France's 35 hour work week coming to an end?

French businesses loath to end 35-hour work week

By GREG KELLER, AP Business Writer Wed Sep 3, 5:01 PM ET

PARIS - It's being called the coup de grace for France's decade-long experiment with a 35-hour work week — a policy that inspired both envy and ridicule in Europe and the U.S., and even some copycats.
ADVERTISEMENT

But the short work week proved difficult to implement and was derided by some in government as a "straitjacket" on France's economy.

Now a new law lets companies negotiate more hours from employees. But it's being met with resistance, even from the employers it was meant to benefit, suggesting President Nicolas Sarkozy's headline reform may do little to boost growth.

When France first implemented the 35-hour work week in 1998, economists well beyond the country's borders wondered: Is this the future of work in the developed world? But instead, the ensuing decade saw rich nations' workers laboring ever more.

Even in France, workers average 41 hours a week, thanks to overtime and those workers, like farmers and the self-employed, who aren't subject to the short week. That's more than Germany or Britain — and not much less than the average 41.7 hours worked in the United States in 2006.

Previous efforts to erode France's 35-hour week have been routinely met with protests. This time, however, workers have put up little fuss because the law went into force during the summer vacation season and it was left up to companies to apply the longer hours. And unions have made it clear they will fight, through strikes or tough negotiations, if and when companies put it to the test.

Even businessmen who railed against the 35-hour work week say they don't plan to make use of the new law, at least for now, fearing labor disputes like a decade ago.

The shortened week was "a very bad thing. It devalued work, it's unhealthy and difficult," said Gilles Lecointre, chief executive of Intercessio, an economic consulting firm in Paris.

But 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 bitter exchanges over a few extra minutes of work per day. The debate resembled "haggling over a carpet with a rug merchant," Lecointre said.

Some workers said they believe their free time is secure, regardless of the new law.

Mikael Perniceni, a 28-year-old nuclear plant technician, knows only the 35-hour system, having started his career after it was introduced. And if employers are reluctant to end it, that's fine with him.

"I hope it won't change much," he said, but added: "I'm not really worried."

With nearly eight weeks of annual vacation, he still expects 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.

When France began its experiment with a short work week, the idea was that it would force employers to hire more workers, reducing the country's chronically high 10 percent unemployment rate.

The measure attracted attention overseas and inspired copycats. Belgium, for example, cut its work week to 38 hours in 2003. Other European countries, such as Germany, set below-40-hour work weeks through collective bargaining. In Denmark, standard work contracts generally allow for a 37-hour week, while Finland experimented with a 30-hour work week in some cities from 1996 to 1998 to try to address high unemployment rates.

A report by French national statistics agency Insee estimated that some 350,000 new jobs were created between 1998 and 2002 thanks to the 35-hour 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, under the slogan: "Work more to earn more." The new law was approved by lawmakers in late July.

Its economic impact is likely to be minimal, Bouzou said, estimating the whole economic reform package, of which the longer work week is just a part, would add only 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, companies have little need for longer work weeks, he said.

Under the complicated legislation passed in 1998 and 1999, the 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 application of a seven-hour day were given about two weeks worth of extra vacation, so that averaged out over the year their work week was also 35 hours.

The new law retains the legal limit on working hours but allows companies to negotiate opt-outs with employees. It also lets companies increase the maximum number of working days for white-collar workers to 235 per year from 218.

But even though polls show purchasing power is voters' top concern, only 25 percent of French want to work more to earn more, according to a recent survey by the CSA polling firm.

Officials at France's largest companies seem reluctant to reopen the work-week issue.

Renault spokeswoman Sophie Perrier said France's largest carmaker is satisfied with the labor agreement it has had in place since 1999 and plans no changes.

Two of France's powerful labor unions drew only a few hundred participants to a demonstration against the new law last month in Paris, which could indicate acceptance of the inevitable — or just the fact that many workers were away on vacation.