Froggy

A new Labour Law

On 24^th March a policeman was filmed punching a schoolboy in the face during a demonstration against a proposed reform of the Labour Code.  Demonstrations in several French towns followed on from a million strong petition calling for the withdrawal of the proposals. The law was proposed by the minister for Labour and Social Dialogue, Myriam El Khomry and promptly renamed the El Connerie law [the stupid law].  It was rewritten mid March after protests and the new version is being discussed now.

The main aim of the law is to reduce workers rights and trade union power. This is done mainly by making company level agreements prime sector level agreements between unions and employers.  Up to now sector level agreements provided a minimum agreed across say all textiles firms; individual companies could negotiate company level agreements but these local agreements could not be less advantageous to the employees than the global ones.  Now a less advantageous agreement would prime over the minimum agreement previously agreed.

These are examples of less advantageous agreements that will become possible:

1. The weekly number of hours permissible in exceptional circumstances calculated over 12 weeks will be 46 (previously 44).
2. Overtime must be counted and paid no later than after 3 years (previously one year).
3. Dates of time off for holidays can be changed by the employer inside the month of start date (previously no change possible a month before the start date).
4. Compulsory dates for union/employer meetings: meetings must take place every 3 years (previously every year)
5. Employer can oppose publication of union/employer agreement (new)
6. If there is a change of agreement e.g. after a company has changed owners or combined with another, employees keep the same level of pay (previously they kept all advantages that had been negotiated).
7. Company level agreements are only valid if the union or unions signing it received 50% of the vote at the last works council or other elections. (previously 30%).
8. All employees had the right to a medical examination by the company doctor at the start of employment; now there will be ‘an information appointment’ not conducted by a doctor.

 

A Solution to Unemployment?

This law assumes that the cost of wages and social security contributions is what drags the economy down and causes unemployment. This is the daily message of the media: workers and employees are dragging us down with their excessive wages and conditions.  The solution is to reduce labour costs.  This is what 19^th century Manchester capitalists thought!

Is it still true?

How do other costs compare: rent, energy, cost of capital. Why are these costs not discussed?  They are not invariable.

Cheapness is not the key to commercial success. Having sector wide agreements forced firms to agree on wages and conditions, so they could not compete via lowering wages and conditions, but had to win on other factors, like quality, innovation, customer service etc.

Industry needs investment: too much money is handed now to shareholders and not enough to reinvestment. 50% of profits made by the Stock Exchange quoted firms in France are not reinvested.   Why are shareholders not accused of dragging the economy down?

Firms increase their profits by having the work done abroad: they close a firm that was not necessarily unprofitable in France and have the work done in other EU countries were workers are cheaper. This is not inevitable; it’s a choice, and the main choice that leads to mass unemployment.  Will the El Khomry law penalise employers who create unemployment on purpose, with the aim of maximising the amount given to shareholders?  Why are employers who delocalise jobs not accused of creating unemployment?

 

A case in England

An interview in the Evening Standard on 7 March discussed this very topic, with the title: ‘How much money do you need? Take less, do something better.” An entrepreneur in textiles Patrick Grant says:

“The reason the Cookson & Clegg factory was closing is a prime example of the shortcomings of austerity logic. The business was largely sustained by making army uniforms.  But back in 2009, central government tried to save a few million from the defence budget by procuring uniforms and equipment from overseas.  The consequence is that a whole series of factories have closed down, hundreds of people go on the dole and whole towns lose their purpose.”

“You come to realise how many political decisions take no account of the wider consequences.”

“ The source of pride in communities lay in their work. It was the factories that bound their society together.  When we lost those manufacturing jobs we replaced them with a welfare system that provided the basics of food, water, heat—but what it didn’t do was provide anything to support pride, values, emotional well-being.”

“I look at the way a lot of businesses are run and I think: that’s pure greed! Why did you shut that factory and move your production to China?  You live in a beautiful house and make a profit of 10 million per year.  How much money do you need?  Take less, do something better.”

“British fashion is littered with private equity buy-outs and management milking once loved brands.”

Patrick Grant is not anti-capitalist but he feels the British model suits profiteers: “We have a model of capitalism that’s largely based on shareholders removed form the communities that make the clothes. Their emotional investment is much smaller than, say in Germany, where you find workers represented at board level, and Italy, where there’s lot more family ownership and there is no way they would ever shift production from their hometown.”

He makes clothes in England, but his firm, he says, will never be a huge business.

A case in France

‘Merci Patron!’ [Thanks Boss] is a new film making a name for itself in France. It tells the true story of a couple made redundant by a Louis Vuitton firm in northern France; the couple got 40,000 euros compensation four years later, and more besides, thanks to a series of coups by the film maker, François Ruffin.  Le Monde’s review quoted Michael Moore, Frank Capra and other celebrities in the same breath as ‘Merci Patron’.

Along the way, we learn that a Kenzo suit, sold for 1000 euros, cost 90 euros to make in Poix du Nord; the profit margin being too small, the plant was delocated to Poland, leaving behind a mass of unemployed.

This is not inevitable, it’s a political decision, is Ruffin’s demonstration.

The poster for the film says: Thanks Boss! The Sting, Class Struggle Style.”