The 35-hour week
The notion that cutting working time could be an integral part of the fight against high unemployment has been a very controversial one, particularly in Europe. Yet, such was the main policy initiative of the French government in the employment field over the second half of the 1990s.
The enactment into law of the 35-hour week in 2000 was the outcome of a long process that gave rise to vigorous debates, notably between employer organisations, trade unions and the government. No other OECD country has opted to follow France down the road of legislating shorter working time as a weapon to increase employment and cut unemployment.
At the same time, the debate within France on the 35-hour week is not over. The legislation implementing the 35-hour week has been eased recently in several important respects, and a recent report by a commission of the French parliament has stirred up more controversy, with proposals to introduce still more flexibility in the law.
A reminder of the context and objectives is useful here. The genesis of the 35-hour week can be traced back to 1996, with a bill (the so-called loi de Robien) that offered large financial incentives for firms to create new jobs or preserve existing ones through work-sharing. The process was launched in a context of high and persistent joblessness, with the unemployment rate touching 12%. The main aim was therefore to increase employment, but improving working conditions and facilitating the reconciliation between work and family life were also highlighted as objectives.
The trigger for much controversy and debate came afterwards with the bill passed in 1998, the so-called first loi Aubry. It reduced the legal work week from 39 to 35 hours as from 1 January 2000, while leaving much of the details of implementation to be decided by collective bargaining between firms and unions. A second Aubry bill was passed in 2000. Most of the provisions of the new law were based on the negotiations held over the previous two years, introducing new guarantees for both companies and employees. In particular, it introduced greater options for working-time flexibility, tailored to the needs of firms.
Under the new law, in any given year, the average work week must be 35 hours, but firms can set high and low activity periods over the year, so long as this average is respected. Consequently, firms can adjust the work week to fluctuations in activity. The law introduced rebates on employers’ social security contributions, so long as there was a collective agreement on working time. Finally, the new law created a guarantee for employees earning the legal minimum wage, which was designed to prevent a fall in their real incomes as a result of shorter working hours.
Have these reforms led to a further fall in working hours? Already, for more than 30 years, most OECD countries had experienced a reduction in working hours, reflecting both an increase in productivity and the rise in the number of part-time jobs (many of which are linked to the higher number of women in the labour market). But France already stood out with a particularly sharp fall.
Today, annual hours worked per employee in France are 8% below the EU average, and among the lowest in the OECD area.
Today, annual hours worked per employee in France are 8% below the EU average, and among the lowest in the OECD area (see graphs). This gap widens to 17% when comparing France with Canada, and to 20% if compared with the US, Japan, Australia or New Zealand. A far cry from the 1970s when annual hours worked per employee were almost identical across the OECD area. France also recorded one of the steepest declines in annual hours worked over the past decade, mainly reflecting the impact of the 35-hour week.
If the recent trend in hours worked in France is somewhat exceptional, the measure which triggered it is equally so. In fact, while some other OECD countries have taken steps to cutting working time on an economy-wide basis, such as the Netherlands in the early 1980s and Germany in the second half of the 1980s, these initiatives have rarely been introduced officially, through legislation. They were, for the most part, the result of negotiations, on a case-by-case basis, between the social partners, without direct government intervention.
© OECD Observer, No.244, September 2004
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