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Four Ways to Fire a Frenchman

by marco Mon Mar 27th, 2006 at 09:02:10 PM EST

Short but apparently informative article in the New York Times on how and why it is difficult to fire an employee in France.

I say "apparently informative" because the New York Times is an organ of the American media which has been accused of having a biased slant regarding France's economy and the current demonstrations over there about the CPE.

According to the article, the four ways to fire someone in France are:


  1. PROVE YOU CAN'T AFFORD THE JOB
    A company must be able to prove in court that eliminating the position is necessary either because of economic woes or because it is essential to remain competitive.

  2. PROVE HE DID A BAD, BAD THING
    ... you can fire him for doing a job badly. ... the company has to be able to prove in court that the grounds are real and serious, which can be difficult.

  3. PAY HIM TO SCRAM
    ... there are damages, which can be just a few months' salary for a young person who has worked at a company less than two years but can be several years' salary for someone closer to retirement with many years at the company.
    I guess that sentence refers to the legally mandated indemnités de licenciement.

  4. PUT HIM IN A CUPBOARD AND THROW AWAY THE KEY
    ...moving them out of the way and leaving them alone in hopes that they eventually quit.


Display:
I'm betting they contrasted this with (say) the UK or Ireland, right?
by Colman (colman at eurotrib.com) on Tue Mar 28th, 2006 at 01:17:37 AM EST
It's pretty easy to sum things up in this way, and the tone of the NYT piece is snide (ha-ha-ha how to fire a Frenchman LOL!), and not at all neutral on employer/employee relations (the only source is a lawyer working presumably for big firms on, again presumably, big lay-offs. No one from a union is consulted, for example).

Comment: let's take it from the end.

(4) The cupboard solution is one that is known pretty much everywhere, not just in France, and all it adds to this article is a closing "humoristic" note.

(3) Reaching an agreement over the departure of an employee, which may include payment of a sum of money, is also a practice not specific to France. How much do American CEOs get in their "severance package" when they screw up and have to go?

More seriously, this section mixes up obligations which are legal and contractual, with optional offers of money. Legally, severance pay is due if the employee has been employed more than two years, and the cause for dismissal is not extremely serious, (such as theft, for example). Contractually, the period of notice must be paid even if the employer tells the employee not to come to work during that period (but on this point, does no one in other countries, including the US, have a contract stipulating a notice period of one, two, three months, sometimes more?) What may be optional in some cases is that an employer makes an offer to an employee to reach an agreement over the employee's departure. Again, is that kind of arrangement unknown elsewhere?

(2) PROVE HE DID A BAD, BAD THING That's really skewed and not informative. Put it this way: if an employee does a bad, bad thing, you can fire her/im on the spot and throw them off the premises (and proceed to sue them if you wish, in cases of embezzlement or commercial/technological espionage, for example).

In cases where it's not a bad, bad thing, but just incompetence, poor performance, incapacity to do the job (including for health reasons), refusal to accept changes that were properly discussed in advance, (for example), there is a procedure to be followed in which the problem is discussed and evaluated between employer and employee and, if the problem isn't settled, dismissal follows. Dismissals for causes like this happen all the time.

It's important to note that the article seems to assume the employer needs to go to court to fire someone. This is not so. If the employee decides they consider the dismissal unfair, they are free to take it to court. Then the employer has to show the procedure was properly respected, and the cause was real and serious. Employees win these cases fairly often, but employers do too.

(1) Economic reasons. In cases like a downturn, or a change in specific market conditions, or loss of a contract, etc, you can lay people off, again by following proper procedure since you may have to show this in court (but not necessarily, see above). Large companies have more constraints in this field ("social plans" for big lay-offs).

On severance pay: this is mandatory in dismissals except those for extremely serious causes (bad, bad things). But it is not as colossal as is often made out. The English-language press often talks of "hefty severance" and burdens and suchlike. But the basic mandatory system is :

  • no severance pay during years one and two;
  • thereafter, a small amount per year of employment. I think it's one-twentieth of one month's salary per annum. I'll try and check and confirm that.

(Of course, if you have hired someone after negotiation of more favourable conditions for that employee, you're contractually bound by those conditions -- as you would be anywhere else in the world).

So, to sum up: the NYT piece isn't entirely false, but it takes a certain manifest delight in playing on conventional wisdom and received ideas about (ha-ha-ha!!!) the French and hiring/firing. Reality is more complex. France is certainly not America in these matters, but neither is it the caricature shown in the Eng-lang press.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Mar 28th, 2006 at 01:21:46 AM EST
And a recent study quoted by Le Monde yesterday suggests that companies seem to increasingly avoid the cumbersome procedures set in the law for "licenciement pour motif économique" (firing for economic reasons) by resorting to "licenciement pour motif personnel" (firing for personal reasons) - essentially, negotiated contract interruption with the worker, with a severance payment and an agreement by the worker not to use.

French companies that want to get rid of people do it - all evidence poitns that way.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Mar 28th, 2006 at 03:12:37 AM EST
[ Parent ]
"not to use" = "not to sue" (?)
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Mar 28th, 2006 at 03:27:54 AM EST
[ Parent ]
yes. I need to proof read myself better these days. Trying to do too many things at the same time...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Mar 28th, 2006 at 03:43:12 AM EST
[ Parent ]
Severance pay: it is one-tenth (not 1/20 as I said) of one month's salary for each year worked in the enterprise, once the employee has passed the two-year threshold.

So, for €1,000 in monthly gross salary:

  • employee in company <2 years : severance = €0
  • employee in company  5 years : severance = €500 (5 x €1,000/10)
  • employee in company 10 years : severance = €1,000

After 10 years, there's a bonus 1/15 of monthly gross to add, calculated on the years <10

NB: "Economic" dismissal costs exactly twice as much in severance. This is probably why employers seek to terminate for other causes, or by transaction with the employee (see Jerome's comment).

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Mar 28th, 2006 at 07:28:32 AM EST
[ Parent ]
A few facts in an opinion piece in Le Monde, by Jean-François Couvrat. It's in French, but here are the highlights:

  • the unemployment of 22% for the youth really means that 8% of the youth are unemployed, lower than the EU average (where have we heard that before)

  • Eurostat indicates that the main indicator to assess the flexibility of a labor market and the mobility of workers is the proportion of workers who have been in their job for less than 3 months. That proportion is 6.7% in France, higher than in the UK and than the 4.9% EU average...

  • French companies never stop creating jobs. In 1993, the worst recession year in a long time, they hired 3.6 million people; the number was 4.8 million in 2003, a year with weak growth, and 5.4 million in 2000, a boom year.

And a few facts from the much quoted Blanchard study (pdf):


The labor market is characterized by large flows--high rates of separations from firms, and high rates of hires by firms. In France for example, 1.5% of all jobs are destroyed each month and roughly as many are created-- interestingly, this is about the same percentage as in the United States. As there are many reasons other than job destruction why a worker may separate from a firm, the flows of workers are typically much higher. In France, they are of the order of 4% per month (Pierre Cahuc and André Zylberberg 2004).



In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Mar 28th, 2006 at 03:08:07 AM EST
My reply is: "why else would you want to fire someone anyways"?

You either fire an employee because you can't afford him (1), or because he doesn't do his job well (2), or because you can't stand the fact that he slept with your daughter (3). (4) is a non-issue, meant to manipulate the reader.

It's for the (3) that the CPE will be felt most ... and why we need to fight against it. As Jérôme pointed out, it's being increasingly resorted to by French companies, so with the CPE it'll all be (3): "I don't like your shoes" ... "You have bad breath" ... "What? You don't like rugby?"

by Alex in Toulouse on Tue Mar 28th, 2006 at 03:38:29 AM EST
This is unrelated, but I just noticed that Libération has a special on known student figures active against the CPE, and this one person, here:

--

(source: http://liberation.com/page.php?Article=370253&Template=GALERIE&Objet=62344)

--

... was in the loud group of students (guy holding the microphone) I show in my anti-CPE demonstration picture diary:

ps: I'll be joining in today's demonstration (13:00), but still haven't decided whether I'll be taking pictures (it may rain, and since I prefer to go with my bike -this ensures more mobility- and that the last time this proved difficult to handle while taking pictures, I might just leave the camera at home).

by Alex in Toulouse on Tue Mar 28th, 2006 at 04:24:17 AM EST
[ Parent ]
You HAVE to take pictures! What will ET do without your pictures?!

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Mar 28th, 2006 at 04:32:28 AM EST
[ Parent ]
We can become real 'press', but only if we have prictures by our correspondents.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 28th, 2006 at 04:34:53 AM EST
[ Parent ]
Exactly. One the FT is out, we can take over all the ad slots...

When through hell, just keep going. W. Churchill
by Agnes a Paris on Tue Mar 28th, 2006 at 07:45:59 AM EST
[ Parent ]
Yeees! I made up my mind in the shower, I will be taking pictures. In fact the demonstration starts near my flat, so I can even go a few floors up in the Town's Central Library (médiathèque) and take pictures of the crowd from above (just at the start I mean, after that I'll dive inside the crowd with my bike).
Ok I need to go to a friend's house first to try to convince her to come, so I'm signing off now. See y'all later.
by Alex in Toulouse on Tue Mar 28th, 2006 at 04:45:31 AM EST
[ Parent ]
I just noticed:


The laws on "licensement," as firing in France is called, are complex enough to fill a book, but in the end there are essentially four ways for an employer to deliver a pink slip.

The French word is "licenciement". The guy decides he needs to put the French word in his article, and he is not even fucking able to find the proper way to spell it?

Sloppy. Incompetent. Tedious.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Mar 28th, 2006 at 04:37:27 AM EST
Note the implication that only in France do labour laws fill a book. I wonder what law students, and paralegals, and practising labour lawyers, spend their hours poring over, if it's not books.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 28th, 2006 at 04:46:38 AM EST
[ Parent ]
As I've mentioned elsewhere, there is a cultural difference between countries of Anglo-Saxon legal heritage, where common law plays a large part, and countries of Roman tradition, where laws are far more often written in detail.

So France does have legal books called Codes, that lay out the law in detail. America and Britain may have less of this, but common law, custom, and jurisprudence need to be studied in its place.

One thing I don't get is this: if America is so free of legal rigmarole, how come the practice of law is such a big activity there?

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Mar 28th, 2006 at 04:55:15 AM EST
[ Parent ]
Actually, a labour law has a good shot at being a coherent whole that makes some sense, but case law? Talk about a complicated mess.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 28th, 2006 at 04:56:55 AM EST
[ Parent ]
American law is meant for corporations to sue to protect their hard earned money from unfair taxation, not for uppity workers to sue for hard earned corporate money...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Mar 28th, 2006 at 04:59:37 AM EST
[ Parent ]
It also guarantees trial by jury whenever the dispute is worth at least $20. Smart as the Founding Fathers were, they either did not expect the constitution to last, or did not know about inflation.

They could have said something sensible such as "an average workman's weekly wages" or something of the sort...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Tue Mar 28th, 2006 at 05:22:27 AM EST
[ Parent ]
To know "an average workman's weekly wages" demands access to statistics that are easily available in a country were almost all wages are taxed and noted in computerised records, but no so easily available in a country were that is not the case.

By the way, they probably could not foresee inflation in the way it exists today. Why would you have permanent inflation unless you print a lot of papermoney to cover the costs of a war? Which they had just done, making everybody convinced that metalmoney was the way of the future.

Coincidentally, the swedish voting law from 1866 contained economical barriers towards voting for the parliament. Fortunately they put them in exact numbers. Inflation meant more and more voters until liberals and socialists could win on a universal and equal suffrage platform.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Mar 28th, 2006 at 07:44:51 AM EST
[ Parent ]
Not coincidentally: property or income requirements for voting rights were de rigueur throughout Europe in the 19th Century.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 28th, 2006 at 07:53:31 AM EST
[ Parent ]
Yes, but IIRC the Preussian voting laws were not set to fixed sums but to percentage of the population that earned or owned that much.

So the coincidental thing was the probably unforseen consequences of making a fixed sum a limit, in the US leading to all cases tried by jury and in Sweden to universal suffrage. Of course both these developments could have been halted, but they had the inertia of the established.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Mar 28th, 2006 at 08:25:49 AM EST
[ Parent ]
How much of this labour law is actually EU law now? Anyone know?
by Colman (colman at eurotrib.com) on Tue Mar 28th, 2006 at 07:45:36 AM EST
[ Parent ]
Mmm, I'd say 40%. Not that bad.
This obviouslynot accounting for  the UK, who managed to negotiate as many opt out provisions as possible.

When through hell, just keep going. W. Churchill
by Agnes a Paris on Tue Mar 28th, 2006 at 07:47:59 AM EST
[ Parent ]
But don't seem all that different on the hiring and firing front. This is the bit that gets me about the whole "labour flexibility" thing. Nothing I've heard about the terrible French system seems all that different to the wonderful Irish system. I still have no clue what the problem unique to France is meant to be that could be fixed by screwing with labour contracts. The unemployment problem is clearly a much more complicated system problem that requires pretty comprehensive tweaks to the system to fix. The current plan is senseless.
by Colman (colman at eurotrib.com) on Tue Mar 28th, 2006 at 08:02:26 AM EST
[ Parent ]
It is indeed. Wonder how so many clever brains at the government think tanks eventually came up with such nonsense.
As Kcurie's sig puts it, it's myths, not realities, that operate in people's minds. The myth of fixing a complex problem with one unique solution is so tempting.
A simple solution is easily understood by the dumb electorate and you do not have to bother providing explanations. Regarding the CPE, reactions reveal it was well understood indeed. <s>
As the old saying goes "Never underestimate your enemy". For the French rights, the enemies are the dumb workers. Now the government did underestimate them all right.

When through hell, just keep going. W. Churchill
by Agnes a Paris on Tue Mar 28th, 2006 at 08:24:08 AM EST
[ Parent ]
Yup, I think everyone understood the CPE!

I was reading the Blanchard paper that Jérôme referenced somewhere and it seems pretty clear to me that this is a problem with many possible solutions that are all complicated. Throwing the workers to the wolves is not the only possible solution.

by Colman (colman at eurotrib.com) on Tue Mar 28th, 2006 at 08:30:39 AM EST
[ Parent ]
I hardly think that America is free of legal rigamarole. The argument is that if you have a system based on the rule of law, you end up with a lot of lawyers.

The difference is in the purpose of the laws. In American labor law the broad purpose is to support at-will employment, with the principal exceptions being unionized labor and government service. If the purpose was to provide worker protection we would have a kazillion laws to describe how to do that, instead.

by asdf on Tue Mar 28th, 2006 at 09:03:43 PM EST
[ Parent ]
Perhaps part of the reason that the NYR is being so snide is that they are feeling defensive about their own privileges: New York is one of the many states that allow employment on an at-will basis.

Employees in the USA are divided into two classes:

   1. at-will employees
   2. just-cause employees

An at-will employee in the USA can be terminated at any time, and for any reason - or no reason at all - and the courts will generally not intervene to protect the ex-employee from allegedly unfair treatment by the employer.

This doctrine even allows for dismissal for morally reprehensible reasons:

An often-quoted statement of at-will employment appears in an old case from Tennessee:

All may dismiss their employees at will, be they many or few, for good cause, for no cause[,] or even for cause morally wrong, without being thereby guilty of legal wrong.

In other words, in an at-will state an employer may fire his accountant for refusing to falsify the books.

The above quotes are taken from the History of At-Will Employment Law in the USA, which is a very lucid explanation of what at-will employment is and why it is bad law.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Tue Mar 28th, 2006 at 05:38:30 AM EST
"...part of the reason the NYT..."

Sorry.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Tue Mar 28th, 2006 at 05:40:15 AM EST
[ Parent ]
True, this is pretty much like "put them in a cupboard and throw away the key." But not leaving them alone, making their work hours a living hell.

This makes the whole thing less costly financial wise (for the company, goes without saying).
If pushed to resignation, the employee is not entitled to any compensation for contract termination, nor severance pay or job seeker's allowance.
Cost savings for the company and for the Sécu. Any better deal ? <s>

When through hell, just keep going. W. Churchill

by Agnes a Paris on Tue Mar 28th, 2006 at 07:52:00 AM EST
Don't forget that in the French "Moscow" system, it is illegal to harass an employee to obtain their resignation! Can you believe that?

I know of a "cupboard" case, though. This happened when a company was bought out by another, and wanted to put their people in all the key positions. They morally harassed one executive, depriving him of meaningful work, taking away his office, etc. He wasn't ready to go without compensation, and stuck it out. In the end they had to agree to his financial conditions to obtain his departure.

Oh, but that wasn't in France, (where employers always lose out, right?) The guy was my brother, and that happened in England.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Mar 28th, 2006 at 10:03:41 AM EST
[ Parent ]
That did happen in France as well. The guy was my first boss, and someone I admired and respected a lot because he was not of a kind to kill for a better position.
Not being a killer, he not only lost his position to someone more ambitious who had cajoled the Division Head until he got the job, but also had to leave the company to spare himself the humiliation of sitting in an office without computer or even phone. The man had spent 20 years "serving" the company.
I was in his office discussing a transaction when he got informed of someone else being nominated at his position through... an internal note in his post. Will never forget the look in his eyes.

When through hell, just keep going. W. Churchill
by Agnes a Paris on Tue Mar 28th, 2006 at 11:16:16 AM EST
[ Parent ]
Isn't
PUT HIM IN A CUPBOARD AND THROW AWAY THE KEY
...moving them out of the way and leaving them alone in hopes that they eventually quit.
what the English expression "made redundant" is all about?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 28th, 2006 at 07:55:55 AM EST
See my comment above!
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Mar 28th, 2006 at 10:04:31 AM EST
[ Parent ]
One must also consider whether a company is required to give advance notice of factory closings or large workforce reductions. This caused Compaq computer difficulty in the 1990s.

"Compaq acquired Digital in June 1998 but quickly ran into problems. European labor rules and work councils prevented Compaq from reducing staff quickly, and the company faced a number of problems integrating sales forces, said analysts. The company had announced 17,000 layoffs worldwide would result from the merger, as well as facilities consolidation and closings. But the process proceeded more slowly in Europe than other areas and is only now [July 1999] nearing completion."
http://news.com.com/Compaq+still+dogged+by+Digital+transition/2100-1001_3-228056.html

In the U.S. a company can close a non-unionized plant or liquidate a division overnight, with no advance notice to employees and with no requirement for any sort of service award or early retirement. Some local governments require advance notice, but often these do not have to be made public.

That's what employers want everywhere. The question is whether the overall result is better or worse than the more rigid contract approach.

by asdf on Tue Mar 28th, 2006 at 09:18:34 PM EST
Of course we should also consider whether Compaq engaged with local regulations competently and whether the time it took is a product of the regulations or Compaq's incompetence.

From the couple of people I know who worked for Compaq in Europe when Digital was taken over, the general lack of planning by Compaq turned what would have been at most a six month situation into a year long one.

It's also worth noting that the "year" quoted includes not just employee issues, but also disposal of other assets (e.g. land) which make the whole measurement period somewhat skewed in itself.

by Metatone (metatone [a|t] gmail (dot) com) on Wed Mar 29th, 2006 at 04:12:57 AM EST
[ Parent ]
Most of these companies that complain are usually foreign companies that want to do it the same way it is done back home and ignore local law, and complain when, gasp, the locals dare want to apply local law.

Most big groups that are competent handle the law well enough. I know that GE (France) files every year for a "plan social", goes through all the procedures under French law, and then goes on to fire people as they care to under their global "six sigma" management practices (fire the worst 10% every year).

A large company that complains about being blocked by the law really is incompetent. I can understand small employers being overwhelmed, but big companies? Please.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Mar 29th, 2006 at 04:59:14 AM EST
[ Parent ]
Most of these companies that complain are usually foreign companies that want to do it the same way it is done back home and ignore local law, and complain when, gasp, the locals dare want to apply local law.
Country of Origin Principle, anyone?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Mar 29th, 2006 at 05:01:22 AM EST
[ Parent ]
Heh, whoever wrote that into the directive needs identifying and then tarring and feathering.
by Metatone (metatone [a|t] gmail (dot) com) on Wed Mar 29th, 2006 at 12:55:15 PM EST
[ Parent ]


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Mar 29th, 2006 at 01:19:57 PM EST
[ Parent ]


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