Unemployment insurance reform becomes clearer with 3,6 billion savings expected

The Minister of Labor Catherine Vautrin, who began receiving the social partners on Wednesday, revealed the key avenues, while the reform must be presented at the beginning of next week.

First to be received, the president of the CFE-CGC François Hommeril informed AFP at the end of a "quite difficult" meeting, that "the conditions of affiliation would be tightened": it will be necessary to have worked 8 months during the last 20 months, instead of 6 months during the last 24 months currently.

The ministry confirmed this lead, while emphasizing that Ms. Vautrin wanted “the government copy to evolve following these consultations”.

With this reform, the government expects "3,6 billion" euros in savings and the objective is to increase the number of people in employment by "90.000", the same source indicated.

In an interview with L'Express published on Wednesday, Emmanuel Macron praises a reform which "will strengthen the effectiveness of our compensation system and incentives to work".

“The pockets of the unemployed”

But on the union side, the reform is hotly contested. Received Wednesday evening, the CFDT sees a desire to “make even more savings” by picking “the pockets of the unemployed”, according to its number one Marylise Léon interviewed on BFM Business.

After the failure of negotiations between employers and unions on life at work and the employment of seniors, the Ministry of Labor announced at the end of April that it would set the new rules itself by "a deficiency decree" with a decision effective July 1.

The stated objective of this new reform is "to contribute to the achievement of full employment" i.e. an unemployment rate of around 5% (compared to 7,5% currently) and to "promote the rapid return to employment of unemployed people receiving compensation" .

The reform also comes at a time when the executive is seeking to make savings after the deficit skidded to 5,5% in 2023.

Prime Minister Gabriel Attal, who was fully committed to this issue upon his arrival at Matignon in January, listed three levers for changing unemployment insurance: the duration of compensation, the condition of affiliation and the level of 'compensation.

At this stage, only the conditions of affiliation are mentioned, a provision which "has more rapid effects" on employment, according to Renaissance MP Marc Ferracci, inspiration for the first unemployment insurance reform of the five-year term.

The extension to more sectors of the bonus-malus, a system to combat the abuse of short contracts, is also among the avenues, as well as a strengthening of "countercyclicality" with a further reduction in the duration of compensation if unemployment falls below 6,5% (this would generate 3 billion euros in additional savings).

The monthly payment of the allowance is also on the program, that is to say that the allowance paid would be identical each month, based on 30 days.

“Softened”

Mr. Hommeril also indicated that the government wants to create a “resumption of employment bonus” for seniors aged 57 and over, and at the same time cap compensation for unemployed people close to retirement. An “anti-managerial” and “unbearable” measure for trade unionists.

Ultimately, Matignon's line has softened "a little", according to government sources and in the majority, where the left wing had stepped up to the plate. The Prime Minister "had to retreat on the duration of unemployment compensation", according to an MP from this left wing.

But the unions, which had fiercely fought the controversial reforms of 2019 and 2023, are once again up in arms.

The heads of the five major centrals gave their support on Tuesday to a bill from the Liot group which aims to prevent "too much reform" and must be examined in the Assembly on June 13.

On the employer side, Medef President Patrick Martin supports the idea of ​​rules “even more encouraging to return to work”. The president of the U2P Michel Picon said in mid-April that he was "reserved" about the relevance of tightening the rules again, especially since "half of the unemployed are not compensated".