It is always necessary to follow the development of regulatory measures to the end: the final version sometimes reserves a few surprises. Demonstration has just been made with the draft decree on the reform of unemployment insurance, which was sent on Friday, December 23, to the social partners. Revealed by the specialized press agency AEF, the text introduces a new scenario, consisting of reducing the duration of compensation by 40% when the unemployment rate drops below 6%.
The unions are in a rage, because of the content as well as the method: they assure that the government had not spoken to them beforehand about this addition, making it possible to tighten a little more the provisions applicable to job seekers.
The draft decree in question is linked to the law on the “functioning of the labor market”, which was published on Thursday at Official newspaper. The text plans to modulate the number of days during which a job seeker receives an allowance, depending on the economic situation. This idea of “countercyclicality” corresponds to a campaign promise by Emmanuel Macron.
Valid only until December 31, 2023
Today, a person unable to work can be covered for a maximum of 24 months if they are under 53, 30 months if they are 53 or 54, and 36 months for others. From 1er February 2023, any unemployed person will be subject to a “reducing coefficient” of 0.75, which will have the effect of reducing the duration of compensation by 25%. Example: an individual, who would have been entitled to twelve months of benefits under the current system, will be supported for nine months.
This modulation takes into account the state of health of the job market. To be able to assess it, the executive has chosen the unemployment rate as an indicator: if it is less than 9%, as is currently the case – at 7.3% –, the reduction coefficient applies. If the situation deteriorates, with an unemployment rate above 9% or up 0.8 points over a quarter, the duration of benefits will return to today’s level.
These rules will only remain in force until December 31, 2023. Until then, employers and unions will have to negotiate new ones, within the framework of an “agreement”. However, the countercyclicality mechanism will have to be maintained, as Olivier Dussopt, the Minister of Labour, explained during a press conference he gave on 21 November. He added that, during these discussions between the social partners, it will be “possible to consider” additional scenarios, or even “ to make things even tougher” if the“objective of full employment, at 5% unemployment, has been achieved”. But he did not provide further details.
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