From Calais Lace Plant to Paris, French Unions Flex Muscles

  • Unions prevent Sunday openings at flagship department stores
  • Socialist President Hollande faces challenge within his party

From the English Channel port of Calais to the presidential palace in Paris, French unions are flexing their muscles.

A 126-year-old lace factory in the northern port city, with customers including Victoria’s Secret and Gucci, risks closure after unions won a court ruling. In Paris, unions this week forced Socialist President Francois Hollande to back off from his latest attempt at labor reform, while the capital’s shopping giants Printemps and Galeries Lafayette are battling labor representatives to enforce a new law that allows stores to stay open on Sundays.

The three events highlight a French paradox: while union membership is down and large-scale strikes are a thing of the past, labor groups are using their political leverage to squeeze out advantages from Hollande, whose popularity is sinking and who’s determined to avoid the kind of confrontation that brought thousands into the streets in 1995 and paralyzed the country for three weeks. That’s made unions, part of Hollande’s power base, a key hurdle in efforts to bring down France’s unemployment rate, which at above 10 percent is twice that in the U.K. and Germany.

“In France, unions don’t take into account unemployed people, which creates strong bias towards wages and against jobs,” said Radu Vranceanu, an economics professor at ESSEC business school in Paris. “They know the power they have left is to be disruptive, to block transport and infrastructure. They will use it. The system must be questioned.”

Unions have scheduled a day of national protests on Wednesday, threatening to bring Paris public transport to a halt, with a second day of action planned for March 31. Most unions are convening on Thursday on the outskirts of Paris to prepare their response to Hollande’s labor bill. They will hold meetings with Labor Minister Myriam El Khomri on Thursday and will also discuss issues with Prime Minister Manuel Valls next week.
 
“The problem we have today is to find people to sit around the table,” Stephane Le Foll, a minister and government spokesman, said Wednesday after Hollande’s weekly cabinet meeting. “We want to empower those who want to make compromises, to move ahead.”

‘Baroque’ Law

Take the case of Desseilles Laces. The more than a century old maker of delicate laces and frills woven into lingerie and other clothing by global luxury brands, is facing the prospect of being shuttered. A court ordered the company to rehire five employees fired following slumping sales in 2013 after unions challenged the action. 

Desseilles, which had 2015 sales of 7 million euros ($7.6 million), says the move will cost it about 1 million euros, and that it may force the company to declare bankruptcy, leading to the loss of 74 jobs. Both the company and the state are appealing the ruling.

“It’s an aberration, it’s baroque -- we may lose everything for a rule that protects unions who protect no one but themselves,” Michel Berrier, one of the owners of Desseilles, said in an interview. “At the end of the day, we spend more time struggling with French labor laws than focusing on our business.”

Sunday Openings

Galeries Lafayette and Printemps, department stores that draw thousands of tourists from around the world, are also grappling with labor issues. Unions are refusing to sign up to a new law pushed through by Hollande that allows the stores to remain open 12 Sundays per year, demanding additional compensation.

Galeries Lafayette said in September it was in talks with unions to open three Paris stores on Sunday and expected to add 1,000 jobs at its flagship store in central Paris, boosting sales by up to 7 percent. The stores said employees are “ready to work on a Sunday” even as unions block the effort.

Fewer than 8 percent of French employees belong to a union, compared with 25 percent in the U.K., 18 percent in Germany and just under 11 percent in the U.S. , OECD data shows. Yet French law keeps unions alive. If a company has more than 49 employees, it must have worker representatives even if no employee is a member of a union. Only two of Desseilles’s 74 employees are union members, Berrier said.

Union Clout

Unions have to sought to use that clout. Hollande this week had to delay a French labor-law overhaul after the nation’s main unions all opposed the plan. The bill would have essentially gutted the law that limits the French work week to 35 hours. It included provisions to allow businesses to increase working hours with minimal compensation and without real support of unions, as well as changes to make it easier for companies to shed jobs while limiting severance pay.

The reforms, far from “betraying the Left,” were aimed at addressing France’s high unemployment rate, Labor Minister El Khomri said in an interview on France 2 television on Thursday. She said the delay in pushing the bill through was to “take time to consult with social partners.”

Unions, however, have been emboldened by the government backing off. The CFDT seized on the delay as a victory.

“We’ve obtained the postponement of the labor law, now we’ll fight to obtain a re-balancing of the text,” CFDT Secretary General Laurent Berger said. “The ceiling on severance pay needs to be dropped, as well as the unilateral power of employers” to carry out job cuts, he said.

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