Covid-19: Time to reform UK labour law à la Française?
If necessity really is the mother of invention, the need to protect jobs and preserve the economy during the Covid-19 pandemic has triggered some of the most ambitious changes to UK labour law in decades. The creation of the Coronavirus Job Retention Scheme (CJRS) pushed UK labour law closer than ever towards a dirigiste social model, epitomised in France’s Code du Travail. By comparing the measures taken by France and the UK to protect workers amidst the pandemic, it will become clear that the benefits created by UK labour law’s temporary shift can only be fully realised by consolidating it around the social model adopted in France. The pandemic has provided the best opportunity yet to recalibrate the foundations of UK labour law à la Française.
Pre-Existing Legal Protections for Workers in Times of Crises
As Covid-19 spread around the world and lockdown loomed, the pre-existing legal protections for workers in times of crisis differed greatly between France and the UK. The French Labour Code allows employers to place employees in chômage partiel (temporary unemployment) in the event of a reduction or temporary suspension of working activity due to a number of pre-determined reasons. Rooted in a tripartite agreement dating from 1968, and re-evaluated every year to modify its contours, the so-called Short Time Working mechanism is an integral part of the structure of French labour law. So much so, when faced with the 2008 financial crash, France was the only European country to permanently maintain the reforms it had made to such labour laws, which included upping the State’s contribution to a worker’s wage by €1.40 an hour, to €3.34 an hour. In contrast, the UK made no such changes.
Whilst France has been adapting its chômage partiel system for decades, there is no equivalent Short Time Working mechanism embedded in UK labour law. Although Part III of the Employment Rights Act 1996 does provide for guaranteed payments for reduced hours, it is more of an “unfamiliar and archaic statutory duty” than an integral part of our national labour law. Indeed, UK labour law does “not facilitate the flexible variation of pay and working time for the work force in times of economic crises.”
The disparities between the UK and French models, in respect of their recognition and use of Short Time Working mechanisms, are stark. French labour law already had the tools to protect workers from the worst of the economic costs of the pandemic. Meanwhile, UK labour law’s preference for relying on individual contracts, rather that state-sponsored intervention in times of crisis, left workers more vulnerable and employers with less flexibility.
The Covid-19 Reforms
The severity of the current public health crisis necessitated rapid and radical action. The UK Government, inspired from the “specifically tailored schemes” of the continent, launched the CJRS. Faced with a reduction or cessation of activity, employers were permitted to furlough their staff with the Treasury subsidising 80% of an employee’s wages, capped at a maximum of £2,500 a month. A novel Short Time Working mechanism was established in UK labour law within days. Almost simultaneously, the French Government remodelled its current chômage partiel system by extending the permissible reasons for placing an employee in the scheme and widening its protection to those on part-time, temporary contracts. Despite the differences in eligibility and thresholds of the two mechanisms, both facilitated mass state intervention to prop up the labour market in a time of economic crisis.
However, the CJRS’s comparative weakness comes not from its lower cap or stricter eligibility, but rather from its uneasy positioning within the existing framework of UK labour law. As the CJRS is wound down, and in the absence of a long-term Short Time Working mechanism at the heart of UK labour law, employers will most likely resort to redundancies to cut costs. The Chancellor’s recently announced Job Retention Bonus for companies who take employees off furlough and continuously employ them until the end of January 2021 will not provide equivalent protection for those whose working hours will be reduced for months, if not years, to come.
In contrast, because chômage partiel is so well integrated within the French labour law model, it has been adapted to respond to the long-term challenges caused by the pandemic. A new scheme, nicknamed ARME (Activité Réduite pour le Maintien de l’Emploi), allows employers to part-furlough staff for up to two years. In return, the employer has to refrain from engaging in redundancies. Inspired by the chômage partiel mechanism, it provides suitable flexibility to employers and strong protection for employees, who are both covered by the State.
If UK labour law is to offer the same level of protection and flexibility, whilst preventing mass redundancies, the CJRS needs to be remodelled into a permanent, albeit tweaked, feature of UK labour law.
Social Dialogue: Implementing the Covid-19 Reforms
The creation of the CJRS has also demonstrated the glaring absence of social dialogue within UK labour law. With such schemes altering the nature of work for many employees, the need for social dialogue on a national and local level has never been more important. France’s infamous social dialogue model has been consistently relied upon throughout the pandemic. The ARME scheme was fleshed out in collaboration with trade unions on 8th June 2020 and employees can only be placed within the scheme after a local ‘collective agreement’ (accord collectif d’établissement) has been signed by all parties, including trade unions.
Professors Alan Bogg and Michael Ford QC from the University of Bristol have highlighted that one of the consequences of the CJRS in the UK, in its current application, is how it continues to promote the “individualisation of the worker’s voice” in the private sector. The employer holds all of the power when deciding who to furlough and for how long. The absence of strong collective organisations operating at a local level in the UK is creating an imbalance of power between employers and employees. In contrast, the role of social dialogue within French labour law has led to agreements on a local level substantially improving the rates of pay for furloughed workers. For example, an agreement creating a solidarity fund between three trade unions and the company Safran resulted in the lowest paid furloughed workers receiving 78% of their salary, rather than 71%.
Ramping up localised collective decision-making bodies in UK businesses ought to be made a priority in the post-Covid economy. Taking inspiration from the social dialogue provisions of French labour law would be a welcome first step.
The CJRS and chômage partiel have proven to be lifelines to millions of employees in both the UK and France. However, the Covid-19 pandemic has demonstrated the need for greater flexibility and stronger worker representation within national labour laws. With France’s well-established chômage partiel mechanism, spurred on by active social dialogue, its labour law model has proved more suited to tackling the current crisis than the UK’s model. As the UK Government winds down the CJRS, the absence of equivalent labour protections and mechanisms within UK labour law will hinder the UK’s ability to navigate out of this crisis. The UK would be sage to take a leaf out of France’s Code du Travail.
Jonathan is a final year law and french student at the University of Bristol. His interests include employment law, in a comparative and national context, tort law and French literary criticism.
