"MINIMUM SERVICE" LABOR REFORM BILL CHALLENGES FRANCE'S

UNCLAS SECTION 01 OF 02 PARIS 003251 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON EIND EINV ETRD ELAB PGOV FR SUBJECT: "MINIMUM SERVICE" LABOR REFORM BILL CHALLENGES FRANCE'S POWERFUL PUBLIC SECTOR UNIONS REF: (A) EMBASSY PARIS DAILY SIPERNET REPORT FOR JULY 30; (B) EMBASSY PARIS DAILY SIPERNET REPORT FOR JULY 31; (C) EMBASSY PARIS DAILY SIPERNET REPORT FOR AUGUST 1 NOT FOR INTERNET DISTRIBUTION Summary -------------- ¶1. (SBU) A bill to be adopted by Parliament at the end of this summer's extraordinary session requires public transport providers to maintain minimum service during strikes -- a key campaign promise by President Nicolas Sarkozy (ref A). Regarded as the most symbolic of Sarkozy's social reforms, this bill, which should become law on January 1, 2008, will strip the unions of their strongest weapon against public sector reform, potentially paving the way for other major changes in the French labor market and the role of labor organizations. The labor unions' retaliatory action on July 31 (ref B),and their threat to disrupt the rugby World Cup this fall, signals union determination to push back against the challenge to their power this bill represents. End Summary. What's in the bill -------------- ¶2. (U) The four main requirements of the draft bill on "social dialogue and continuity of public service in public transportation" are: 1) that individual workers declare their intention to strike two days in advance or be subject to disciplinary action; 2) that unions notify the company in advance of any plan to issue a notification of strike action, but only after the failure of negotiations; 3) that workers not receive pay for strike days; 4) that the employer or the union call a meeting to vote by secret ballot -- rather than a show of hands -- on whether strike action should continue after a week. ¶3. (U) The bill applies to transportation services defined by the government as "any company or government organization entrusted with a mission of public service for the regular transport of passengers who are not tourists." Air and maritime transport are currently excluded. However, the draft bill does not provide any minimum service requirements, and it is up to individual companies to create a contingency plan for minimum service by the end of the year. The draft bill will be adopted by August 3, which marks the end of this summer's extraordinary session of the legislature. SNCF's reaction -------------- ¶4. (U) The head of the national rail company SNCF, Anne-Marie Idrac, said that the legislation would be a "culture shock" for the organisation. Notwithstanding the government's determination and rail workers unions' threatening response, she nonetheless was able to note a decline in disruptions to service over the past year. Idrac said that work days lost per worker had dropped from 0.7 last year to 0.13 for the first six months of this year. She further announced a 100-million Euro investment in network upgrades, as well as the hiring of 1,000 extra workers, as a potential sweetener for the unions' acceptance of this reform. (It is not yet clear whether these will be new positions, or merely replacements for staff who leave or retire.) Union responses -------------- ¶5. (U) Prime Minister Francois Fillon said the bill was not an attack on French labor's sacrosanct right to strike, and argued that ordinary workers would benefit most. "The right to strike is a fundamental right - the right to go to work, too." However, unions disagree. No less than eight trade unions (CGT, CFDT, FO, CFTC, SUD-rail, UNSA, CFE/CGC and FGAAC) have signed a unified declaration claiming that the right to strike is in no way negotiable. They claim that 98 percent of all rail traffic disturbances are due to mechanical/technical problems rather than work stoppages. The most extreme of these unions, SUD Rail and SNCF train drivers' federation FGAAC, announced after a meeting with the government that workers would continually give notice of strikes in an attempt to subvert any legislation. The CGT, for its part, has asked 60 National Assembly members to challenge the draft bill before the Constitutional Council. ¶6. (SBU) Many of these unions organized some 80 demonstrations throughout France on July 31; the 5,000 overall nationwide turnout, and somewhat desultory gathering behind the National Assembly in Paris, bespeaks the growing indifference of the French public and French employees to organized labor. The leader of the Communist-backed CGT, Bernard Thibault, threatened to disrupt the rugby World Cup taking place in France in September and October. He said that if his trade union did not reach agreement with the SNCF minimum service plan to be developed before the end of the year, his and other trade unions would interrupt train services to various World Cup destinations. The decision of the Constitutional Council will ultimately decide the future and extent of future union protest. (Comment: The low attendance of the demonstration organized in Paris on July 31, the first day of the reading of the PARIS 00003251 002 OF 002 bill in the National Assembly, confirms that the days of French rail unions' power to bring the entire country to a standstill is not what it used to be. End comment.) The "right" to strike in public transport -------------- ¶7. (SBU) In France, the right to strike is an individual right and does not necessarily require a strike call from a trade union. However, strike action in public transport must be announced ahead of time. In practice, this requirement has often been by-passed by trade unions. In order to avoid individual penalties for "unofficial strikes," trade unions have tended to issue continuous strike notices covering all employees at all times. ¶8. (SBU) To curb this trend, the Paris Public Transit Authority (Rgie autonome des transports parisiens, RATP),which runs the Paris metro and bus services as well as a part of the regional public transport network, has developed an in-house dispute-resolution system, which has helped significantly to reduce the number of strikes in recent years, especially short-notice walk-outs. The French National Rail Company (Socit nationale des chemins de fer frangais, SNCF) reached a company-level agreement on this issue in 2003, but this has not prevented last minute strikes. Possible extension to other sectors? -------------- ¶9. (U) There have been strong indications that the government is thinking of extending its minimum service requirements in the transportation sector to other public services. Prime Minister Fillon has stated that if the law works, it should be extended to include other public services, notably education. The Senate, which adopted the minimum service draft bill earlier this month, introduced an amendment to that effect, but it was withdrawn by the National Assembly. Jean-Frangois Cop, President of the UMP group in the National Assembly, confirmed that an extension of the minimum service was being considered when he raised the question of closing down schools in case of a strike. ¶10. (SBU) Quick to defend their prerogatives, a group of five teachers unions (FSU, Unsa Education, SGEN-CFDT, FAEN, FERC-CGT) -- the other major public service bastion -- immediately announced their intention to organize protests in the fall, although they said their focus would be on GOF plans to abolish teaching jobs through attrition. (Prime Minister Fillon's recent announcement (ref C) that his original scheme not to replace half of the 450,000 civil servants scheduled to retire over the next five years had been revised downward may help curb future demonstrations by teachers, and prevent a much-feared merging of forces between transportation and teaching unions, the strongest bastions of opposition to change in France over the past 20 years.) Minimum service: an old debate in France -------------- ¶11. (U) The draft bill on minimum service is a follow-up to a debate launched in 2003, when trade unions organized widespread industrial action to protest government plans to reform pensions and health insurance. Then-President Jacques Chirac came out in favor of developing a minimum service initiative. A group of experts, none of whom were drawn from trade unions, produced a report in July 2004 supporting Chirac's initiative. The shelved report called for many of the proposals contained in the current draft bill. Comment -------------- ¶12. (SBU) Minimum service is the first major social test of the Sarkozy presidency. The bill intends to show the last pockets of resistance to reform in the public sector that they can no longer hang on to old prerogatives and wield the kind of power that brought the country to a standstill in 1995. Further down the road, Sarkozy's success with the introduction of a minimum service -- emblematic though it may be -- will set the tone for other labor reforms. Trade unions are aware that beyond a more regulated right to strike, what is at stake is the traditional role of France's five main trade unions. As Elysee Chief-of-Staff Claude Gueant is keen to point out, French trade unions represent only between five and six percent of the workforce, hardly enough to lay claim to representing people who work, let alone to disrupt the activities of those who want to work. Pekala