Cablegate: "Minimum Service" Labor Reform Bill Challenges France's

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UNCLAS SECTION 01 OF 02 PARIS 003251

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SENSITIVE
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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

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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

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