Unemployment insurance: the (controversial) reform soon to be applied, new appeals expected

Emblematic reform of the quinquennium with a chaotic course, the tightening of the rules for calculating unemployment benefits must come into force this Friday, October 1, in the face of still fierce opposition from the unions against an “unfair” provision, penalizing job seekers . Flagship measure of the controversial reform of unemployment insurance, the new calculation rules were to apply on July 1, but the Council of State, seized urgently by the unions, had suspended them in extremis, arguing “uncertainties on the economic situation”.

Without waiting for the judgment of the high court expected on the merits – on a date which has not yet been fixed – the government has issued a new decree, which should be published this Thursday in the Official Journal. It is no different from the previous one, but highlights the return to green on the employment front. Bis repetita: all the central trade unions – including the CFTC, which had abstained the previous time – have already provided for new remedies. In their ranks, it is emphasized that the first payment of post-reform allowances will not occur before the beginning of November, thus leaving time for the Council of State to decide.

But “we are not going to tell stories, the battle, now, it will be a little verbal”, said recently behind the scenes a union official, who is not ready to put his “hand in the fire on the chance of to win”. The unions know that the high court is reluctant to question provisions already in force, because this would create “recalculated”.

Reduction in compensation for more than a million recipients

The opposition to the reform will be whatever happens one of the watchwords of the day of mobilization of October 5 at the call of an inter-union CGT, FO, FSU and Solidaires. Wind up from the start, the unions denounce in particular the new method of calculating the daily reference wage (SJR), the basis of the allowance, which will penalize job seekers alternating unemployment and activity, “the permittents”.

According to an assessment by Unédic carried out in the spring, up to 1.15 million people qualifying for benefits in the year following the entry into force of the reform would receive a lower monthly allowance (by 17% on average), with in at the same time an extended “theoretical duration of compensation” (14 months on average against 11 before the reform).

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The goal of government reform: encouraging work

The executive defends a “fairness issue”, the current system being more favorable to those who alternate short contracts and inactivity than to those who work continuously. He pleads that it is a question of “encouraging work” and presents the reform as one of the answers “to the difficulties of recruitment” of companies. For Emmanuel Macron, “we must ensure that it is never more profitable not to work than to work”.

For the unions, this amounts to imputing to the unemployed the responsibility for their precariousness, with immediate effect. And this, while companies that abuse short contracts, under observation since July 1, will be penalized by a “bonus-malus” system which will not come into effect on contributions until September 2022.

The entry into force of the new method of calculation almost completes a long saga, spread more or less over the entire five-year period, between suspensions in the light of the Covid-19 crisis, court decisions and other modifications in view of the context.

Two more tightenings by December 1

Still to come is the hardening of part of the reform linked to the observation of a “return to better fortune”, based on economic indicators, expected on December 1. This concerns the rules on the duration of affiliation necessary to open or recharge a right (which must go from 4 to 6 months) and the degressiveness of allowances for executives (after 6 months of compensation and no longer 8). Once “all the measures taken on board”, Unédic estimated that the reform would lead to lower expenditure of 2.3 billion euros per year.

The only provision that finds favor in the eyes of the unions is the bonus-malus system. But they relativize the scope insofar as, at the end of this long soap opera, a renegotiation of the unemployment insurance agreement will have to be launched in the fall of 2022. That is to say, exactly when this system of bonus-malus must come into effect.

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