It would be worth noting here how Germany also has multiple flexibility mechanisms in terms of working time. It is precisely why Germany’s shock to the labour market during the 2009 crisis was relatively mild.
In order to support such short-work schemes throughout Europe, on September 22 the European Commission activated its SURE instrument, which will provide up to $100 bn in support to workers affected by Covid-19, through EU loans to member states.
Proposals for combating unemployment in France
France can certainly do more to strengthen its arsenal of concrete and easily accessible solutions. In a note published by Institut Montaigne in September 2020, the author puts forth 9 policy proposals that France could apply in order to make the job market more flexible and provide various buffers to cushion the effects of the crisis:
- Making working time more flexible. The unprecedented recourse to reduced activity demonstrated the need for a quick and reactive adjustment of working hours, both in terms of increasing and as well as decreasing them. The law allowed companies to give their workers one week of annual leave during the crisis. Along that same vein, companies could be given the option of postponing or advancing annual leave within a three-year time frame. This would be strictly accompanied by the aforementioned social dialogue and the signature of a collective agreement between employer and employee, as well as a salary compensation. Such an instrument would amount to about a total increase or decrease of one month’s worth of working time, depending on whether the work was increased or reduced.
- Encouraging labour lending as a way to avoid contract termination. During the crisis, the various mechanisms aimed at increasing flexibility had been implemented after consultation with staff representatives. Though particular to the crisis period, such mechanisms could also be useful in the longer term. They particularly have the potential of ensuring financial stability between two companies, in the form of temporary labour lending. Temporary employment with an open-ended contract has been possible for 7 years in France and today there are approximately 50,000 such employment contracts. They offer a good compromise between the flexibility of temporary work and the security of a permanent employment contract. A way to encourage this type of work could be to end the legal obligation of having to justify the purpose of bringing changes to one’s missions and assignments, such as replacements, increases or decreases in activity. A clause that permits labour lending would be a useful way to protect workers from the precariousness of suddenly finding themselves jobless, which classing undetermined contracts do not necessarily ensure.
- Strengthening social democracy by allowing collective bargaining agreements to reserve the benefits established by the agreement to signatories. The purpose would be to encourage trade unions and companies to be proactive in their relationship to each other and to sign agreements that benefit both parties. This proposal certainly breaks with tradition in terms of how France navigates its relationship with trade unions. A trial could however allow for concrete grounds on which innovation could be developed.
Unemployment will most likely continue to increase. Innovation is thus key to dealing with the situation before it spirals out of control, by increasing the flexibility with which workers and companies can interact, organize their working time and sign new contracts. Vocational training will also play a key part in protecting workers at risk of losing their jobs and making sure that they are still able to be active in the job market, especially when it comes to independent workers. All tools and new ideas should be brought to the table and can play a key role in winning this battle against crisis.
Copyright: JEFF PACHOUD / AFP
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