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Industrial Relation in

France

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Economic context:

• France is one of the biggest European countries and economies. Ithas a population of 64 million people and about 2.5 millioncompanies. France is known for its state-interventionist  type ofeconomy or state-managed capitalism. However, Europeanintegration, international liberalisation and economic globalisationhave also influenced the French socioeconomic system. Thecountry’s traditional governance model has been under attack and isharder to sustain. The French government has partially or fullyprivatised many large companies, banks and insurance companies;nonetheless, it still retains large stakes in several leading large

companies and remains dominant in some economic sectors,particularly in the energy, public transport and defence sectors.

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 Economic background 

• GDP per capita (in purchasing power standards, index: EU27=100)

107.3 (2008)

• Real GDP growth (% change on previous year) (annual average 2004 – 

(2007)2.23%

• Inflation rate (annual average 2004 – 2007)1 .93%

• Average monthly labour costs, in  € 

• €4,296 (2005)  €3,220 (2007)

• Gender pay gap (Difference between average earnings of male and femaleemployees as percentage of earnings of male employees, 2007)

16.9%

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 Employment rate (15 – 64 years) (2008) 

64.9%

Female employment rate (15 – 64 years) (2008) 

60.4%

Unemployment rate (15 – 64 years) (2008) 7.8%

Monthly Minimum wage 

 €1,254 (2007)  €1,321 (2009) 

Source: Eurostat and European Industrial Relations Observatory (EIRO), Pay developments  – 2007 (for minimum wage data) 

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Table 2: Industrial relations, pay andworking time 

• Trade union density (%) (Union members as a percentage of allemployees in dependent employment)

8%

• Employer organisation density (%) (Percentage of employees employedby companies that are members of an employer organisation)

75%

• Collective bargaining coverage (%) (Percentage of employees coveredby collective agreements)

90%

• Number of working days lost through industrial action per 1,000

employees (annual average 2004 –

2007)* 122.91 days (annual average estimate)

• Collectively agreed pay increase (%) (annual average 2004 –2007) 

3.2%

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• Actual pay increase (%) (annual average 2004 –2007) 

2.37%

• Collectively agreed weekly working hours (2007)

35 hours• Actual weekly working hours (2007) 

35.6 hours

Sources: Eurostat, Ministry of Labour, Solidarity and the Public Service (Ministère du Travail, de la Solidarité et de la Fonction Public, and Amossé and Wolff, September 2009 (trade union density figure) 

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Main actors Trade unions

Trade union membership is quite low in France. Trade union densityhas fallen to 8%, according to data from the Centre for EmploymentStudies (Centre d’Études de l’Emploi,  CEE) (Amossé and Wolff,September 2009). Trade union presence in the workplace is high inlarge companies, but very low in smaller ones. The highest trade

union membership rates are to be found in the public sector.• Trade unions are mostly organised at sector or branch level andgrouped in several confederations. There are five main trade unionconfederations with membership across the entire economy  – theGeneral Confederation of Labour (Confédération générale dutravail, CGT), the French Democratic Federation of Labour(Confédération française démocratique du travail, CFDT), theGeneral Confederation of Labour  – Force ouvrière (Confédérationgénérale du travail - Force Ouvrière, CGT-FO), the French ChristianWorkers’ Confederation (Confédération française des travailleurschrétiens,CFTC 

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  and the French Confederation of Professional and Managerial Staff

 – General Confederation of Professional and Managerial Staff(Confédération française de l’encadrement  – confederation généraledes cadres, CFE-CGC)  – all considered to be representative atnational level. This status automatically gives representative tradeunions the rights to negotiate, to nominate candidates for electionsand to have seats in some of the social security bodies, which aredirected by the social partners.

• There are also other trade union confederations, which havesignificant influence but do not have a representative status atnational level. These so-called autonomous trade unions are theNational Federation of Independent Unions (Union nationale dessyndicats autonomes, UNSA) (the more reformist union), theIndependent Union  – Solidarity, Unity, Democracy (Solidaire,Unitaire, Démocratique, SUD) (the more radical union) and theUnited Union Federation (Fédération syndicale unitaire, FSU)(essentially present in the national education sector).

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Representative trade unionconfederations in France 

• CGT 

General Confederation of Labour, Communist origins 1895

• CFDT 

French Democratic Confederation of Labour

• Christian-Democratic origins, reformist trade union ,1919• CGT-FO or FO 

Workers’ power CGT dissidents, reformist, but radicalised trade union,1948 

• CFTC 

French Christian Workers’ Confederation 

Dissidents from CFDT, when this trade union abolished its Christian roots1964

• CFE-CGC 

General Confederation of Professional and Managerial Staff - GeneralConfederation of Professional and Managerial Staff

Sole occupational confederation ,1944

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• For most of the post-war period, the trade union movement hasbeen ideologically divided between the communist-inspired andmilitant CGT and the more left-reformist CFDT. Although periods ofunity have been achieved between CFDT and CGT, division hasbeen the rule. Recently, the trade union movement in France hasexperienced a sharp decline in membership numbers and influence.For example, voter turnout in works council elections has declinedcontinuously since the 1960s, while non-union candidates havegained considerable support in these elections over the years.

• As a consequence of these weaknesses, the trade union movement

encounters organisational and financial problems. New trade unionsand other non-governmental organisations (NGOs) have been

established as channels of social protest and social  movement

competitors for the trade unions

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Employer organisations • In contrast with the trade unions, employer organisational density is

quite high (Traxler, 2004). Three out of four employers are membersof an employer organisation.

• MEDEF, which is the main employer organisation, is a multi-layeredconfederation of sector and territorial organisations bringing togethercompanies with more than 10 employees. MEDEF directly organises

87 federations that cover some 600 associations and 165 regionalorganisations. There is no direct company membership at theconfederation level. MEDEF has been established in 1998 andsucceeded the former National Council of French Employers(Conseil national du patronat français , CNPF).

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• Two smaller employer associations are worth mentioning. Small and

medium-sized enterprises (SMEs) are represented by the GeneralConfederation of Small and Medium-sized Enterprises(Confédération générale des petites et moyennesenterprises, CGPME) and self-employed craft workers by theCraftwork Employers’ Association (Union professionnelleartisanale, UPA). These two employer organisations played asignificant role in reducing working time in small and very smallenterprises in 2002. In 2001, an employer organisation has beencreated in the not-for-profit sector, namely the Council forBusinesses, Employers and Trade Associations in the SocialEconomy (Conseil des entreprises, employeurs et groupements de

l’économie sociale, CEGES).• As is the case for workers, membership of employer organisations is

voluntary in France. The number of members is given by eachemployer organisation; it is therefore difficult to access real figures.The majority of employer organisations do not wish to divulge

information on their membership.

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Collective bargaining• Negotiations can be carried out at all levels of economic activity,

provided that some recognised actors take part in the negotiations.The structure of the bargaining levels is pyramidal, and statute lawplays a pivotal role. As long as the law is respected, thedecentralised levels have more autonomy to negotiate wages andworking time and more flexibility in general issues concerning therelationship between employer and worker.

• Some collective agreements, often framework agreements, can besigned at national level. After a decline in multi-sector bargaining inthe 1970s and 1980s, it has been relaunched in the 1990s, althoughto a limited extent and concentrating on specific topics, suchas vocational training and employment measures.

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Collective bargaining coverage is very high in France. About 90%of workers are covered by a collective agreement. This is becausecollective agreements are easily extended to entire sectors of

activity and/or to different geographical regions or other economicsectors. The government can extend collective agreements at therequest of one of the bargaining parties. Such extensions decidedby a public authority have been used in different branches to leveladvantages given to workers and to avoid competition. These

extensions of agreements have historically been used to improveworking conditions. As a consequence, even companies that arenot members of an employer organisation but have signed anagreement are covered by a sectoral agreement once it has beenextended by the government

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Industrial conflict• The characteristics of the French industrial relations system

contribute to a discordant atmosphere. Due to the lack ofcoordination between the state and the social partners, as well asbetween and within the social partner organisations, strikes arefrequent in France. However, the number of strikes has declined inrecent years.

• Most of the strikes occur in the public sector and especially in thepublic transport sector. Another feature of the strike pattern is thegrowing importance of wider employment issues as motives, suchas working time, restructuring and downsizing. About 80% of strikesare initiated by trade unions and 20% can be defined as unofficial (atthe beginning). Lastly, trade unions use mass demonstrationsaccompanied by one-day strikes as a major strategy to put pressureon the government. For example, in February and March 2005several hundred thousand people rallied in the streets of Paris to putforward their demands regarding pay, employment and the 35-hourworking week.

Al h h h i li l l i l i ik h l b

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• Although there is little legislation on strikes, there are elaborateprocedures for settling disputes, but these procedures are rarelyused in practice.

. In 2006, strike action occurred in 1.9% of companies with over 10employees; this constituted a decline compared with the 2005 figureof 2.7%. The number of working days lost due to strike actions in2006 amounted to 1,415,000 days, which is 23% fewer workingdays lost than in 2005.

• In 2008, the trade unions organised several days of nationwidestrike action. Several days of strike action were organised to protestagainst the government’s plans to increase the retirement age andto dismantle the 35-hour working week, specifically on 15 April, 22May and 17 June. On 22 May, following a call to strike by the fiverepresentative trade union confederations, joined by theindependent union organisations FSU, UNSA and SUD, 700,000

people protested in 153 towns across France, according to tradeunion data – 300,000 people according to official figures.

• Although the large-scale retail sector is normally little affected bystrike action, three trade union organisations called for a strike on 1February 2008. According to the trade unions, 80% of workers in

hypermarkets and 65% in supermarkets went on a one-day strike

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Tripartite concertation • The main tripartite body through which employer and trade union

confederations can hope to influence government policymaking are purelyconsultative: the Environmental, Economic and Social Council (Conseiléconomique, social et environmental, CESE). CESE comprisesrepresentatives of employer and trade union confederations, as well asother interest groups such as consumers, and qualified individualsnominated by the government.

• This type of consultation – or social democracy (démocratie sociale)  – remains underdeveloped and is essentially limited to the state testing thestrength of opposition to its policies. CESE appears to be a body throughwhich the government explains and informs employers and trade unionsabout its policies, rather than a body with whom a genuine consensus issought.

• However, French business has increasingly criticised these forms oftripartism in the past decade.

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• The 2007 Law on modernising social dialogue (inFrench) established compulsory consultations before thegovernment can pass any reforms on:

• individual and collective industrial relations;• employment;

• vocational training..

• The new law stipulates that any proposed reform in the field ofindustrial relations, employment and vocational training should first

be subject to consultations with the national-level representatives oftrade unions and employer organisations. The government willprovide these bodies with a policy document, which presents‘diagnoses, objectives and principal options’. The social partners willthen be able to indicate whether they intend to embark on

negotiations and how much time they need in order to reach anagreement. This procedure will not apply in ‘emergency situations’;in such cases, the government would have to justify its decision,which can be legally challenged.

• When drawing up a draft law following the consultation procedure,

the government is not obliged to adopt the content of a collectivea reement as it is.

H d di th i t h d it t b it th bill t

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• However, depending on the issue at hand, it must submit the bill to:

the National Collective Bargaining Commission (Commissionnationale de la négociation collective, CNNC) for reformsconcerning industrial relations;

• the Higher Employment Committee (Comité supérieur de l’emploi, CSE) for reforms in relation to employment;

• the National Council for Lifelong Vocational Training (Conseilnational de la formation professionnelle tout au long de lavie, CNFPTLV) for reforms with regard to training.

• The social partners that are represented in these bodies havetherefore the possibility of assessing whether or not the

government’s proposals are in line with the relevant collectiveagreement and, if necessary, to give their opinion.

• According to the new law, the government has to present to the

CNNC each year the main policy orientations in the areasconcerned, as well as its programme of reforms for the next year. Atthe same time, the social partners must outline the state of progressof cross-sector collective bargaining and their planned programmefor the year ahead. Furthermore, the government must present tothe parliament an annual report on the state of consultations in thepast year.

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Workplace representation 

• According to the European Social Survey, about 72% of workers

state to have a trade union representation or similar body at theworkplace.

• There are many structures for employee representation.Representation about most issues is provided by two separateelected bodies:

1.employee delegates  – they should be elected by all workers in allestablishments with more than 10 employees and are responsiblefor presenting individual and collective grievances to managementand ensuring the implementation of legislation and collectiveagreements;

2.works councils, either at company level or at establishment level .They should be set up in private sector companies with more than50 employees. They comprise the head of the company andemployee representatives, who are elected by the whole workforceevery two years. Works councils receive information from employers

in areas such as the economic and social evolutions and newtechnologies.

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They also respond to formal consultations by employers in areas such asredundancies and vocational training, and are responsible for managingsocial and cultural activities, for which they have a budget. In a multi-

establishment company or in a group of companies, works councils alsoform a central works council (comité central d’entreprise) or a group-levelworks council (comité de groupe ), which enjoy similar rights to those ofordinary works councils.

• Usually, the employee delegates and the works council are separateinstitutions, although the same people can be elected to both. Furthermore,

under specific conditions the institutions of works council and employeedelegates can merge their responsibilities to form a single entity, known asthe unique delegation (délégation unique ). This is allowed when theestablishment comprises between 50 and 200 employees..

• Since 1968, trade union rights have been recognised in companies andtrade unions have been entitled to appoint union stewards (délégués syndicaux ), who have the power to negotiate and sign collectiveagreements at company level  – a power the other worker representationbodies do not have. Agreements require the signature of only one tradeunion steward to be valid for all employees, even if the signatory trade unionis a minority one.

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• France has one of the most developed patterns of employees’ financial participation. The number of employees covered by profit-sharing or capital-sharing schemes is high. Company agreementsform the basis of this elaborate system. However, board-levelparticipation is rare.

ay an wor ng me

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ay an wor ng medevelopments 

• Minimum wage

• The statutory minimum wage (SMIC) is set by legislation and coversall workers. It is a cross-sector minimum wage. Specific minimumwages are also agreed through collective bargaining. However,most of these sectoral minimum wages are lower than the SMIC( €1,337.70 gross a month in 2009). Hence, the legal minimum wageis important.

• In half of the 74 private sector industries, minimum pay, as set out inindustry-wide agreements, is still lower than the SMIC and thecorresponding pay scales are considered to be obsolete .

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Working time 

• All French companies have negotiated working time reductions inthe period 2000 –2004.

• The results of these years of bargaining on working time cuts havebeen considerable. The average collectively agreed working timewas close to 37 hours in 2000 and has been gradually reduced to35.6 hours. This is by far the shortest European working week .Weekly working time is no longer being reduced; a slight trendtowards extending working time was observed in the middle of 2004.These working time agreements have resulted in a short actualworking week. Usually, French full-time employees work less than

39 hours a week.