July 1999, the French government published its proposals for a second law on the 35-hour working week. The first "Aubry law", adopted in June 1998, provides for the introduction of a statutory 35-hour week from January 2000 (2002 for smaller companies) and encourages the social partners to negotiate on this issue at company and sector level before late 1999. The second law lays down more detailed legal provisions on the new working time regime. The second law provides for a reduction in employers' social security contributions to accompany that switch to the 35-hour week, which is conditional on the reduction in working time having been negotiated at company level, and on it being subject to a at least a minimum degree of consensus among trade unions. (Original article.)

  6. In 1999, France's second law on the 35-hour working week was passed on its first reading by the National Assembly. This legislation, which became law on 19 January of 2000, lays down new statutory norms for the duration of working time and continues a policy of reducing social security contributions on low-waged jobs. (Original article.)

  7.  On June 13, 2001, France's national assembly gave a second reading to the government's "social modernization" bill, whose wide-ranging provisions include measures on redundancies. In a context of increasing disquiet about a wave of large-scale job losses, the latest version of the bill contains much more restrictive measures on redundancies than the original proposals. Employers' organizations have rejected the proposals out of hand, while trade unions want the law to go further.

    The social modernization bill now introduces a series of more restrictive measures for companies planning redundancies, as follows.

    • A more restrictive definition of redundancy. The only acceptable grounds for redundancy (licenciement économique) will now be: "serious economic difficulties which the company has been unable to resolve by any other means"; technological advances "threatening the company's survival"; or "reorganization requirements which are vital to keep the company in business." Redundancy on any other grounds will be deemed as having no genuine and warranted basis. The Labour Code currently states that acceptable grounds for redundancy "include" these reasons, allowing other grounds, and this will now be deleted.


    • Works council right to oppose redundancies. When a company announces redundancies, works councils will be able to present "alternative proposals". They will also have the "right to oppose" restructuring and staff-reduction plans as well as the terms and conditions for their implementation. However, the right to oppose will apply only to management proposals and not to the redundancies themselves. The latter may be dealt with by a mediator (see next point). Lastly, works councils may ask a judge in chambers (juge des référés) to rule on whether appropriate procedures have been followed for the tabling of counter-proposals.


    • The intervention of a mediator. The law will create the position of mediator. Mediators may be brought in by either party where a company or autonomous economic unit (workshop, shop, etc.) plans to make redundant at least 100 workers as part of a partial or total closure program. Appointed by district courts, mediators will have a maximum of one month - during which time the redundancy process is put on hold - to bridge the gap between the two parties and table a "recommendation". If this recommendation is rejected, it is up to the judge in chambers to make a final ruling. As a result of this and their new role in deciding on works council procedures (see previous point), judges in chambers will play a more important role in the process. They will be responsible for deciding whether a genuine debate on works council and mediator proposals has taken place.


    • Plan to safeguard employment. Companies with more than 100 employees planning redundancies will be required to present a new "plan to safeguard employment" (plan de sauvegarde d'emploi), which must provide for redeployment and assess the social and local impact of redundancies, though no figures have yet been specified. Companies with a workforce of over 50 will be required to make either a financial or in-kind contribution in proportion to the number of workers made redundant and their financial situation.  (Original article 1 | Original article 2)

    In summary, in its bill, the government sought to make redundancy an employer's last resort. It thus proposed that, before being able to table a redundancy plan, employers must have convened negotiations or reached an agreement on introducing the 35-hour working week. In addition, employers contemplating redundancies would have to have reduced 'structural overtime'. If the company failed to meet these requirements, the courts could be called upon provisionally to block the redundancy plan. The employer would also be required to propose redeployment to alternative jobs requiring equivalent skills within the company or group. The works council should be informed prior to any public announcement of redundancies. 

    • Amendment.  In December 2001, France's National Assembly passed the controversial 'social modernization' law, which includes measures making redundancies more onerous for employers. In January 2002, the Constitutional Council approved most of the new law, opening the way for its implementation soon. However, it rejected one key point: the proposed restrictive definition of the permissible grounds for redundancy. The Council contended that the wording used in the legislation was overly restrictive, given that it provided only for three possible grounds for economic redundancy: 'major economic difficulties where all possible solutions have been exhausted'; 'technological changes endangering the very survival of the company'; and 'reorganization required to ensure the survival of the company' . This definition, which precludes any other grounds for redundancy, such as cessation of business, was deemed to contravene two principles: first, the freedom to do business; and second, the safeguarding of employment. The Council maintained that these provisions would have prevented companies from pre-empting future difficulties by taking action designed to avoid larger-scale redundancies at a later date. Moreover the courts would not only have controlled the grounds for redundancies but also the choice of solution. As a result of the Constitutional Council ruling, the Labour Code's provisions on this issue - in their unamended form - supplemented by case law, continues to apply.  (Original Article 3)

  8. In July 2001, four French trade union confederations and three employers' organizations agreed on a 'Common Position' setting out their wishes for a reform of the rules governing collective bargaining. In order to make company-level collective bargaining more widespread, two methods are put forward. First, employee representation in small and medium-sized enterprises should be strengthened. This passage in the document reflects a favorable response to a trade union demand, but its implementation is to be left to sectoral negotiations. As a trade-off, the document satisfies an employers' demand, by offering the opportunity for firms with no trade union delegates to negotiate, either with elected employee representatives (works councils or workforce delegates) or with an employee "mandated" by one or more unions for a five-year trial period. It would be incumbent upon sector-level negotiations to choose the method for such bargaining in the absence of union delegates, and establish which themes may be negotiated in this way (currently, labour law allows agreements signed by mandated employees only in relation to the reduction of working time). Lastly, the Common Position grants unions the right to refer matters arising from sector and company-level collective bargaining to the courts, a right whose operational forms will be set by sectoral agreements.

    Yet, the major innovation contained in the document is the introduction of a "majority principle" for the validation of collective agreements. The introduction of this concept has been motivated by the concern "to bolster the legitimacy of agreements," and "ensure that negotiations are balanced." In the present system, an agreement's validity is conditional only on being signed by at least one of the five trade union organizations guaranteed an "indisputable presumption" of their representative character by a 1966 decree (CFDT, CFE-CGC, CFTC, CGT and CGT-FO). 

    Henceforth, the Common Position's signatories want extra conditions to be met so that a collective agreement may come into force. At sector level, the agreement, regardless of the number of signatories, should only take effect 'to the extent that the majority of unions with representative status have not availed of their right of opposition.' In relation to company-level agreements, the document proposes that sector-level agreements lay down one or other of the following two sets of rules on the validity of company agreements:

    1. one or more trade unions with representative status, which together won at least 50% of the votes in the most recent workplace election of employee representatives on works councils or of workforce delegates, must sign the agreement. Failing that, the agreement must win the approval of the majority of the staff in a referendum; or
    2. the agreement is valid in the absence of opposition by non-signatory unions with a combined vote of at least 50% at the most recent workplace elections. (Original article)

    Reform of the 35-hour Week Law.  For some months, criticisms of the legislation establishing the 35-hour working week (FR9806113F and FR0001137F), not only from the governing coalition in parliament but also from employers’ associations, have become increasingly strident (FR0408108F). In late 2004, deputies tabled a bill in parliament amending the basic law on the issue. This bill, seen as a challenge to the 35-hour week, was initiated in response to pressures from pro-free market actors, but does not alter statutory working time. It addresses, among other points, a reform of working time savings accounts, and creates a new form of 'optional working time, accessible above and beyond the overtime quota' .

    The Bill includes measures announced by Prime Minister Jean-Pierre Raffarin in December 2004 (FR0501101N). It provides for new options for using working time savings accounts (comptes épargne temps, CETs) for employees, the establishment of agreements on 'optional hours' that would allow an increase in overtime, and the application of an exemption scheme for small businesses. The annual overtime quota had already been raised by decree from 180 to 220 hours a year in late December 2004.

    The bill provides that:

    • the number of days of time off that can be accumulated in a CET is no longer restricted to 22. Moreover, the obligation to liquidate the days outstanding in a CET every five years will be withdrawn. Days outstanding in a CET can be cashed in;
    • it will now be possible to deposit overtime, benefits from profit-sharing schemes, and pay rises into CETs;
    • extra days off resulting from the reduction of working time (RTT) scheme for managerial staff can be 'bought out' (i.e. paid rather than taken off), even if they have not been deposited into a CET. This scheme will only be available to managerial staff, and on a voluntary basis;
    • firms employing fewer than 20 employees will be able to pay extra RTT days instead of giving them as days off; and
    • employees will be able to work past the statutory overtime quota, set at 220 hours a year.

    Full story

    Solidarity Working Day.  Through a law adopted on 30 June 2004, the government abolished one public holiday per year, replacing it with an extra working day called a 'national solidarity day' . The aim is to fund policies to assist the elderly and people with disabilities to attain independence (FR0412104F), and the move came in the wake of the shocked response to the 15,000 premature deaths caused by the summer 2003 heatwave, including many elderly people.

    Officially established in May 2005 by the Prime Minister, the National Independent-Living Support Fund (Caisse nationale de solidarité pour l’autonomie, CNSA) will distribute extra funds, broken down as follows:

    • 40% (estimated at EUR 0.8 billion in 2005) will fund policies to assist people with disabilities;
    • 40% (EUR 0.8 billion) will fund policies to assist elderly people, eg the renovation of sheltered housing (EUR 50 million) and the on-site provision of medical and nursing care, or the extension of domestic services (EUR 365 million) (FR0505107F); and
    • 20% (EUR 0.4 billion) will fund the 'personalised independence allowance' (Allocation personnalisée d’autonomie, APA) (FR0412105F).

    Apart from the fact that the establishment of the solidarity day has again extended working time just after the law overhauling the 35-hour week legislation was passed (FR0502109F), it has also raised the issue of the justice of this policy. Only employees are actually affected by this effort made in the name of national solidarity. Moreover, the issue of the necessary resources for the funding people’s independence is still a live one.

    Full Story.

    May 6 - Nicola Sarkozy is elected president of France replacing President Jacques Chirac.  Both belong to the Union for a Popular Movement.  Sarkozy has said he is determined to force through a wave of sweeping free-market reforms he believes are vital to boost growth, increase wealth and cut unemployment.

    His first moves are expected to be scrapping the 35-hour working week, cutting taxes and social charges on businesses, and axing large numbers of France's bloated civil service.

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