JILPT Research Report No.178
Collective Agreement Systems in Modern Industrialized Nations:
Company-based Collective Agreements in France

May 29, 2015

Summary

Research Objective

To clarify the extent to which company-based collective agreements are still important in France, and the degree to which decentralization to the company or works level has advanced.

Research Method

Basic survey using reference literature obtainable in Japan, together with interview surveys and gathering of reference literature in the country concerned (France).

Major Findings

  1. In France, a point to note is that there has historically been no tradition of dialog between labor and management, and governance based on laws was very strong. This situation was greatly impacted by the weak organizational strength of labor unions in France, where, until 1968, it was actually not possible to establish a union branch within a company. Even before 1968, negotiations at company level existed, mainly in state-run enterprises (and large corporations), but these were no more than discussions with employee representatives, and the agreements concluded there were not legally recognized as collective agreements.

  2. Bargaining at company level in France became more actively pursued when certain statutory subjects to negotiate were made mandatory. Specifically, the Auroux laws of 1982 established an annual obligation to negotiate on wages, working time and other basic working conditions as matters for negotiation every year, leading to a great increase in negotiations and agreements at company level. In fact, company-based agreements have increased from the modest rate of around 5,000 cases per year in the first half of the 1980s to between 35,000 and 40,000 cases at present. Thus, the fact that both negotiations and agreements at company level have become more active, based on support from legislative policy, is an important characteristic of negotiations and agreements at company level in France.

  3. Company-based agreements are supposed to have the basic function of adding more favorable working conditions to the groundwork of norms laid down by law and by industrial agreements as “occupational law”, based on the traditional “'profitable principle (principle de faveur)” in France. However, against the backdrop of the economic situation in the 1980s and 90s and the progressive individualization (decentralization) of wage determination systems, the role of negotiations and bargaining or agreements at industry level, which used to have a certain degree of direct influence on individual decisions of working conditions, gradually acquired a stronger function of guaranteeing minimum standards of working conditions. As a result, in companies with infrastructure enabling labor-management negotiations at company level to function sufficiently –– i.e. mainly large corporations in which labor unions have sufficient organizational infrastructure internally –– working conditions that far surpassed those determined at industry level came to be determined through negotiations and agreements at company level.

  4. The 2004 Fillon Law abolished the profitable principle (principle de faveur) and significantly expanded the potential (generally available) for gaining exemption from application of the company-based agreements. In reality, however, little use has been made of this system. Behind this is the fact that negotiations at company level in France, except in some large corporations, have only developed under the guidance of legislative policy (mainly involving mandatory bargaining on statutory subjects) since the Auroux laws, while autonomous company-level dialog between labor and management has not expanded that greatly. On the other hand, in (super) large corporations where the base for labor-management dialogs had already existed, even before the Fillon Law, working conditions were already being decided through negotiations and agreements at company level, that go far beyond the standards determined (as minimum conditions) by industry-based collective agreements. This has created a situation in which concluding exemption agreements in itself is not considered necessary even in such large corporations. Thus, the abolition of the profitable principle (principle de faveur)through the expansion of the exemption system under the 2004 Law seems not to have overturned the traditional French system of establishing norms, in terms of guaranteeing minimum levels of labor conditions based on laws and industry collective agreements, in conjunction with the legislative allowance of exceptions concerning industry-specific minimum wages and other matters belonging to public policy, and the method of using zipper clauses to seal exemption agreements.

  5. Of course, in the impact of labor relations, there is also a gradual decline in France, negotiations and agreements at industry level.

    Particularly in large corporations mentioned above, decisions on working conditions (mainly wages) based on negotiations and agreements at company level had already established even before the 2004 law. That is to say, negotiations and agreements at industry level no longer exert a strong influence for these companies or their workers, though only concerning some labor conditions. Moreover, the consequent widening disparity in working conditions between workers in large corporations and those in small and medium-sized enterprises within an industry brings conflicts of interest within both labor and management organizations, and, thus, the risk of decreasing the bargaining functions at industry level.

  6. Finally, the expansion of powers to make decisions within a company in areas outside working conditions should also be mentioned. That is, the role played by employees’ representative bodies such as works councils (comité d’entreprise) has gone beyond the traditionally recognized matters related to employees’ welfare in recent years; they now fulfil the function of providing various information on the state of the management and holding consultations with the company.

    Considering the election process of works council’s members, many of their members are also members of the company’s union branch. So, it would normally be hard to imagine employees’ representative bodies taking over the functions of labor unions (company union branches). However, the aforementioned expansion of the powers of works councils, etc., is expected to broaden the roles of company unions with regard to important management and decisions inside companies. This in turn could reduce the relative importance of labor-management bodies at industry level, as well as bargaining between them.

Policy Contribution

This Research is expected to be used as a basic material for macro-policy discussions on issues such as future directions for systems of collective industrial relations.

Main Text

Research Category

Project Research: "Survey Research on vocational capability development systems in response to economic and social changes"

Subtheme: "Survey Research on directions for capability development and career formation inside and outside company"

Research Period

FY2014

Author

Ryo HOSOKAWA
Researcher, the Japan Institute for Labour Policy and Training

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