FRANCE NOW 

French News in English 

Published by France Now Association
 

Editor: Arvind Ashta

Editorial Committee:

W. W. Strangmeyer,

Emmanuelle Ashta

Copyright

 

FRANCE NOW

French News in English

May 2000, Monthly, Issue No. 37, 50 Francs











Measures to boost employment and productivity

Different schemes to help you save on labour cost and to provide training

The French employment security system is far more elaborate than it appears at first sight. It is not just a system of providing an unemployment dole to those who cannot find employment. It is also a system of subsidies to ensure that employers do employ those whose marginal productivity is not as high as the French minimum wage, but is nevertheless greater than the employer's marginal cost. For this, there is either a need to reduce the marginal cost to employers or to increase the marginal productivity of certain unemployed. Employment Subsidies are provided to achieve the former, and Subsidised Training is provided to achieve the latter. About 900,000 contracts for subsidies are signed every year. According to the Ministry of Employment and Solidarity, about 1.5 million of the 13.8 million employed in the non-farm private sector benefit from some form of employment aid. In 1998, 34% of enterprises used the Adaptation Contracts, 23% used Apprentices and 17% used Qualification Contracts.

Some of the schemes for boosting employment are indicated in the table below.

Scheme Benefits Help Remark
Exoneration of social security in urban and rural revitalisation zones. To help develop these zones, help is given to recruit people working there. Exoneration of employers' social security contributions, welfare and work-accident insurances associated with a salary up to 1.5 times the SMIC, for one year. Recruit for at least a year.
Area Development

Exoneration of social security in Tax-Free Urban Zones.

To help these underdeveloped zones. Exoneration of employers' social security, welfare and work-accident insurances contributions associated with a salary up to 1.5 times the SMIC, for one year. Recruit for at least a year.
Hiring the first employee Encourage people to hire others. Exoneration of the employers' social security contribution (up to the SMIC). 24 months for a permanent employment, 18 months for a fixed term contract
Aid to shift to part-time work To avoid dismissing people for economic reasons, the employer shifts them to part-time work. The employer provides a supplement to the employee for shifting to part-time work. The State finances 20% to 80% of this supplement.
Reduction of social security charges on low salaries To encourage use of unskilled persons, earning less than 180% of SMIC. A regressive reduction of employers' social security contributions. Now reserved for those who have adopted a 35-hour week.
Contract for a mixed employment policy Employment of women The State provides subsidies for modifying equipment, training and the salary during the training period.
Consolidated Employment Contract Those having difficulty in finding a job* Unemployed for more than a year* Older than 50 years*Younger than25 years*Handicapped Help is provided to the employee to construct his goals and projects. He can work for at least 30 hours a week on up to five consecutive one-year contracts or on a permanent contract. Limited to Localities, public bodies, non profit associations. The State and the private sector are excluded.
Solidarity Employment Contracts People facing difficulties in finding employment *18 to 25 year olds*Over 50 years*Long term unemployed*Those on minimum social welfare. 20 to 35 hours per week of work, paid at the SMIC, for a duration of 3 to 12 months. Those on the ASS can accumulate their dole with the remuneration of the contract. The employers get a subsidy from the State for the salary and for the training provided. Limited to Localities, public bodies, non profit associations. The State and the private sector are excluded
Employment Initiative Contract People facing difficulties in finding employment

*16 to 25 year olds. *Over 50 years old *Long-term unemployed. *Disabled people less than 30 years old.

The employee can get training of 200 to 400 hours. Subsidy of FF 1000 or FF 2000 per month. Exoneration of some social security charges for the employer for employing those over 50 year olds Permanent of Fixed period contracts of 12 to 24 months for at least 16 hours per week


Qualification Contract
People facing difficulties in finding employment *Youth less than 26 years not having worked before. *Those over 26 years *Those unemployed for over a year Salary is 30% to 75% of SMIC, depending on age of the employee. The employer may also be waived social security charges and be reimbursed part of the training. Subsidy of FF 5000 or FF 7000 if employee has CAP or BEP (diplomas) 6 to 24 months contract, renewable once. The employee is to be provided training for 25% of the time.
Insertion of disabled workers To help the disabled to find work. The employer is provided a bonus of FF 15,000. The employee has to be recruited for at least one year.
Aid for Disabled Workers Disabled workers Financing all or part of the additional equipment necessitated by the handicap of the employee
Adaptation Contract Young people less than 26 years. To get on-the-job-training. 200 hours of training is provided to the young person, paid by the State. The employer has to pay only 80% of the conventional wage. Contract of 6 to 12 months, renewable once.
Apprenticeship Young people less than 25 years. The employer pays 25% to 78% of the SMIC, depending on the age. There is a waiver of employers' and employees' charges : the extent (all charges or only social security) depends on number of employees: up to 10 or more than 10) The employer has to train the employee for at least 400 hours per year.
Orientation Contract 16 to 25 year olds, without any qualifications are provided training and a job to orient them. The employer pays 30% to 65% of SMIC depending on age of employee. He may also be exempted from social security and welfare charges and be reimbursed for the training. Maximum of 6 or 9 months, depending on the age.
Youth Employment contracts *18 to 25 year olds.

*26-30 years olds if they are not entitled to unemployment benefits.

*Disabled people less than 30 years old.

The State provides a subsidy to the employer of FF 93,840 for a full-time job. Public sector organisations and associations enter into 60 months contracts with young people, with a trial period of a month or two. Options exist for terminating the contract at the end of each year.
The Employment Replacement Allowance : ARPE Helps people take early retirement (before the age of sixty) and the enterprise to replace them with young people The retiring employee is provided 65% of his salary till the age of 65. The employer has to replace the retiring employee with a young person
The special allowance convention of the FNE-Premature retirement or Discharge Over 57 year old, having worked for at least a year in the enterprise...and many other conditions The employee gets a preretirement salary of 65% of his last salary till the age of 65.
Progressive early retirement agreement For people 55-65 years, it helps them accept half-time work. The employer has to recruit unemployed people.
Reclassification Cells Convention For enterprises wishing to participate in the reclassification training of their ex-employees dismissed for economic difficulties. All employees 3-12 months.
Adaptation training Convention People who may get dismissed if they don't get reclassification training: either on-the-job (adaptation) or outside (training). The State finances training initiatives of more than 120 hours outside the enterprise: a part of the training cost and the salary of the employees during the absence The employer has to keep the employee for at least a year thereafter.
Training to get into an enterprise To allow the unemployed to access the job and to make-up deficiencies between training and requirements. The employees are free for the employer as they are considered to be under training and are paid an allowance either by ASSEDIC or by the State. 40 to 750 hours of training.
Collective training for insertion and Accession to Employment To help people having difficulty in finding work. The job-seeker has to be at least 26 years old and unemployed for at least 12 of the previous 18 months. 40 to 1200 hours of training.
Individual Training for insertion and Accession to Employment. Individual training to help people having difficulty in finding work The Unemployment agency helps you find the right training adapted to your needs. 40 to 430 hours of training.












Law to limit accumulation of political mandates

- A pay-hike for salaries of most French Members of Parliament (MP)

Politics is also a source of employment. French efforts to boost employment are therefore examining this field too. There are over 500,000 political elective posts, although many of these posts are in small villages and are merely nominative and do not constitute real employment. However, the same person may hold many important posts, further accentuating the unemployment of some and increased wealth of others. One estimate of multiple mandates puts the figure at 9,000 cases.

The table below gives an idea of the situation concerning French MPs.

  DÉPUTES SÉNATEURS






Total 575 * 100 % 319  ** 100 %
Municipal Councilor 474 82 % 217 68 %
Mayor 318 55 % 149 47 %
General Councilor 205 36 % 139 44 %
President of the General Council 15 3 % 35 11 %
Regional Councilor 63 11 % 23 7 %
President of the Regional Council 14 2 % 4 1 %
Member of European Parliament 2 - 0 -






* Situation on 28 April 1998, 2 seats vacant

** Situation on 19 may 1998, 2 seats vacant.

Source: Report 909 to the National Assembly.

More that half of French MPs are mayors. While only a small percentage occupy other executive positions (President), three-fourths are councilors in municipalities. Only 13% hold no other post. For deputies (lower-house), 10% held no other mandate, 52% held one mandate, 38% held two mandates. A negligible percentage (only three persons) had three mandates. The situation is the same for Presidents of Regional Councils. There are only a few who hold no other local mandate.

In other advanced democracies, this phenomenon is not so marked. Some legally prohibit the accumulation of some political mandates. This legal prohibition may be contained in the Constitution (Belgium, Spain and Italy) or may be imposed by a law (Greece, Portugal). In others, it is the custom that ensures that a few greedy politicians don't try to stick their fingers in every pie. In Sweden, Finland, Denmark, Ireland, the UK, the USA and Germany, there is no legal prohibition, but few politicians accumulate different functions (80 out of the 659 English MPS had another local mandate, similar situations prevail in Spain and Italy). In the USA, the practice of checking conflict of interest before validating a Congressman's election, and State laws prohibiting local mandates to American Congressmen, ensure the same result. In Germany, some Länder prohibit local mandates to EU MPs. But usually, it is the ceiling on or suppression of the local remuneration, in case of multiple mandates, that serves as a severe disincentive to cumulating mandates in England and Germany. This remuneration sanction is also found to apply to Spanish Senators who are not affected by the Constitutional prohibition.

The most important reason for the high accumulation of political mandates in France, increasing drastically during the 5th Republic (1958 onwards), is the extremely centralised nature of French politics and administration. This means that local politicians are more effective if they are present in the Assembly or in the Senate, even as opposition members. This is a vicious circle because with the accumulation of mandates, the decentralisation project loses effectiveness.

Another reason is that the French political parties have grouped around notable personalities, rather than having a strong citizen base. Just as recent illustrations, take Chevènement or Pasqua, who have been able to sustain parties due to their individual importance. As a result, the parties have not been strong enough to refuse the notables the right to all they want to acquire.

To these two reasons can be added the mode of elections to the French Parliament based on individual majority scrutiny for each arrondissement. This system favours the creation of individual celebrities. To have a good return on the party's investment, it is obvious that the party would like to run the "built-up" contestants in many races. And it is not possible to avoid this individual scrutiny system, because it is the price one has to pay so that the central parties can keep the extremists (especially nationalists) out of Parliament, and out of any real influence.

Yet another reason is that with the power of the executive government, the MPs of the majority feel that they have no real say once the government has been designated. Their vote is taken for granted on party lines. The opposition MPs know they can't defeat a motion. So, why come to Parliament, where they don't have any real power? The same individuals therefore derive far more satisfaction from their local mandates and are reluctant to lose them.

Since the mandate of mayor is either unpaid or pays very little, this local official needs another activity to support him. To take advantage of synergy in his investment, it is obvious that he stand for election at other levels too. Besides which, by spreading his eggs, if he is defeated in one arena, he has a safety-net to fall back upon.

For some time now, French political scientists have been questioning the wisdom of having a few all-powerful politicians. The problems created are many.

Effectively, the interests of a region and that of a nation may clash. What is good for Brittany may not be good for France as a whole. What is good for Europe may not necessarily be the best situation for France. The clash of interests is often avoided in federal countries where the competencies of the different levels are clearly indicated, but in unitary States like France, to avoid conflicts of interest, it is necessary that a person represent just one region. At least, a representative to French Parliament should not represent other major regions. This is especially true if the system of public finance and equalisation payments is to be made more objective.

Another defect is the erosion of the balance of power between the different functions. In the French administrative system, there is a State (Executive) control of the local elected representatives through the Prefects. But if the local elected representative is also in the national government or Parliament, he assumes more importance than the local Prefect.

Besides the clash of interests, the work of a Parliamentary representative is considered onerous enough to be a full-time occupation, and is well paid. As a result, MPs should not be squandering their energies or time on other activities. What is happening at present is that the MPs are so busy regulating one of their many interests, that the debates in the Parliament are held before an empty audience.

Moreover, instead of a few people hogging all the positions, others must be given a chance. Besides stimulating new blood and new ideas, this would help to reduce the unemployment of those wanting a political career and help to end the oligarchic control of a few. The latter has also led to an alienation of the general public towards the clique of a few politicians, manifested by the drop in voter turn-out in elections, and laying the base for the Nationalist accusation that the more central parties in government and opposition are all a gang of ENArchs (from the Ecole Nationale d'Administration), colluding together to keep power in the hands of a few. The accumulation of political mandates is therefore seen as fodder for the populist National Front.

Since the elected representative, and especially the elected local executive don't have the time to carry out their responsibilities, they delegate enormously to their bureaucrats. All this has led to the technocrats slowly replacing the elected representative in terms of prestige, speech and power. If perpetuated, slowly, the perceived need for the elected politician will also be less. Too many mandates kill the mandate!

Since 1985, a mandate to the French Parliament is inconsistent with more than one of the following functions: representative to the European Parliament, regional councilor (or to Corsica), general councilor (department, or of Paris), Mayor of a commune of more than 20,000 inhabitants or adjoint to a mayor of a commune with more than 100,000 inhabitants. This means that a French Member of Parliament (MP) could represent only one other major geographical region.

The laws of 1985 were a first step in limiting the extent of accumulation by each person. However, as we have seen, most politicians have still managed to accumulate what they could. In fact, it is estimated that merely 300 positions were released owing to this law. Also, there was no clarity why certain things were prohibited and not others. For example, why an MP should be allowed to be a Mayor of a city of less than 20,000 inhabitants. Why should the position of regional councilor be considered to clash with that of department councilor but not with municipal councilor or Mayor?

What was proposed last year is that a French MP should not be a representative to the EU parliament, and in the regional and departmental assemblies, he should not be the executive CEO. The bill therefore proposed that the French MP could neither be President of the Regional Council (including Corsica) or of the General Council nor a Mayor. However, after all the discussions in the two houses, the law that was finally passed only retained the exclusion to the EU Parliament. This means that French MPs can continue to be Mayors. This is why Jack Lang, the new Minister for Education, is trying to retain his position as Mayor of Blois.

But even elected non-executive positions were brought down to the limit of one other position. So, as far as being a member of local Councils (Conseiller Regional or Conseiller Général or Conseiller Municipal) is considered, one membership would be permitted, as at present. All references to population size were taken out in the initial proposal, but finally municipalities with a population of less than 3,500 inhabitants were excluded. This means that a French MP can have three mandates if one of them is Municipal Councilor to a city with less than 3500 inhabitants.

A French MP who is elected to the European Parliament would have to resign from the French seat. This would discourage the practice of using famous French politicians to head the EU election lists, where, once the election is over, the leaders resign from the EU parliament and let others take the place. Now, the French MP would be warned that he would lose his seat in the French Parliament if he obtains a seat in the EU Parliament. In the case of a person becoming a MP, if he already has two other local mandates, he would have to abandon one explicitly, failing which the most recent mandate would lapse.

What is shocking is that the legislation was supposed to raise the pay of Mayors so that there would be no need for people to be MPs and Mayors. This would then help digest the proposed simultaneous abolition of accumulating the local executive position with a highly paid position of national MP. However, the Parliament, specifically the Senate which has a veto power over organic laws, insisted on letting the MP keep one additional position. At the same time it voted in the pay increase. What this means is that the MPs have given themselves a nice pay-hike, because half of them are Mayors, and most of the others have at least one executive position. A French MP has a basic salary of FF 30616 (1994 figures).

The following table indicates the increase in the salaries of Mayors:

Population 1996:

Max rate

1996:

Gross salary

Since 2000 law

Max rate

Since 2000

Gross salary

< 500 12 2 512 F 17 3755
500 to 999 17 3 755 F 31 6847
1000 to 3499 31 6 847 F 43 9498
3500 to 9999 43 9 498 F 55 12149
10,000 to 19,999 55 12 149 F 65 14358
20,000 to 49,999 65 14 358 F 90 19880
50 000 to 99,999 75 16 567 F 110 24298
100,000 to 200,000 90 19 880 F 145 32029
> 200 000 95 20 984 F 145 32029
Paris-Marseille-Lyon 115 25 100 F 15% higher, 166.75 36833






Source for columns two and three: in J.F. Lachaume, L'administration communale, 2ème ed. LGDJ, 1997.

Column 4 from the new law, Column 5 assumes same base of FF 22089: this would have gone up.

Reference: HYPERLINK "http://www.ac-montpellier.fr/crdp/"

This advantage, contained in the organic law, concerns only French MPs. In the ordinary law, which the French MPs pass, but which governs the situation of all others (European MPs, local representatives and local executives), the French Parliament has retained the distinction between functions and mandates. As a result, a European deputy cannot be Mayor or President of a Regional or General Council, and therefore cannot have two remunerations! Similarly, two local executive positions are incompatible. A French MP can therefore have three mandates (one being that of a mayor of a small town), but only two executive functions.

In short, through a complicated piece of legal jugglery, and after months of political acting and debates, the French MPs have not only voted in a pay-hike for themselves, they have excluded all others from this pay-hike. Admittedly, those who are elected to just one function, the Mayors, benefit also.

According to Bernard Roman, the reporter to the Assembly National for these two laws, this fait accompli is the result of certain legal procedures. Since the Senate did not pronounce on the Second Law (the ordinary law), the Assembly had to vote it in just as it had in the previous version, although the Senate had modified the first law (the organic law)! But there was a choice! The government could have dropped both the laws and then restarted the whole procedure, not being sure of an outcome with a mischievous opposition in the Senate. Nevertheless, the result of all this impotence is that MPs gain, instead of sacrificing.



References:

1. Bernard Roman: Reports to the National Assembly No.909, No.2134 and No. 2234

2. www.ac-montpellier.fr/crdp/dda1.html