European Trade Union Institute, ETUI.

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3 March 2017

France: the social partners begin negotiations on unemployment benefit

After an initial failure in June 2016, the social partners at national and interbranch level reopened, on 15 February 2017, the negotiations to reach a new agreement on unemployment benefit. At the heart of the discussions lies the issue of taxation of fixed term contracts.

Unemployment benefit, like supplementary pension schemes, is one of the few aspects of social protection that is entirely managed by the social partners at interbranch level, via a national collective agreement that is renegotiated every three years. The previous agreement, which expired at the start of 2016, was extended by the government for one year as the social partners were unable to reach agreement. After several analysis meetings, they eventually decided to reopen the negotiations in the hope of reaching an agreement by the end of March, before the second round of the presidential election in May.

Faced with the threat of the State taking unemployment benefit back into its own hands, as mentioned in the programmes of several presidential candidates, the main challenge is to demonstrate that the social partners are capable of running the scheme on a parity basis. Because of the persistent mass unemployment, the scheme currently has a deficit of EUR 4 billion and debt of EUR 30 billion.

The task of the employers’ negotiator is to prevent any increase in the cost of labour, which means no increase in unemployment insurance contributions for short contracts. So why did the negotiations in June fail? The trade unions’ negotiators wanted to put an end to job instability. The number of fixed term contracts increased from 1.6 million per quarter in 2000 to almost 3.9 million per quarter at the start of 2016. FO is proposing a bonus/penalty system to adapt contributions to the level of use of these contracts. CFDT is suggesting a gradual contribution scale depending on the duration of the contracts. A compromise could mean adopting a sectoral approach, targeting the industries that make most use of fixed term contracts.

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