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Collective Bargaining

Collective bargaining takes place at national, industry and company level and at each level there are detailed rules about who can negotiate and the requirements for an agreement to be valid. Industry level agreements are the most important level for negotiation in terms of numbers covered, although legislation introduced in 2017 has given precedence to company level agreements in certain areas.

The framework

 

Collective bargaining can take place at three levels: at the national level covering all private sector employees; at the industry level which can involve national, regional or local bargaining; and at company or plant level.

 

The framework for collective bargaining has been substantially changed by a series of legal measures in recent years, with major legislation being introduced in May 2004, January 2007, August 2008, June 2013, August 2016 and, most recently, September 2017 (the so-called Macron Ordonnances).  In broad terms these changes have steadily increased the importance of company-level agreements at the expense of industry level negotiations, as well as tightening and clarifying the rules on who is entitled to bargain, and the circumstances under which agreements are valid. The legislation passed in 2007, on national level bargaining, is something of an exception to these general trends.

 

Looking at each of the bargaining levels of in turn, it is clear that the 2007 legislation[1] has enhanced the importance of national level collective bargaining by giving unions and employers a much clearer role in the development of legislation in the areas of industrial relations, employment and training. Under its terms, when the government wishes to make changes in these areas, it must first consult with employers and unions on the basis of a document setting out its analysis of the situation, aims and potential options, and allow them, if possible, to reach an agreement on the issue. The government must also formally consult on the draft legislation. This system does not commit the government to accept any agreement and in cases of “urgency” it can bypass the process entirely, but it clearly strengthens the importance of the negotiations between unions and employers at national level.

 

An indication of the significance of this level of negotiation is provided by the fact that the 2008 legislation reforming the rules on the representative status of unions (see section on unions) was in line with a common position reached by the CGT and CFDT, although not the other unions, and employers in these national level discussions. Figures from the report on collective bargaining produced each year by the ministry of labour indicate that three economy-wide national level texts were agreed in 2017 and one in 2016.[2]  The 2017 agreements covered unemployment insurance, where major changes were introduced, insurance for senior staff and pensions.

 

Industry-level bargaining is the most important level for collective bargaining, in terms of the numbers of employees covered, and, although, as a result of legal changes, in some areas company agreements now take precedence, there are others, such as minimum pay rates, where industry-level agreements continue to set the rules. There are also certain issues where negotiations are obligatory (see section on the subject of negotiations)

 

Figures from Dares, the research and statistical section of the French Ministry of Labour, show that at the end of 2015 there were 464 separate groups of employees covered by industry-level agreements. However, there are big differences in their size and significance. The 270 agreements covering at least 5,000 employees account for 98.1% of all employees covered by collective agreements, while the 100 covering between 1,000 and 4,999 employees make up just 1.7% of all employees and the 94 covering fewer than 1,000 account for a tiny 0.2%.[3] Many of the published statistics, therefore, only examine the agreements covering 5,000 or more. 

 

There will often be several agreements covering different aspects of terms and conditions for the same industry grouping (see section on the subject of the negotiations below). As a result, the ministry of labour’s annual report on collective bargaining always shows a higher number of industry-level agreements than industry groupings. The report for 2017 shows that 1,094 industry-level agreements of various types had been signed for that year by the end of March 2018, with others expected to be registered after that date.[4] Of these 480, dealt with pay, although in some cases more than one pay increases was linked to the same main agreement. Among the 299 industry agreements identified in 2017 as covering 5,000 or more workers, four out of five (81%) had reached at least one agreement on pay in 2017.

 

These industry-level negotiations primarily take place at national level. In 2017, more than two-thirds (70%) were signed for the whole of France, a proportion similar to earlier years. However, the situation on industry-level negotiations on pay is different; only around half of the agreements on pay were signed at national level, with the rest being agreed at regional or local level.

 

In the past, some of the agreements in place had only limited importance in determining pay, as they were often out of date, resulting in the rates they set being below the national minimum wage. In response, successive governments have for some time attempted to strengthen the system by encouraging smaller industry groupings to merge, with the intention of reducing the number from more than 700 in 2015 to around 200 by 2019 and just 100 by 2024. The aim is that both sides should have the resources to negotiate regularly and keep the agreements up-to-date.

 

These efforts have had significant success. As already stated, 81% of the 299 industry-level groupings, covering at least 5,000 employees, agreed pay increases in 2017; and  the proportion which had minimum rates below the national minimum wage immediately before the annual increase in January is now just 11%. (This figure has been unchanged since 2013.) However, the national minimum wage remains a crucial factor in pay setting in France, with 43% of all industry groupings having the lowest rate in their industry-level agreements within 1% of the national minimum wage in December 2017.

 

Agreements between unions and employers at industry level are binding on the employers belonging to the employers’ associations which sign the deal. However, their importance, in terms of numbers covered, is greatly increased by the fact that the government also has power to extend the terms of an industry-level agreement to all the employers (and employees) in the industry concerned, and even to enlarge it to other similar industries or beyond its initial geographic scope.

 

Extension or enlargement can be requested by any of the parties to the agreement concerned, and the decision is taken by the minister, advised by a subcommittee made up of representatives of the unions and the employers. Other than requiring that the agreement meets a number of formal conditions, such as ensuring that the agreement has been signed by the appropriate bodies, there are no specific thresholds – such as covering a set proportion of employees – which need to be met, although, as a result of changes made in 2017, employers’ organisations now have a clear right to object to the extension of an agreement.

 

Enlargements of an agreement to new areas beyond its original geographic or industrial scope are relatively rare. Only five enlargements were approved in 2017.But extensions, where the terms of an agreement are extended to all employers in the same industry, are very common. As a report in 2017 by the official government body DG Trésor points out, extension requests are made in respect of around 80% of the industry-level agreements and these requests are “only very rarely refused”.[5] The report also notes that extensions are generally asked for by the employers’ associations.

 

In 2017, as the annual report on collective bargaining shows, there were 887 requests to extend agreements of which 765 were approved. Around half of the extensions approved (385) related to pay. With 480 agreements covering pay signed in 2017, this means that 80.2% of these agreements were extended.[6]

 

This “quasi-systematic procedure of extension” is, as the report from DG Trésor notes, linked to the very high level of collective bargaining coverage in France.  A study by Dares in 2006 estimated that 97.7% of employees outside public administration (that is including state-owned companies) were covered by collective agreements in 2004,[7] and there is no reason to believe that it has fallen since then. The latest estimate from the OECD puts collective bargaining coverage in France at 98.5% in 2014.[8]

 

The importance of company-level negotiations has grown in recent years and the legal changes introduced in September 2017[9] marked a crucial new step, ending the previous situation, where industry-level agreements had priority, except in specifically defined circumstances, primarily negotiations on working time and leave. Since 2017, the position has been reversed. It is now company-level agreements that have priority unless the law specifically gives precedence to industry-level agreements.

 

Issues for negotiation are now divided into three blocks:

  • issues where the law states that industry-level agreements take precedence, in other words company-level agreements cannot set terms which are less favourable to employees than those in the industry-level agreements (Company-level agreements have always and continue to be able to set more favourable terms.);
  • issues where industry-level agreements continue to take precedence, because the industry-level agreement itself has stated that this should be the case and the law permits this; and
  • issues where company-level agreements take precedence, irrespective of what the industry-level agreement states.

   

The issues in this first block, with industry-level agreements setting binding rules, are largely those setting minimum guarantees. They include minimum salaries, job classifications, equal opportunities, the minimum length of part-time work, overtime rates, rules on renewing probation periods, health insurance, rules on temporary contracts and the number of hours required to be worked to be defined as a night-worker.

 

The issues in the second block, where the terms of the industry level agreement itself determine whether it has precedence, are the prevention of occupational risks, the employment of disabled workers, the arrangements for trade union representation, including their number, and supplements for dangerous or hazardous work.

 

The issues in the third block include everything else, although some of them are also covered by statutory regulation. Bonuses, paid holidays, most issues relating to working time, notice periods, payments for travelling time, compensation for dismissal and the initial length of the probation period, can all be agreed at company level, without reference to industry-level agreements.  

 

As with industry-level agreements, there is a legal requirement to negotiate periodically on some of these issues at company level (see below), although this depends in part on the size of the company and the existence (or otherwise) of a trade union representative to negotiate with. However, while there are penalties if these negotiations do not take place, it is important to stress that there is no obligation to reach an agreement, and sometimes the employer will simply listen to the unions' demands and implement a unilateral decision.

 

In practice, a detailed analysis of negotiations in 2016 by the ministry of labour’s research body Dares found that 14.7% of companies employing 10 or more workers in the commercial sector outside agriculture engaged in collective bargaining. However, the existence of negotiations is closely linked to the numbers employed: only 7.0% of companies with between 10 and 49 conducted negotiations, compared with 95.2% of companies with 500 or more employees. Above the legal threshold of 50 (see below) more than half of all companies (51.4%) are covered. With larger companies more likely to be involved in negotiations, 62.0% of all those working  in commercial companies with more than 10 employees are covered by company-level collective bargaining.[10]

 

Who negotiates and when?

 

Negotiations are normally conducted by the trade unions on one side and employers’ federations or individual employers on the other. However, the rules setting out precisely who has a right to negotiate and the circumstances under which agreements are valid are complex.

 

Legislation introduced in 2004, 2008, 2016 and 2017 has produced important changes in the rules for bargaining at all levels – national, industry and company. Before these various pieces of legislation were introduced, it was sufficient to get just one representative union to sign for an agreement to be valid, but this is no longer the case.

 

At national level, agreements can only be signed by “representative” trade unions. There are five large national union confederations, which are nationally representative: CFDT, CGT, FO, CFE-CGC and CFTC (see section on unions). National agreements are only valid if they have been signed by a confederation or confederations with at least 30% support nationally, and if they are not opposed by other confederations that together have majority support. However, in calculating levels of support and opposition, only the results of the five national representative confederations are included; the votes for the other confederations like UNSA and Solidaires are ignored. This means that the current voting strength in national negotiations is as follows: CFDT (30.33%), CGT (28.56%), FO (17.93%), CFE-CGC (12.28%) and CFTC (10.90%).

 

At industry level, the organisations that have negotiating rights on the union side are the union industry federations which have shown that they have at least 8% of the votes cast in the elections for employee representatives in the specific industry. The automatic representative rights of the industry federations of nationally representative confederations, which previously did not have to show a minimum of 8% support in the industry concerned, ended in 2017. This means there are many industry groupings where not all confederations are representative. Of the 411 industry groupings where the figures had been collated by 14 March 2018, the CFDT and CGT had at least 8% support and so were considered representative in the vast majority, but the CFTC was represented in many fewer and in some industries other confederations had sufficient support to be pass the representativeness threshold (see table).[11]

 

Union confederation

Number of industries in which union has more than 8% support

Percentage of industries with more than 8% support

CFDT

378

92%

CGT`

374

91%

FO

327

80%

CFE-CGC*

284

69%

CFTC

187

45%

UNSA

81

20%

Solidaires

33

8%

* The figures for CFE-CGC only relate to the managers and senior employees it represents.

   

As at national level, industry-level agreements must have been signed by unions with at least 30% support in the industry, and not be opposed by unions with more than 50% support in order to be valid.

 

At company level, the rules on who can bargain and which decide whether agreements are valid are more complicated and vary according to the numbers employer and the presence or absence of a union representative.

 

The standard case is where company-level negotiations take place between the employer and the union delegates. These are individuals nominated by one or more representative trades union present in the workplace. A representative union must, among other things, have the support of 10% of the workforce, as indicated by the votes in the first round of the elections for employee representatives (see section on workplace representation). Union delegates must also receive at least 10% of the votes as individuals in these elections. Unions only have the right to appoint a union delegate in companies with more than 50 employees.

 

If the unions signing the agreement represent more than 50% of the employees, as indicated in the most recent elections for employee representatives, the agreement (called a majority agreement) is immediately valid.

 

Agreements can also be valid if they are signed by unions with the support in the most recent elections of less than 50% but more than 30% of the workforce. However, these agreements (called minority agreements) need some form of endorsement by the workforce. Either one of the signatory unions can ask for a ballot of the whole workforce to be organised, or the employer can ask for a ballot, provided that none of the signatory unions object. If, within eight days, enough other union organisations also agree to sign the agreement, and so take support to more than 50% of the workforce, it is then valid. If this is not the case, a ballot of the whole workforce must be organised within two months. If a majority of those voting in this ballot approve the agreement, it is then endorsed and comes into effect.

 

Previous rules, allowing unions with the support of at least 50% the workforce and opposed to the agreement to block it before it could be put to the vote, were removed by legislation passed in 2016.

 

These arrangements have, since 1 May 2018, applied to all areas covered by company-level collective bargaining. Before the changes introduced in September 2017, many of these arrangements only applied to company agreements covering working time and leave.

 

Since the Macron changes, it has also been possible to union delegates to agree that in future the power to negotiate company-level agreements should pass from the union delegate to the elected representative body of the employees – now called a Social and Economic Committee (CSE). This is a permanent change, and, where it occurs, it produces veto powers for the CSE in some areas – see section on Workplace Representation. However, this change is only possible on the basis of a majority agreement agreed by unions representing more than 50% of the employees.

 

The situation is different in companies where there are no union delegates, and here other representatives of the employees are able to negotiate and reach agreements, although the rules vary between companies with 50 or more employees and those with fewer than 50.

 

In companies with more than 50 employees but no union delegate, there are three possibilities, in the following order of precedence.

 

First, if possible, the employer negotiates with one or more of the existing elected employee representatives who have been mandated for this task by one or more of the representative unions. Agreements reached in this way must be endorsed in a ballot of the workforce and are only valid if approved by a majority of those voting.

 

Second, if the elected employee representatives do not wish to be mandated by a union, the employer can still negotiate with them. However, the agreement is only valid if is signed by employee representatives who together have the support of more than 50% of the workforce, as indicated in the most recent elections for employee representatives. It is also limited to the issues that have to be negotiated, such as arrangements for working time. Agreements negotiated in this way do not require a workforce ballot. (An earlier requirement that the agreement had to be endorsed by a joint union-employer committee at industry level was removed by legislation introduced in 2016.)

 

Third, if no elected representative wishes to negotiate, the employer can negotiate with a non-elected employee who has been mandated for this task by the union. Any agreement reached in these circumstances must be approved in a ballot of the workforce.

 

In companies with between 11 and 49 employees, there are two main options, plus an additional option for the smallest companies. In option one, the employer negotiates with existing elected employee representatives, who may or may not be mandated by the union, but who must represent a majority of the workforce, for the agreement to be valid. This option does not require a workforce vote. In option two, the employer negotiates with employees who are not elected representatives but have been mandated to negotiate by one or more of the representative unions. In this case a workforce vote in favour is required for the agreement to be valid.

 

Finally, in companies with fewer than 11 employees and, as an alternative to other options in companies with 11 to 20 employees the employer can reach agreement directly with all employees. This involves the employer presenting his or her proposal for an agreement to the employees at least 15 days before a consultation to decide whether or not to accept it. Two-thirds of the employees must support it before it can be agreed.

 

The report on collective bargaining in 2017 indicates that the majority of documents setting out terms and conditions at company level were agreed with the unions. Out of a total of 61,391 texts deposited with regional government offices, 52.6% were signed by trade union delegates or individuals mandated by the unions, 9.4% were signed by elected workplace representatives, 20.9% were endorsed in a ballot of the workforce (largely relating to employee saving schemes, where an agreement is normally required to set up such a scheme) and 17.2% were the result of unilateral employer decisions.[12] These figures do not reflect the legislative changes introduced in September 2017.

 

As with who can negotiate and sign agreements there are detailed rules on when the topics covered by the agreements at industry and company level must be negotiated. These rules too were changed by legislation introduced in September 2017.

 

At national level, there is no specific timetable, but the law lays down much stricter rules on when issues must be negotiated at industry and company level. At both levels there is the possibility of the two sides agreeing a timetable setting out when the issues will be negotiated – subject to limits set by the law, but if a timetable is not agreed – a legal fall-back timetable comes into effect.

 

At industry level, it is possible for the two sides to agree a calendar which ensures that there will be negotiations on most of the topics where negotiations are obligatory (primarily pay, equality of opportunity, working conditions and training – see below) at least every four years. The four year limit cannot be exceeded for these issues. However, if there is no agreement on a calendar these topics must be negotiated at least every three years, apart from pay, which must be negotiated annually.

 

In practice, industry-level negotiations are signed throughout the year, with the virtual exception of August. However, they are concentrated in the first four months of the year. (In 2017 57% of all agreements were signed between the start of January and the end of April and the figures are similar for earlier years.[13])  

 

At company level, where since 2016 there has been encouragement for companies to reach agreements setting out how negotiations will be conducted – including a calendar of topics to be dealt with – it is possible for unions and employers to sign a so-called “anticipatory agreement” (accord d’anticipation). If there is such an agreement, which can run for a maximum four years, the topics on which negotiations are obligatory (pay and working time, equal opportunities and, in larger companies, staffing plans and career development – see below) only need to be dealt with every four years. However, if there is no agreement setting out the timetable, negotiations on pay and working time and equal opportunities must take place every year and on staffing and career progression (in larger companies) every three years.

 

The subject of the negotiations

 

National level negotiations for the whole economy cover a wide range of issues, including social security and industrial relations.

 

Negotiations at industry level cover a wide range of issues, including some where there is a requirement that negotiations take place.  The areas where industry-level negotiation is obligatory are:

  • pay;
  • equality between women and men and measures to tackle the inequalities identified;
  • working conditions, staffing and career development and exposure to occupational risks;
  • disabled workers;
  • occupational training;
  • job classification;
  • employee saving schemes; and
  • arrangements for organising part-time work.

 

As stated above, most of these topics must be negotiated at least every four years, provided a timetable for negotiations has been agreed, and more frequently, either annually or every three years, where there is no timetable. The exceptions are job classifications and employee saving schemes, which must in all cases be negotiated every five years, and arrangements for part-time work, which must be negotiated as soon as a third of the employees in an industry are working part-time.

    

Unsurprising, it is often the obligatory issues which dominate negotiations at this level. The report on collective bargaining in 2017 found that of the 1,094 agreements signed in that year, 480 covered pay, 169 equality between men and women, 52 working conditions and health and safety and 153 occupational training. Other subjects covered in agreements signed in 2017 included negotiating arrangements (319), the conditions under which the agreements should be implemented (188), bonuses (163), complementary pensions and health coverage (128) and employment contracts (86). Each agreement may cover several subjects, which explains where the total of subjects covered adds up to more than 1,094.[14]

 

At company level there are also issues over which there is an obligation to negotiate, although only where other conditions are also fulfilled. Where one or more union sections exist in the company, in other words, where unions are present, the employer must negotiate on two blocks of topics:

  • pay, working time and the distribution of the value added in the company; and
  • equality between men and women, in particular measures taken to reduce the pay gap and on the quality of working life.

In addition, in companies with more than 300 employees and in companies with at least 1,000 employees across the EU and at least 150 in France, there must also be negotiations on long-term staffing plans and career development.

 

Negotiations at company level are not limited to these obligatory areas. Employers and unions are also free to negotiate on other issues, other than those covered by industry-level bargaining. Unions at company level can also be involved in negotiating redundancy agreements (see section on workplace representation).are obligatory

 

In practice, as the report on collective bargaining in 2017 shows, pay and bonuses are the commonest topic for negotiations at company level.  Among the more than 32,000 agreements signed by union representatives, more than a third (37%) dealt with pay and bonuses. This was followed by working time (25%), equality (12%), employment (10%), union rights and employee representation (9%) and complementary pensions and health coverage (7%)..

 

As well as setting the rules for collective bargaining, the state plays a very direct and important role in determining its outcome in terms of pay by setting a national minimum wage (SMIC). This is uprated at least annually, based on the inflation experienced by the poorest fifth of French households, plus half the increase in purchasing power of all employees. In addition the government can, and sometimes does, increase it by more than this. In 2018, almost two million people (1,980,000) or 11.5% of employees in the private sector (other than apprentices and temporary staff) benefitted directly from the 1.2% increase in the minimum wage on 1 January 2018.[15]

[1] LOI n° 2007-130 du 31 janvier 2007 de modernisation du dialogue social

[2] La négociation collective en 2017 Ministère du travail,  2018

[3] Portrait statistique des principales conventions collectives de branche en 2015,by Florent Boudjemaa, Dares March 2018

[4] La négociation collective en 2017 Ministère du travail,  2018

[5] Dialogue social sectoriel et décentralisation des négociations: Étude comparée France/Allemagne, by Marine CHEUVREUX and Laurence RAMBERT, Les Cahiers de la DG Trésor –n° 2017-01, February 2017

[6] La négociation collective en 2017 Ministère du travail,  2018

[7] La couverture conventionnelle a fortement progressé entre 1997 et 2004, Dares, 2006

[8] OECD.Stat  https://stats.oecd.org/ (Accessed 24.01.2018)

[9] Ordonnance n° 2017-1385 du 22 septembre 2017 relative au renforcement de la négociation collective

[10] La négociation collective d’entreprise en 2016, Dares, December 2018

[11] La négociation collective en 2017 Ministère du travail,  2018

[12] Ibid

[13] Ibid

[14] Ibid

[15] La revalorisation du Smic au 1er janvier 2018: Les salariés des TPE trois fois plus concernés by Alban Guichard et Christine Pinel Dares, November 2018

L. Fulton (2020) National Industrial Relations, an update. Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.