JILPT Research Eye
Possibilities and Problems in the Use of Legal Policy to Promote Labor-Management Dialog
―From the experience of France

June 14, 2016
Originally published on December 4, 2015 in Japanese)



Researcher (Major Area: Labor Law), Department of Industrial Relations

Since 2012, JILPT has been engaged in a “Research Project on Directions for Collective Labor-Management Relations in Connection with the Establishment of Norms”, focusing on collective bargaining systems in Germany, France and Sweden. For details on the findings of this research, please refer to the respective articles of JILPT Research Reports. Here, the focus will be turned toward legal policy designed to promote labor-management dialog, one of the main pillars of French legal policy on collective labor relations over the last 30 years, as well as the consequences arising from it.

I. Fragile Labor Relations and State Initiatives

In France, one factor behind the adoption of legal policies to promote labor-management dialog is the fragility of labor relations.

Unlike other countries such as Germany, where there has been a strong tradition of bargaining autonomy, France has a low unionization rate. Even at its peak, the rate is said never to have exceeded 25%. And partly due to an emphasis on individual freedom concerning union activities, multi-unionism has traditionally been adopted. This has caused a further decline in the organization rate of individual unions, meaning that there is no basis for achieving labor relations autonomy (bargaining autonomy) without state intervention, as in Germany.

To address this, the French legal system has created the concept of “representative labor unions”. These have been authorized to establish working condition norms for all workers (including non-members) by means of labor agreements. Based on a system for expanded application of industry-specific labor agreements (hereinafter “industry agreements”), industry agreements entered into by representative labor unions apply to all workers in a given industry – regardless of whether they are union members, or whether the employers belong to employers’ organizations.

Thus, the fragility of the basis for labor relations (and particularly labor unions) in France has been sustained through compensation by the system of representative labor unions and the system of expanded application of industry agreements. In one sense, this could be interpreted as meaning that the system for establishing norms in collective labor relations has been maintained through state support.

To summarize the foregoing, in French collective labor relations, industry agreements have been strongly empowered to establish norms via the system of representative labor unions and the system of expanded application of industry agreements.

On the other hand, partly due to the traditional reluctance of French employers to accept in-house unions, labor relations at company level have been extremely tenuous (with the exception of some companies like Renault). And in terms of industry-level labor relations, similarly, labor-management dialog has failed to function in several sectors, mainly in service industries where small businesses account for the majority.

Given this background, promoting labor-management dialog with a view to forming autonomous labor relations has been an important policy issue for France since the 1980s.

II. Policies Promoting Labor-Management Dialog in France

In view of the background described in Section I. French legal policy on collective labor relations has devoted much of its energy since the 1980s on promoting labor-management dialog, mainly at corporate level.

One of the most important of these policies was legislation on mandatory negotiation on certain statutory subjects, pioneered by the Auroux reforms at the beginning of the 1980s. Specifically, a law enacted on November 13, 1982 as part of the Auroux reforms established an obligation to engage in collective bargaining with representative labor unions at both industry and corporate level. At corporate level, in particular, the law made it compulsory to engage in collective bargaining on the basic labor conditions including real wages and working hour systems every year. Since then, the scope of mandatory negotiation has been expanded through repeated legal amendments. In recent years, moreover, when a given instrument of policy legislation is drafted, it has often included an obligation either to conclude labor agreements on the method of implementing the new policy or, instead of this, for employers to create action plans to this end. In case of this obligation’s breach, economic sanctions such as stopping all or part of the reduction or exemption of social security burdens may be imposed. Policies like this have also been thought to promise effects in the promotion of labor-management dialog.

Of course, legislation on matters for mandatory negotiation such as the above are premised upon the prior existence of representative labor unions within companies. On the other hand, as stated in Section I, the fragility of labor relations in companies (i.e. the absence of labor union branches within companies, and the associated absence of labor-management dialog within companies) has become a problem in France.

Thus, as the second pillar of policies to promote labor-management dialog in France, steps have been taken to promote labor-management dialog in companies where there are no in-house labor union branches. Specifically, when there is no branch of a representative labor union within a company, a new system has been established that enables negotiations to be conducted and agreements entered by representatives elected through a ballot of employees, or employees entrusted with negotiations in industry-specific representative labor unions, on behalf of the in-house union branch. This has led to expectations that internal labor-management dialog could also be achieved in companies where there is no union branch.

III. Possibilities and Problems in the Use of Legal Policy to Promote Labor-Management Dialog

So, as a result of the promotion policies described above, is labor-management dialog at company level now functioning adequately in France?

One indicator for judging this may be provided by trends in the conclusion of company-specific agreements in France.

Here, while only about 4,000 company-specific agreements were concluded each year in France in the 1980s, today some 35,000 to 40,000 agreements are concluded every year. At the same time, there is no decrease in the number of industry-specific labor agreements; if anything, they are also in an increasing trend. These two facts in combination must surely be admissible as evidence that the series of legislative measures on compulsory negotiation, starting with the Auroux reforms, has had a degree of success in promoting labor-management dialog.

However, problems also come to the fore if we consider the main actors involved in company-specific agreements. Specifically, 7,489 company-specific labor agreements were concluded by employees’ representatives (on behalf of labor unions) in 2012, accounting for around 20% of all 38,799 company-specific agreements in that year. Yet the majority of these were agreements on employee welfare, consisting of in-house wage savings (a kind of internal deposit system) or company pension funds. Conversely, negotiations concerning the decisions of basic working conditions including wages and working hours have hardly reached the level at which employees’ representatives conduct negotiations and conclude agreements on behalf of labor unions.

Thus, from the viewpoint of promoting labor-management dialog in companies where in-house labor union branches exist, policies to promote labor-management dialog in France since the 1980s can be seen as yielding a degree of success. But from the viewpoint of promoting labor-management dialog in companies where in-house labor union branches do not exist, they still seem to present a number of problems.

So what can we learn from this French experience?
In our Research Eye No. 9, researcher Yota Yamamoto has already described the decline of labor unionization rates in recent years, and the accompanying disruption of traditional systems of collective labor relations. These are issues experienced by Germany and other countries around the world, and Japan can be no exception to this.

On this point, partly because the organizational basis for labor unions was traditionally fragile in France, the state has long been involved in creating systems for establishing norms in collective labor relations. The state has also been striving for policies to promote labor-management dialog through legal policies. Of course, there are numerous differences between the system of collective labor relations in France and that in Japan, in terms of historical backgrounds, the constitutional norms upon which they are premised, and the actual state of labor relations at present, and the difference between them should not be overlooked. It is also a fact, moreover, that there are fundamental problems in the appropriateness of state involvement in collective labor relations in itself, or even if such involvement were permitted, in what sort of range it would be permitted (see JILPT Research EYE "Collective Agreement Autonomy and the State").

Nevertheless, given that the traditional system of collective labor relations has been disrupted, when considering what can be done for legal policies to promote labor-management dialog and furthermore, to create the desirable form of collective labor relations, as well as considering what the associated problems will be, the French experience of legal policies on collective labor relations presents a number of learning points for Japan.