Saturday, May 1, 2010


The Law On Social Democracy: Is This The End of A French Paradox? 

By Roselyn S. Sands and Laurent-Paul Tour
Ernst & Young

Company-wide collective bargaining agreements (CBAs) are a fundamental source of employees’ rights in France. Their provisions often apply to all employees, whether unionized or not, and to all employees within an industry whether signatory to the CBA or not.

Since World War II and prior to the enactment of the Social Democracy law in August 2008, five unions benefited from an irrebuttable presumption of representation of the workers; other unions had to prove their representation.

Thus the well-known “French paradox”: while union membership in France is one of the lowest in the European Union (around 8% of workers), 95% of French companies are covered by a CBA. Thus, despite low union membership, unions remain a key player in the workforce and in any business transformation or redundancy.

The 2008 law now abolishes this irrebuttable presumption. From now on, unions must prove that they represent workers according to seven criteria defined by the law, including, among others, their score at the last works council’s elections, their independence, and the number of members.

In addition, a company-wide CBA will be enforceable only if signed by unions having obtained at least 30% of the vote at the last works council’s elections (without the opposition of unions representing 50% of such vote).

This reform is too recent to know its consequences on industrial relations. Will the necessity to establish representation weaken unions and thus, give employers an upper hand in collective bargaining in the future, or will it have the opposite effect: encourage employees to join unions, create more competition among unions, and thus strengthen the overall power of unions in France? Only the future will tell.