Macron’s labour reforms are a major test for France’s trade unions

President Macron’s extensive labour reforms are part of a programme of state-led liberalization which will shift the balance of power towards employers and test trade union strength and unity

Heather Connolly

It is difficult to overestimate the significance of the current labour reforms in France, for employers, workers and their representatives. The Government seems fully aware of the significance and the potential for extensive opposition and has chosen to push legislation through by decree, avoiding parliamentary debates and votes.

The proposed reforms are wide-ranging and include broader social reforms (in the area of unemployment insurance, pensions and training) to come in the following 12 months. The labour reforms have been a priority for the new President, Emmanuel Macron and go much further than the El Khomri law of 2016, that I discussed in an earlier blog. The most significant reforms for trade union practice are: the merging of representation structures from three statutory bodies representing workers to a single body; expanding the number of issues that can be agreed at company level and that supersede sectoral level agreements; and the ability of small companies to by-pass negotiating with trade unions or nominated representatives in favour of conducting a ballot of employees directly on a number of significant issues.

In terms of work, the reforms include changing  the nature of permanent contracts to introduce the non-permanent permanent contract, the CDI ‘de chantier’ or ‘de projet’, which allows employers to employ workers on permanent contracts (CDI) but only for the time needed to complete a particular project. The reforms also include changes to make it easier for employers to make workers redundant in the case of poor company performance at a national level (as it stands, companies find it difficult to make workers redundant if a multinational company is in profit at the multinational level), less constraints on employers wishing to make collective redundancies, and upper limits for pay outs from industrial tribunals.

All of this (and there is more), of course, works in the interest of employers (and the state), allowing them to budget more effectively for pay outs from industrial tribunals, for example, and use labour more flexibly by employing workers on ‘bogus’ permanent contracts and sacking workers with less constraint. There are measures which arguably work in favour of employees, such as the possibility to work more flexibly, from home for example (le télétravail) and having individual training accounts. However, much of the discourse around flexibility tends to blur the fact that overall there will be a fundamental shift in the balance of power from labour to capital and the measures will undoubtedly lead to increased economic insecurity for many employees.

France is often accused of failing to adapt to the realities of globalisation and to hampering job creation and growth by having such ‘rigid’ labour protections. The reforms of the labour code are intended to continue a process that has been taking place over the last few years of loosening up the labour market and reducing employee protection, with the intended outcome being the creation of new jobs. Job creation is held up as the answer for achieving economic growth, but with little attention paid to the types of jobs that will be created as a result of loosening up the labour market and the ((un)intended) social costs that creating more precarious jobs and with it greater economic insecurity has on society more widely. Flexible employment policies are often balanced in favour of employers and encourage a ‘disposable labour model’ which is heralded as the answer to solving productivity problems and economic growth.

As I argued in an earlier blog, French governments of various colours hold up the UK as an example of a flexible labour market model that France should seek to emulate. It is worth repeating that the UK is hardly a model that France would want to follow, considering the high levels of income inequality and the proliferation of precarious work in the form of zero-hours contracts, for example. Some argue that the reforms are designed to bring the French system closer to a Scandinavian-style ‘flexi-security’ model but from a close look at the reforms the changes are heavily weighted towards the flexibilisation of work, but without any additional securities for workers. The reforms increase the discretion of employers and are evidence of state-led liberalization of industrial relations in France.

There are of course social costs attached to high levels of unemployment and particularly for young workers who find it difficult to enter the core of permanent, protected workers. This is a problem in France, with a 9.6 per cent unemployment rate almost double that of the UK and Germany, and nearly 22 per cent youth unemployment. The question remains whether the answer is to increase economic insecurity and make everyone more precarious in the process of trying to solve the unemployment problem.

This blog draws on my British Academy funded research examining the possible futures of trade unions in Europe in the context of growing numbers joining the precarious workforce. Trade unions often struggle to access and represent precarious workers, and in countries where there are low levels of employment protection these workers are even more exposed and more likely to be outside regulated spaces.

So how have the French trade unions responded to the reforms? For a start the major confederations have not taken a unified stance in response, with the more radical trade unions (Confédération générale du travail – CGT and Solidaires) staging a number of strikes and demonstrations against the reforms. The more ‘reformist’, and largest trade union confederation in France, the Confédération française démocratique du travail (CFDT) hasn’t joined the strikes to date, which has made the trade unions look weaker and perhaps encouraged the Government to push through the reforms by decree. In fact, the CFDT has put in place training sessions for their activists on how to apply the reforms in the workplace, which sets out clearly its pragmatic response.

There have been three days of strike action since September and the number of strikers and demonstrators has dwindled with each action. Recently, however, the third largest confederation, Force Ouvrière (FO), joined the action alongside education trade unions and students that is planned for 16 November 2017. It remains to be seen whether a stronger and more unified response will emerge as the reforms become reality (some of which already have) and touch wider forms of social protection. Trade unions in France have traditionally been able to halt or amend reforms through mass mobilisation and protest including the watering down of the El Khomri laws in 2016.

The financial resources from union membership fees is low (membership levels are less than 10 per cent of the French workforce) and the changes being made to the workplace representation structure will impact the institutional resources of trade unions (in terms of the time paid for by employers to carry out representational duties). It is through representational structures that much of the class consciousness raising and identity work of trade unions is carried out.

If the trade unions are unable to amend or halt these reforms they will need to find renewed ways of demonstrating their relevance and maintaining a multi-level power base in French society.

This post was originally blogged by SPERI on the 13th November 2017.

Heather Connolly is Associate Professor of Employment Relations at the University of Leicester, and co-founder of CERCnet. This blog was written as part of her British Academy mid-career fellowship ”Trade Union Futures: Representing Precarious Workers in Europe’.

Is skills development the answer to economic and social upgradation in the Global South? Some reflections on evidence from India

Anita Hammer

Skills are considered the answer to economic development and reduction in inequality in industrialised as well as industrialising societies. Not surprisingly, skill development has attracted considerable attention from policy makers in India, e.g. the formation of the National Skill Development Council to coordinate skill development and various public-private partnership initiatives on skill formation. The policy changes in India, evident in the National Skill Development Policy 2009, are in line with strategies elsewhere: skill formation and upgrading has assumed a critical role with increased global competition, either as a means to retain competitive advantage by industrialised economies or to upgrade by emerging economies.

 

India has witnessed an impressive increase in GDP growth over the last two decades. At the same time, it is undergoing a demographic shift i.e. an increase in the share of working-age population in total population. With a working age labour force of 431 million (those aged between 15 and 59 years) in the total labour force of 470 million (NSSO 2009-10), the challenge is employment creation and skills upgrading of the existing as well as growing workforce. The National Skill Development Policy 2009 set a target of 500 million to be skilled by 2022, with the Twelfth Plan (2012-17) target of skilling at least 50 million people by 2016-17. Indeed the fear is that if the skills challenge is not met within the next decade, India may not be able to sustain growth and it may leave large numbers among the increasingly youthful labour force unemployed with all its attendant negative implications for equality and social cohesion (Mehrotra et al. 2013). The key question is: can India remain competitive through its existing patterns of skill formation?

 

The role of skills is particularly emphasised in new industrial regions that are developing in order to attract industry, especially multinational firms. Specifically inserted into global production networks, such regions are often associated with skill development and/or overflow. In policy literature, this has been examined through the concept of skill ecosystems (Finegold 1999) that rests on a certain balance of power between firms, the state, and skilling institutions. My research conducted in the manufacturing firms of one such region in North India during 2014-15 reveals there are considerable institutional barriers to the emergence of a skills ecosystem. Trade unions are excluded from skilling decisions and institutions, and labour is not an actor in a context where post-independence compromise meant that the state represents the interests of labour. For unions, their exclusion takes skills out of their bargaining portfolio further weakening their position.

 

One-sided supply side skilling strategies persist in firms that reinforce the institutional fragmentation within the Indian skilling system as well as the considerable unequal power relations in the labour market. On the one hand, the system of skilling institutions is fragmented between public and private institutions, between centrally certified providers and others that go considerably beyond this and are oriented at the German system. On the other, when it comes to the demand for labour, recruitment decisions always have to be considered against strategies of in-house production vs. outsourcing. Inevitably, long supply chains in the textile and automotive industry draw on the informal economy which, to a large extent, is based on informal skilling practices. Informal workers are /remain weak in the absence of a clear employment contracts, and with limited union coverage and social security.  Because of their weak labour market position, even skilled informal workers cannot bargain for much. These factors combine to entrench disincentives by firms to train or to involve labour in skilling decisions. Only 17% of firms provide training in India. The political economy encourages outsourcing, and thereby further undermines any requirement to engage in skilling.

 

In conclusion, while the government has put forward an integrated and holistic policy, underpinned by the insight of the skills ecosystems literature, the new policy faces severe challenges in a context of fragmented institutional skilling structure and unequal capital and labour relations both nationally and in the region. With over 93% of workers as informal, power relations are skewed in favour of employers. The imbalances between capital and labour do not provide any collective constraints or offer firms any incentives to develop work organisations that require skilling in a coordinated institutional environment. Firms draw their competitive advantage from recruiting from and outsourcing to the informal economy. This is unsustainable in a globalizing world where other destinations may provide the cost advantage to capital that India currently does. No matter how comprehensive a policy, it is unlikely to succeed unless unequal power relations in the labour market are addressed.

 

Informal Economy/ Informal Work: Challenges for Industrial Relations

Anita Hammer

Industrial relations has predominantly focussed on the formal workplace and formal institutions of representation and neglected the informal economy/work. Informal work, instead of being a transitory phenomenon, has been a predominant form of work in the Global South and is increasingly prevalent in the Global North (Chang 2013; Kalleberg 2009). As work continues to reach beyond the formal workplace and into the informal economy – into the community, household and the realm of social reproduction – institutional forms of industrial relations face a challenge. While Organising and Social Movement literatures address this challenge, conceptual and methodological issues remain underexplored in industrial relations.

 

Initially conceptualised as the ‘informal sector’ (Hart 1973), since the 1990s the term ‘informal economy’ has focussed attention on a broad and heterogeneous type of employment and enterprises that are unregulated and unprotected (Portesand Castells 1989; Hussmans 2005; Agarwala 2009). The expanded definition of the informal economy sees it as segmented into a range of informal firms and employment relationships i.e. self-employed with assets and employees, survival self-employed (own account operators and unpaid family labour), wage labour, casual wage labour, domestic labour and industrial outworkers/homeworkers. As Breman (2013) puts it ‘there is not one but a variety of regimes of informal labour, not all vicious to the same extent. These also differ in coping behaviour and resilience, some segments being more successful than others’. In sum, informality has multiple levels of exploitation as well as of forms and avenues of resistance.

 

Accompanying this recognition of the permanence of the informal economy is also one that recognises its significance to capitalist development. The relationship between the formal and informal economy is seen as a continuum of economic relations of production, distribution and employment where firms and workers move along the continuum or can operate simultaneously in both (Chen 2007; Lerche 2010; Harriss-White 2010).There is a recognition of diverse socio-economic relations that can result from the interaction of the formal and informal economy.  Agarwala(2008) captures this in her relational understanding of the informal economy where informal workers are intertwined with the formal economy, society and the state through structures, networks and political institutions. Informality is now fused within formerly formal parts of the economy, through outsourcing and supply chains.

 

My research in a new industrialising region in North India shows how manufacturing firms, domestic as well as multinational, tap into and structure the informal economy. Over a span of ten years they have reduced their permanent workforce while employing three times the number of informal workers. These are segmented into contract, casual, company casual and apprentice workers and often fulfil the jobs of a full-time production worker inside the firm. In addition, firms draw upon informal workers through outsourcing and long supply chains both in the textile and the automotive sector. As in earlier industrial sociology, neighbourhood comes into the firm and the firm reaches into the neighbourhood. This blurs the boundaries between the spheres of production and reproduction when analysing control and contest. Trade unions are unable to respond to the needs of informal workers or formulate a strategy to counter the state-capital restructuring of work.

 

For industrial relations, the challenge is how to conceptualise these interlinkages between the formal-informal work/economy and how to organise disparate, dispersed and often mobile informal workplaces and workers. This requires a rethink of definitions and conceptualisation of labour, framing options, organisational forms and strategies, and types of struggles for labour in spheres of production as well as reproduction. ‘New’ questions, with long history, have arisen. Is labour a mere production input or ‘social’ labour? Is work only in the sphere of production or is it all the work that helps in capitalist accumulation? Do we need to conceptualise labour as an actor, or only as collective actor? Can, or indeed should, the informal be ‘formalised’? Why is informal economy/work so difficult to regulate? What role do inter-firm relations play in informality? Do we need to go beyond institutional forms of industrial relations? What are the methodological challenges in researching the informal economy/work?

 

One of the many ways forward is Bernstein’s (2007) ‘classes of labour’. The approach provides an analytical framework that is flexible enough to capture the diversity of employment in formal-informal economy. Another possibility is the integrated framework of social reproduction (Luxton 2006; Ferguson and McNally 2015) that captures social relations of capitalism more comprehensively. Such approaches are sensitive to varied economic survival strategies of different groups of informal workers and the diverse means of resistance.

 

A more differentiated understanding of work and labour, and links between oppression and exploitation and production and consumption may help in framing strategies to address the challenges informal economy/work poses to industrial relations and to the labour movement.