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The Council of State cancels two hotly contested points of the unemployment insurance reform

It is a partial victory for the unions and the employers. The Council of State canceled, Wednesday, November 25, two highly contested provisions of the reform of unemployment insurance, a new headache for the executive which has already had to postpone its entry into force several times.

However, this decision has no immediate impact since, due to the economic crisis, the government suspended the application of the reform, decided by decree in July 2019, until 1er April 2021.

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In a press release, the Minister of Labor, Elisabeth Borne, also believes that the ongoing consultations with the social partners to take the crisis into account “Will allow solutions to be proposed in accordance with the judge’s decision”.

“A first victory” for the unions

In its decision, the Council of State cancels the point most contested by the unions of the reform drafted by the former Minister of Labor Muriel Pénicaud: the methods of calculating the allowance. He believes that ” door reached “ the principle of equality between beneficiaries. For a formal reason, it also cancels the introduction of a bonus-malus on the unemployment contribution of certain companies, criticized by the employers.

The court, however, did not question the tightening of membership conditions or the introduction of a degression for high incomes, also criticized by the unions.

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The unions unanimously welcomed the “This first victory”. “We must intensify the fight to obtain the total cancellation of a deeply unjust reform”, reacted the CGT; for the CFDT, the government “Must more than ever give up its reform”.

A system penalizing “permittents”

The canceled provision is at the heart of the philosophy of the reform desired by Emmanuel Macron who considered that the current calculation method does not encourage the resumption of stable employment.

The reform provided for the daily reference wage, the basis of the monthly allowance, to be calculated no longer on the total wages divided by the working days of the last 24 months but on this total divided by all the days, including not worked, of the period.

In the mind of the government, this modification was intended to correct a system more favorable, for the same number of working hours, to those who have split contracts compared to those who have continuous part-time work. But this strongly penalized “Permittent”, those often precarious who alternate unemployment and short contracts.

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“Due to the rules that have been retained, the amount of the daily reference wage can now vary from a single to four times for the same number of working hours., notes the Council of State. The result (…) is a manifestly disproportionate difference in treatment with regard to the ground of public interest pursued. “

According to Unedic, with the reform, 840,000 new entrants would receive a lower allowance than with the current rules. The decrease would be on average 24% (from 902 to 689 euros net per month). However, their compensation would last 18 months instead of 12.

A meeting scheduled for December for further adjustments

The other point canceled by the Council of State is the introduction of a bonus-malus on the unemployment insurance contribution paid by companies in seven sectors that are large consumers of short and temporary fixed-term contracts (accommodation and catering, food, transport, plastics, etc.). But it is canceled for a minor reason, the judge considering that the bonus-malus device referred, for certain terms, to a decree where a decree should have been required.

The plastics industry federation, however, said it was satisfied with this decision and asks the government to “Give up in the name of economic protection to a new implementation for the next few years”.

In the current discussions, the government has proposed to postpone for one year the entry into force of the bonus-malus, which would only apply to the 2023 contribution.

On the unemployed side, the Ministry of Labor has proposed to go back on the passage from 4 to 6 months of work (on the last 27) to open rights, but only for young people under 26 years old. The threshold for recharging rights would drop from six months (provided for in the reform) to four.

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As for the degression for job seekers who previously had a salary of more than 4,500 euros gross, this, amounting to 30%, would occur after 8 months instead of 6. These adjustments do not have not at all satisfied the unions, and a next meeting is scheduled for early December.

The World with AFP


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