Cafe-owners in uproar over 35-hour week ruling

20th October 2006, Comments 0 comments

PARIS, Oct 19, 2006 (AFP) - A French court ruling that the 35-hour working week must apply in hotels, bars and restaurants triggered uproar in the hospitality industry Thursday, amid dire warnings that it will impoverish staff and jeopardise many struggling businesses.

PARIS, Oct 19, 2006 (AFP) - A French court ruling that the 35-hour working week must apply in hotels, bars and restaurants triggered uproar in the hospitality industry Thursday, amid dire warnings that it will impoverish staff and jeopardise many struggling businesses.

On Thursday the country's highest administrative court — the state council — decided that a 2004 deal under which the 850,000 employees in hotels, bars and restaurants can work 39 hours a week instead of 35 contravenes the key reform of the last Socialist Party (PS) government.

The decision left an estimated 200,000 businesses in legal limbo, uncertain over the costs of implementing the measure, as staff expressed fears that they will see their already low-level incomes shrink still further.

For many cafe-owners and restaurateurs, the ruling was a third blow — coming on top of President Jacques Chirac's failure to win from the European Union a cut to 5.5 percent of valued added tax, as well as an upcoming ban on smoking in public places.

"Have they got it in for us, or what? We feel like we're the outcasts of the state. There are going to be heavy, heavy repercussions — insurmountable ones," said Jean Pournin who employs four people at the Restaurant d'Angleterre in the Mediterranean port of Nice.

Under the 2004 decree hotels, restaurant and bars enjoyed a dispensation from the 35-hour week on the grounds that the industry needs a flexible labour structure. Staff were not paid at overtime rates for hours after the 35th, but instead had an extra week of holiday that could be exchanged for more pay.

But responding to an appeal from the CFDT union, the state council said the arrangement is illegal because there is no reason in law to regard the catering trade as an exception.

It means that employers will be obliged to pay overtime rates for supplementary hours worked — at an increase of 25 percent for establishments with more than 20 staff and 10 percent for the rest. On the other hand the extra week of holiday disappears.

In addition, as the ruling is retrospective staff could be entitled to nearly two years of back payments.

Opponents of the ruling — who include the centre-right government of Prime Minister Dominique de Villepin as well as employers and several trade unions — said that the worst affected could be low-paid bar staff, who could see their income actually fall.

Owners warned that the change would make it even harder to attract workers to an industry that is already critically short of staff. It would also mean shortened rosters with the possible loss of opening hours.

"This is a unique situation because for the first time ever a union has actually acted to bring down the buying power of its members, especially those in small establishments who will see their pay cheques get smaller," said Andre Daguin, who heads the Union of Hospitality Trades (UMIH).

Small Businesses Minister Renaud Dutreil told Le Monde newspaper that "the state council's decision makes everyone the loser", while an alliance of unions including the powerful Workers' Force (FO) said "the ruling is catastrophic for everyone."

However supporters said that if employers "play the game" and strictly apply the 35 hour week, then new jobs will be created.

With just six months till France's presidential elections, the row reawakened divisions over the 35 hour week — introduced by the Socialist Party in 2000 — which the right-wing hopeful, Interior Minister Nicolas Sarkozy, says has damaged the work ethic and driven down salaries.

The opposition PS has pledged to extend it, despite some misgivings from its frontrunner for the presidential nomination, Segolene Royal.

Villepin called Thursday for immediate negotiations to find a new deal in the sector to take account of the ruling.

Copyright AFP

Subject: French news

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