Austerity and social dialogue France

1. Austerity and social dialogue France London meeting September 2012 Gilles Jeannot Ecole des ponts

2. French civil service • French civil service was organised in 1983 into three parts, State, local government, hospital.(5,3 millions) • State civil service (2,4 millions) (50 % executives, managers “catégorie A”) • Local government (1,8 million) (76%, workers “catégorie C”). • Hospitals (1,1 million) • Civil servants are mainly on tenure (status)

3. Social dialogue • National dialogue on wages • Global adjustment to inflation “point” : open to media • Salary grid by corps : specialized • Bonus : secret • National dialogue on rules (conseils supérieurs de la fonction publique) • Dialogue on personal questions (carrier, mobility) is more active than dialogue on organisation (health, reorganisations). • Trade union competition (tension between corporatists and non corporatists unions).

4. Trade unions • 15 % membership ; 70 % participation elections basis for official representation • CGT (23,5 %) especially strong among workers in municipalities, ex “communist” union, now open to negotiation • Force ouvrière (17,6 %) corporatist, now confrontational • Cfdt (16,8 %) non corporatist, open to negotiation • FSU (11,%) very strong among teachers • SUD (9,6 %) extreme left, confrontational

5. Social dialogue reform (2010) • New trade union representation rules (all trade unions equal, elections held during one day only) • A joint statement is recognised only if signed by unions representing 50 % of the voters and then government is considered bound to the signed agreement. • Less formalism • More importance put on organisation (health, reorganisation) (basis for representation)

6. National austerity measureswages • “point” has grown up 2,8% for 2008-2011 for a 4,4% inflation. • Specific compensation against loss : 56 000 public servants received on average 800 euros • Half of the gain from staff reduction redistributed (salary grids, overtime) • Global salary : plus 2,9 % in 2009-2010. • Bonus salary based on job level and efficiency

7. National austerity measures : staff reduction • Non replacement of one out of two people retiring • - 75 000 in 2008 – 45 000 in 2009 for State administration • Simultaneously local government and hospital staff growth

8. Source : rapport annuel de la fonction publique 2010-2011 , p. 302.

9. National social dialogue and austerity • The national dialogue on inflation adjustment “point” has been cut compensated bya technical discussion on salary grids • No discussion at all on large reorganisations (revision générale des politiques publiques) on a national level and limited scope for local discussions

10. Local government public service • Created in 1983, tension between an integrated model (communists) and a decentralised model (Deferre Marseille’s Mayor)… in fact real autonomy. • On a national level general rules are designed for state civil service and then adapted for local government • On a national level it is difficult to find local employer representatives (mayor associations or superior council representatives ?) • On a local level, tension between the mayor, the staff directorate, and deputy mayors

11. Local government austerity ? • No staff reduction during the last years • But budget freeze in 2010 • Reduction project after ? • Some specific austerity measure (case studies)

12. Case study : Saint EtienneFinancial situation • Industrial city close to Lyon in decline (population declined 240 000 -> 175 000) • The biggest debt per habitant among French cities (2158 euros in front of Marseille and Lille). • Junk loans 150 millions loss for a 350 millions annual budget

13. Saint Etienne • 2008 new mayor (socialist) and austerity plan • + 9,5% on local taxes • Investment limitation • 1% maxi payroll growth with a “shift-age-technical skills” of 3%) • Limited staff reduction (100). • Reorganisation • Power concentration • Rationalisation of street level organisations (swimming pools, street cleaning, police, …)

14. Saint Etienne : social dialogue • Formalised social dialogue procedures mixing direct and indirect dialogue • Special attention to psychological risks • Real dialogue and conflict on street level reorganisations • Unease among medium managers • Balanced impression : real confrontation but dissatisfaction

15. Case study : Saint ouen • A city in the neighbourhood of Paris with social difficulties (drug traffic…) • … and economic opportunities (in transition from industrial to tertiary ; population growth / new 10 000 inhabitants building program) • Regional audit commission accused the city of spending too much (too many municipal staff per habitant). • Limited actions to contain cost expenses (discussion before staff replacement, action against absenteeism, ) 2% annual payroll growth for 2010 and 2011 against 4 % before.

16. Saint Ouen: social dialogue • A mixture of public debate with the population and social dialogue • 100 commitmentsto the population • 21 decisions discussed with staff (indirect participation) • Specific monitoring comities • Vivid local comities on reorganisations (active negotiation on street cleaning with financial compensations for schedule modifications) • Alert system : after a difficult conflict in school cleaning and cafeteria, every time a trade union sees a strong social problem, it has the right to a meeting with staff directorate within two days (often one trade union and often for individual problems).

17. Case study conclusion • Modernisation continues • Professional concentration of power against deputy mayors local influence • End of customary rules • Customer oriented organisations • Formalised form of social dialogue (in these cities ?) but conflict culture. • Best practices : mixture between indirect and direct participation (Saint Etienne), mixture between habitant participation and social dialogue (Saint Ouen).

18. General conclusion • Drastic measures have been taken just before 2008 encourages New public management alignment more than austerity measures for state administration • Austerity is only at the beginning for local government • Austerity measures and reengineering in state administration have not been discussed. This contrasts with the new rules set to give more legitimacy to social dialogue (2010 law) • Social dialogue in municipalities (even if sometimes open to conflict) seems more vivid.

19. And now ? • Government change in 2012 • Creation of 60 000 jobs in schools but no public service growth • Very limited growth on minimum salary and on “point” • Undefined attitude towards local government expenses (political weight of socialist Senate)