Unhappy with upcoming reforms to unemployment insurance, several trade unions asked the urgent applications judge of the Conseil d’État to suspend the rules governing calculation of the unemployment benefit, as scheduled for application from July 1st. Uncertainties linked to the economic situation meant it was not appropriate at that time to implement the new rules, which are aimed at encouraging employment stability by reducing the unemployment benefits received by employees who alternate between short-term contracts and inactivity. On the other hand, the judge did not call into question the principle of the reform itself.
Following the 2018 failure of negotiations with the main trade and employer unions, the Government issued the decree of 26th July, 2019 (1), which redefined the unemployment insurance regime. After its partial cancellation by the Conseil d’État in November 2020 (2), a new decree was issued on March 30th, 2021 (3), with the same, though amended, provisions concerning how the unemployment benefit was calculated and to employer contributions.
Several trade unions, including the CFDT, CGT, FO, UNSA, FSU, CFE-CGC and the Union Syndicale Solidaire, asked the urgent applications judge of the Conseil d’État to suspend the decree.
A very uncertain economic situation in which to have the new rules for calculating the benefits apply immediately
The new rules for calculating the unemployment benefits are part of the Government's pursuit of an objective: encouraging long-term employment. The Government wants to make the unemployment benefits less favourable for workers alternating between periods of employment and periods of inactivity, and also seeks to implement a bonus-penalty system for unemployment contributions paid by employers, to encourage them to offer long-term contracts.
The urgent applications judge of the Conseil d’État observed that even though the economic context has improved over the last few weeks, there is still considerable uncertainty when it comes to how the health crisis and its economic consequences will develop and affect companies that make significant use of short-term contracts to meet temporary needs. Yet the new rules for calculating the unemployment benefits will significantly penalise workers in these sectors, as they do not choose the period of alternation between work and inactivity.
Whereas the reform plans to defer implementation of the bonus-penalty system for employer contributions to September 1st, 2022, because of the uncertainty of developments in the economic situation and job market, the new calculation rules for employees will apply from July 1st of this year. The urgent applications judge ruled that opposition is worthy of consideration due to the obvious error in the assessment resulting in immediate application of the reform for workers.
For this reason, application of the new rules for calculating the unemployment benefit for workers who lose their jobs from July 1st, 2021, has been suspended.
After this emergency ruling, the "in-depth" submission of the unions opposing the decree reforming unemployment insurance will be heard by the Conseil d’État within the next few months.
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