In the pipes for a while, the new reform of unemployment insurance, which aims to change the rules of compensation according to the state of the labor market, is presented this Monday, November 21. Despite the efforts made by the government to convince it, the opposition remains headstrong against a text that the unions also strongly criticize. The “labour market” bill, adopted Thursday by Parliament, triggers the possibility, by decree, of modulating certain rules. The basic idea proposed by the executive: that unemployment insurance be “stricter when too many jobs are unfilled, more generous when unemployment is high”.
In other words, the system will become more protective if the the job market is doing badly. And less generous when it picks up colors. Enough to make the unions scream, denouncing an “unfair” and “ineffective” reform. “Nothing is completely fixed but one thing is certain: the rights will go down”, affirmed Jean-François Foucard, of the CFE-CGC, in The Parisian November 14. During a final multilateral meeting with the social partners, in the morning, Minister of Labor Olivier Dussopt will make known “the arbitrations selected”.
On the background of anger concerning the purchasing power, the government ruled out from the outset to touch the level of compensation. Another guarantee, the Minister of Labor also assured that he would not modify the conditions of access to unemployment insurance, ie the fact of having worked six months over a reference period of 24 months. Note that this component had already been tightened during the previous unemployment reform, a year ago. This time, the government has decided to tackle the duration of compensation, maintaining “a floor”, confirmed Olivier Dussopt, Sunday, in the program Le grand rendez-vous Cnews / LesEchos / Europe 1.
To understand the extent of this reform of unemployment insurance, we must return to the current situation: today, the duration of compensation is set at a maximum of 24 months up to the age of 53; 30 months between 53 and 54 years old; 36 months after age 55. Concretely, this protective straitjacket will break if the labor market is dynamic. According to several union and employer negotiators who had bilateral discussions this week with his cabinet, the Minister will announce that beyond a minimum floor of 6 months, the duration of compensation will be modulated according to the evolution of the rate unemployment for all people who have had their contract terminated after February 1, 2023, the date on which the reform should be applied.
A compensation period reduced by 25%
When the labor market situation is considered to be good, the duration of compensation will be reduced by a coefficient which will be specified on Monday, probably between 0.75 and 0.9, according to these sources. Currently, this coefficient is 1, which allows you to benefit from 24 months of unemployment (the maximum allowed, for those under 55) after 24 months of work. According Ie Sunday newspaper, the rate of 75% would have been chosen. This would mean that a compensation period of 24 months would be reduced to 18 months. “In the event of an economic storm, this limit will be raised to 24 months”, specifies the JDD.
Could the rights change along the way if the economic situation changes? “The government has promised that the benefit payment period will never decrease once it begins,” writes the weekly. The main losers of this reform are seniors, who could be covered by long-term compensation, having worked for a longer, or even complete, period. While they were protected for three years, they will only be protected for 27 months, the reduction coefficient applying to the 36 months from which they benefit. Unlike other previous measures, this reform concerns all workers, even those who have been active continuously.
To have this reform adopted, deputies and senators reached a compromise in a joint committee at the beginning of November, at the cost of a hardening imposed by the LR senators, to which the minister was initially opposed. It was added that two refusals in one year of a CDI after a CDD or an interim contract on the same post, the same place and with the same remuneration, will lead to the loss of unemployment compensation. It will be up to the employer to inform Pôle emploi. It is difficult to know how this measure will apply.
The way to assess the unemployment rate – threshold, dynamics – will also be specified today. But if unemployment stays around its current level of between 7.3 and 7.4 percent year-to-date, the term reduction will apply, the sources say. The executive insists that there is an urgent need to face the recruitment difficulties of companies, and makes this reform a first stone of its strategy to achieve full employment in 2027, i.e. an unemployment rate of around 5%. A goal that the minister considers “always achievable”.