Austerity and social dialogue France London meeting September 2012 Gilles Jeannot Ecole des ponts

French civil service French civil service was organised in 1983 into three parts, State, local government, hospital.(5,3 millions) –State civil service (2,4 millions) (50 % executives, managers catégorie A) –Local government (1,8 million) (76%, workerscatégorie C). –Hospitals (1,1 million) Civil servants are mainly on tenure (status)

Social dialogue National dialogue on wages –Global adjustment to inflation point : open to media –Salary grid by corps : specialized –Bonus : secret National dialogue on rules (conseils supérieurs de la fonction publique) Dialogue on personal questions (carrier, mobility) is more active than dialogue on organisation (health, reorganisations). Trade union competition (tension between corporatists and non corporatists unions).

Trade unions 15 % membership ; 70 % participation elections basis for official representation CGT (23,5 %) especially strong among workers in municipalities, ex communist union, now open to negotiation Force ouvrière (17,6 %) corporatist, now confrontational Cfdt (16,8 %) non corporatist, open to negotiation FSU (11,%) very strong among teachers SUD (9,6 %) extreme left, confrontational

Social dialogue reform (2010) New trade union representation rules (all trade unions equal, elections held during one day only) A joint statement is recognised only if signed by unions representing 50 % of the voters and then government is considered bound to the signed agreement. Less formalism More importance put on organisation (health, reorganisation) (basis for representation)

National austerity measures wages point has grown up 2,8% for for a 4,4% inflation. –Specific compensation against loss : public servants received on average 800 euros –Half of the gain from staff reduction redistributed (salary grids, overtime) Global salary : plus 2,9 % in Bonus salary based on job level and efficiency

National austerity measures : staff reduction Non replacement of one out of two people retiring in 2008 – in 2009 for State administration Simultaneously local government and hospital staff growth

State public service (thousands) Local government public service Hospitals total Total employ- ement France Public employ- ement % , , , , , , , , , ,4 Source : rapport annuel de la fonction publique , p. 302.

National social dialogue and austerity The national dialogue on inflation adjustment point has been cut compensated by a technical discussion on salary grids No discussion at all on large reorganisations (revision générale des politiques publiques) on a national level and limited scope for local discussions

Local government public service Created in 1983, tension between an integrated model (communists) and a decentralised model (Deferre Marseilles Mayor)… in fact real autonomy. On a national level general rules are designed for state civil service and then adapted for local government On a national level it is difficult to find local employer representatives (mayor associations or superior council representatives ?) On a local level, tension between the mayor, the staff directorate, and deputy mayors

Local government austerity ? No staff reduction during the last years But budget freeze in 2010 Reduction project after ? Some specific austerity measure (case studies)

Case study : Saint Etienne Financial situation Industrial city close to Lyon in decline (population declined > ) The biggest debt per habitant among French cities (2158 euros in front of Marseille and Lille). Junk loans 150 millions loss for a 350 millions annual budget

Saint Etienne 2008 new mayor (socialist) and austerity plan –+ 9,5% on local taxes –Investment limitation –1% maxi payroll growth with a shift-age-technical skills of 3%) –Limited staff reduction (100). Reorganisation –Power concentration –Rationalisation of street level organisations (swimming pools, street cleaning, police, …)

Saint Etienne : social dialogue Formalised social dialogue procedures mixing direct and indirect dialogue Special attention to psychological risks Real dialogue and conflict on street level reorganisations Unease among medium managers Balanced impression : real confrontation but dissatisfaction

Case study : Saint ouen A city in the neighbourhood of Paris with social difficulties (drug traffic…) … and economic opportunities (in transition from industrial to tertiary ; population growth / new inhabitants building program) Regional audit commission accused the city of spending too much (too many municipal staff per habitant). Limited actions to contain cost expenses (discussion before staff replacement, action against absenteeism, ) 2% annual payroll growth for 2010 and 2011 against 4 % before.

Saint Ouen: social dialogue A mixture of public debate with the population and social dialogue –100 commitments to the population –21 decisions discussed with staff (indirect participation) –Specific monitoring comities Vivid local comities on reorganisations (active negotiation on street cleaning with financial compensations for schedule modifications) Alert system : after a difficult conflict in school cleaning and cafeteria, every time a trade union sees a strong social problem, it has the right to a meeting with staff directorate within two days (often one trade union and often for individual problems).

Case study conclusion Modernisation continues –Professional concentration of power against deputy mayors local influence –End of customary rules –Customer oriented organisations Formalised form of social dialogue (in these cities ?) but conflict culture. Best practices : mixture between indirect and direct participation (Saint Etienne), mixture between habitant participation and social dialogue (Saint Ouen).

General conclusion Drastic measures have been taken just before 2008 encourages New public management alignment more than austerity measures for state administration Austerity is only at the beginning for local government Austerity measures and reengineering in state administration have not been discussed. This contrasts with the new rules set to give more legitimacy to social dialogue (2010 law) Social dialogue in municipalities (even if sometimes open to conflict) seems more vivid.

And now ? Government change in 2012 Creation of jobs in schools but no public service growth Very limited growth on minimum salary and on point Undefined attitude towards local government expenses (political weight of socialist Senate)