French Businesses Loath to End 35-Hour Week

(The Associated Press)

France’s decade-long experiment with a 35-hour work week is coming to an end, sort of.

A new law allows companies to negotiate their way out of a rule that has drawn both ridicule and envy in other countries and that France’s labor minister calls a “straitjacket” on the economy.

Yet the law, which took effect just before France began returning from its long summer vacation, is meeting resistance from both workers and the employers it was meant to benefit, suggesting President Nicolas Sarkozy’s headline reform may do little to boost growth.

The 35-hour law wasn’t just about France. It set economists well beyond its borders to wondering: Is this the future of work in the developed world? Instead, the ensuing decade saw rich nations’ workers laboring ever more and more. Indeed, even French workers today average 41 hours a week of labor, despite the 35-hour rule, thanks to overtime and the time worked by those, such as farmers and the self-employed, who aren’t subject to the measure.

Nuclear plant technician Mikael Perniceni figures his free time is secure, regardless of this law being called the “coup de grace” for the 35-hour week.

The 28-year-old still expects to use some of his almost eight weeks of annual paid time off to travel to Salt Lake City next year to hear the University of Utah Singers, with plenty of time left over for visiting friends and family.

The reason for his insouciance: While the law permits companies to negotiate new, longer working time agreements with employees, few employers are expected to do so, because of a widespread reluctance to relive the often fraught negotiations that led to the current working time agreements, businesses and economists say. And a tough economic climate isn’t helping.

The new law is the most high-profile of a series of economic reforms promised by the conservative Sarkozy, and workers’ and employers’ response will be watched closely as a barometer of how much further Sarkozy can go without unleashing the fearsome street protests that have stymied past attempts at reform.

France began its experiment with a shortened work week in 1998. The idea was that by shortening the work day, employers would be forced to hire more workers in a giant work-share scheme, helping reduce the country’s chronically high unemployment rate of around 10 percent.

The measure attracted considerable attention abroad, with some envy at the extra free time enjoyed by French workers offset by mocking references to the supposedly “lazy French” (despite the stereotype, the French rank among the world’s most productive workers). Belgium, for example, cut its working week to 38 hours in 2003.

A report by national statistics agency Insee estimated that around 350,000 new jobs were created between 1998 and 2002 thanks to the 35-hour-week policy.“But the boom was followed by a bust, with very slow job creation over the ensuing years, so for the whole 10-year period, the net result was zero,” said Nicolas Bouzou, an economist at economic research firm Asteres.

Reforming the 35-hour law was one of Sarkozy’s main pledges during last year’s presidential campaign. Sarkozy says the measure was an economic mistake that did not create jobs as it was intended to do.

Lawmakers approved the new law in late July, and it came into force in mid-August, just in time for the mass return from vacation that the French refer to as “La Rentrée.”

Employers’ reluctance to make use of the law’s provisions means its economic impact is likely to be minimal, Bouzou said.

Bouzou estimated that the whole package of economic reforms instituted so far by Sarkozy, of which the 35-hour reform is part, would tack on an additional 0.3 percentage point to economic growth next year.

The reform “is probably badly timed,” agreed Laurence Boone, chief French economist at Barclays Capital. With the economy close to a recession, declining by 0.3 percent in the second quarter according to a provisional estimate, companies have little need for longer work weeks, Boone said.

Even businessmen who rail against the 35-hour workweek say they don’t plan to make use of the new law, at least for now.

The 35-hour week is “a very bad thing, it devalued work, it’s unhealthy and difficult,” said Gilles Lecointre, founder and chief executive of Intercessio, a 150-person economic consulting firm in Paris.

But Lecointre, who also teaches at French business school Essec and has written a book on small and medium-sized companies, says he has no intention of ditching his company’s 35-hour agreement.

“At Intercessio, the negotiations over the 35 hours for salaried employees were long and terrible. It destroyed relationships,” Lecointre said, “We’re not going to go back through that.”

Lecointre recalls a bitter exchange with an employee who was blocking a deal because of a dispute over a few extra minutes of work per day. The working time debate resembled “haggling over a carpet with a rug merchant,” Lecointre said.

Under the complicated legislation passed in 1998 and 1999, the legal work week was shortened from 39 to 35 hours, with no reduction in pay. Overtime was limited to 130 hours per year. White collar employees whose work schedules didn’t permit a strict application of a seven-hour day were given about two weeks worth of extra holiday, so that once averaged out over the year their work week was also 35 hours.

In practice, French workers average 41 hours of labor a week, according to recent figures from France’s statistics agency. That’s more than Germany or Britain — and not much less than the 41.7 hours worked in the United States in 2006. Read the complete article.