When french lawmakers recently voted to scrap the country’s 35-hour workweek, it was music to the ears of the men and women who run multinational companies with workers there.
After the limit was first introduced in 2000, employers could do little but grit their teeth and live with the law. But in a televised address in December, French Prime Minister Jean-Pierre Raffarin seemed to have come around to the employer point of view.
He outlined a plan that would enable companies to negotiate their own deals with staff on overtime as long as the provisions fall within the European Union’s 48-hour workweek limit. The goal of the proposal, by which employees could work up to 220 hours of overtime each year instead of the current 180 hours, was to spur economic growth. On March 22, France’s National Assembly voted to approve the proposal.
While the bill will allow a lot more wiggle room for employers to negotiate with employees over their hours, consultants warn that companies had better be prepared for long negotiations. Trade unions have already come out vehemently against the plan and are ready to fight it. To address this, consultants advise that firms go public about why they need their staff to work longer hours.
"Companies need to be cost-competitive, and that means workers having longer hours," says Ferdinand Dudenhoeffer, who directs an industry research center at the University of Gelsenkirchen in Germany. "(They) need to actively communicate that to the public. Then the people of France will have a better understanding of the issues, and that will make negotiations with unions go more easily for employers."
Dudenhoeffer notes that in Germany, Volkswagen used this tactic when it hit an impasse with union workers over a pay increase. The union, IG Metall, wanted a 4 percent wage increase, while Volkswagen was pushing for a two-year wage freeze. After being very public about potential job losses that were facing the automaker, Volkswagen secured a 28-month pay freeze with the promise of no layoffs.
Another step that companies need to take before entering negotiations is to analyze how the 35-hour workweek helped or hurt the organization when it began, says Tim Reay, a principal in the London office of U.S.-based consulting firm Hewitt Associates.
When the limit was first enacted, many companies told workers that instead of working a 35-hour workweek, they could work a certain number of hours per year that would equal a 35-hour week and then negotiated how those hours would be broken out. If the French proposal becomes law, companies will enter similar discussions, but this time with more flexibility, Reay says.
"Companies will need to decide if it would be in their interest to renegotiate the terms," he says.
It is also important for employers that do decide to revamp their policies to do so slowly, says Ted Clarke, a principal at J. Edward Clarke & Associates, a Peterborough, Ontario-based human resources consultant. "You are going to have to phase it in," Clarke says.
While the inevitable round of negotiations will be intense, consultants agree that employers will have the upper hand. With countries like Poland and the Czech Republic now part of the European Union, it is increasingly easy for companies to find cheaper labor that will work longer hours.
"Multinational companies in France may be more prepared to say, ‘We are happy to work in France, but if you don’t want to put in the extra hours, we can move our business to other countries,’ " says Mark Sullivan, head of international consulting at Mercer Human Resource Consulting in London.
"The fact is that unemployment rates in France and Germany have persisted at high rates," says Olivia Mitchell, a professor and director of the Boettner Center for Pensions and Retirement Research at the University of Pennsylvania’s Wharton School of Business. "People realize that restrictive labor market tactics are not constructive for the economy." Consultants believe that France’s proposal is just another step toward a 40-hour workweek standard for the European Union. Like France, Germany currently has a 35-hour workweek, but unlike France, it is not set by law, but rather is dependent on agreements between unions and companies. "I believe in the next two years Germany will move to the 40-hour week," Dudenhoeffer says. "Then the other countries will follow."
Workforce Management, April 2005, p.17 --Subscribe Now!