the government strikes hard with a 25% reduction in the duration of compensation

the government strikes hard with a 25% reduction in the duration of compensation

A 25% reduction in the duration of compensation for all jobseekers eligible from February 1: the government struck hard on Monday by presenting its new unemployment insurance reform deemed “unacceptable” by all unions.

An unemployed person who would have been entitled, for example, to 12 months of compensation under the current system will only be entitled to nine months. A minimum floor of six months will be preserved. The first impacts are therefore expected from August 1st.

The Minister of Labor, Olivier Dussopt, hopes “100,000 to 150,000 additional returns to work” in 2023 thanks to the reform. “We are going to keep one of the most generous systems in Europe,” he assured at a press conference.

But the unions are furious. “Everyone sees their rights go down”, “it’s a scandal”, denounced Michel Beaugas (FO) after a final meeting at the Ministry of Labor.

Today, the duration of compensation is applied according to the principle of one day worked, one day compensated, with a maximum of 24 months for those under 53, 30 months for those aged 53-54 and 36 months for those aged 55. or more.

Seniors “will pay the most”, going from 36 months to 27, reacted Denis Gravouil (CGT), fearing that they would switch to RSA.

The leitmotif of the executive is that unemployment insurance be “stricter when too many jobs are unfilled, more generous when unemployment is high”.

– Red or green –

“Protection mechanisms”, in the form of “additional rights” for job seekers, are planned in the event of bad economic conditions, explained Mr. Dussopt.

When job seekers reach the end of their rights, if the state of the labor market is “red” – an unemployment rate above 9% or increasing by 0.8 points over a quarter, then their duration compensation will return to today’s level. The unemployment rate is currently at 7.3% and the minister expects it to be “similar” in February.

If, for three quarters in a row, the unemployment rate falls below 9% and does not increase by more than 0.8 points, the situation will return to “green” and the duration of compensation will therefore be reduced again by 25 %.

The executive justifies its reform by the recruitment difficulties of companies, and makes it a first stone of its strategy to achieve full employment in 2027, that is an unemployment rate of around 5%.

On the employers’ side, Hubert Mongon (Medef) welcomed a reform which allows “to go in the right direction” towards the return to employment. For Éric Chevée (CPME), the announced provisions “usefully complement” the unemployment insurance schemes.

But for Jean-François Foucard (CFE-CGC), “the goal is to make basely economic savings”. Unédic has assessed them at up to 4 billion euros per year.

“It’s still a precariousness trap”, added Eric Courpotin (CFTC), for whom it would have been necessary to work on the costs related to work: travel, childcare, housing…

This is also what Michel Picon (U2P, craftsmen and shopkeeper) thinks partly, on the employers’ side, but he said he was “all in all favorable” to the reform because, according to him, the longer one remains unemployed, the more it is hard to find a job.

The government will then issue a decree. This was made possible by the “labour market” bill, adopted on Thursday by Parliament, which gives the hand to the government to decide on the rules until the end of 2023 in place of the social partners.

But the Minister has already assured that this modulation would be present in the “framework letter” which will be sent to the social partners during 2023 in order to negotiate new rules for January 1, 2024.

The government also wants employers and unions, which manage Unédic, to work in early 2023 on a new governance of the regime. But the social partners want governance and compensation to be negotiated at the same time and do not want to formalize the presence of the State in the management of unemployment insurance.



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