The Prime Minister, Elisabeth Borne, presented, on Wednesday April 26, her roadmap for the “hundred days” mentioned by the President of the Republic, Emmanuel Macron, in an attempt to turn the page on pension reform. Addressing purchasing power, the head of government notably promised to obtain “a fairer distribution of the wealth produced by companies”.
In order to achieve this objective, a bill transposing the national interprofessional agreement on the sharing of value in business, concluded in February between the social partners, will be presented to Parliament. “within three months”announced M.me Thick headed. Interest and participation, what is the difference? What does the interprofessional agreement contain? Could it be transcribed as it is in the law? The world make the point.
What will this agreement be used for?
The inter-professional agreement on the sharing of value within the company aims to improve and generalize profit-sharing or participation schemes for employees, and thus improve their remuneration in a context of soaring prices. The agreement was validated by all employers’ organizations and trade unions, with the exception of the General Confederation of Labor (CGT).
The three months of discussions between employers’ organizations and trade unions were structured around an orientation document transmitted by the government. The executive thus intends to follow up on the “emergency measures” law for purchasing power, adopted in August 2022, the first part of the package of provisions to deal with inflation.
Interest and participation, what is the difference?
Incentive and participation are variable benefits, since they depend on the performance of the company. The employee can place the sum in an employee savings plan – company savings plan, group retirement savings plan, etc. – or get it back. In this case, the amount of the bonus is taxable in the same way as the salary.
- Incentive is optional and can be set up by all companies. This system, determined by company agreement, makes it possible to pay all employees a bonus proportional to the results of the company.
- The participation is compulsory in companies with fifty or more employees. It can also be adopted in smaller structures. It is a mechanism for redistributing company profits to employees.
- Variable compensation is linked to the collective performance of the company or to the individual objectives of the employee. It is the subject of a clause in the employment contract. It may include the incentive bonus but also, for example, bonuses or commissions, benefits in kind (telephone, company car, etc.) and finally stock options or distribution of free shares.
What does the interprofessional agreement contain?
This agreement contains thirty-six articles and two main measures.
- For companies with eleven to forty-nine people: they will be obliged, from 1er January 2025, to establish at least one mechanism “legal value sharing” – participation, profit-sharing or even “value-sharing bonus” – if they generate, for three consecutive years, a significant profit, at least equal to 1% of their turnover. Companies with less than eleven employees “have the possibility” to share the profits with their employees.
- For companies with at least fifty people: discussions must take place in such a way as to “better take into account exceptional results” made in France. A measure that echoes the debate on the taxation of superprofits, revived by the unequaled surpluses of TotalEnergies.
The agreement between the social partners included in the law
Certain articles of the agreement require modifying the law to be applied, in particular the establishment of participation in companies with fewer than fifty employees. To give pledges to the social partners, after the disastrous episode of the pension reform, Mme Borne promised, on February 20, “the faithful and total transcription of this agreement into law”.
“All unraveling” would be “a stab in the back of the social partners”had warned, February 19, Geoffroy Roux de Bézieux, President of the French Business Movement. The next day, Laurent Berger, secretary general of the French Democratic Confederation of Labor (CFDT), hammered home: “The agreement must be respected by Parliament”Otherwise “it would be a tripping up of social democracy”. An orientation confirmed by Mme Terminal Wednesday.
Points that could get stuck at the time of transcription into law
Will the commitment made by the Prime Minister be respected? The parliamentary report of the fact-finding mission on value sharing, led by MPs Louis Margueritte (Renaissance) and Eva Sas (Europe Ecologie-Les Verts), was delivered on 12 April. Without calling into question the agreement, the rapporteurs consider it necessary to supplement it.
The report recommends advancing the planned date of application by one year, i.e. to 1er January 2024. “Bring this mechanism into force on 1er January 2025, taking into account the figures, including from 2024, would mean a first payment in the course of 2025, i.e. within unsatisfactory deadlines in relation to the urgency of purchasing power”, write the authors. In addition, the rapporteurs are concerned about the absence of an obligation to set a minimum amount to be distributed to employees. “A business leader could thus satisfy this obligation by distributing a PPV [prime de partage de la valeur] of 1 euro »they point out.
The rapporteurs also warn of the number of companies obliged to set up a mechanism for sharing the value which “could be relatively small”. As a reminder, companies of eleven to forty-nine people will have to establish it if they make, for three consecutive years, a profit at least equal to 1% of their turnover. However, according to estimates from the Ministry of Labor on 2020 data, “a maximum of 16,750 companies, out of the 130,000 companies with between eleven and fifty employees, could be concerned (…)i.e. between 180,000 and 840,000 employees”.
Finally, with regard to “exceptional results”concerning companies with at least fifty people, Mme SAS notes that “the implementation of the devices” provided for in the agreement “remains very uncertain”, insofar as the definition of exceptional results will be subject to the assessment of the employer.