The French CDD, the most protective and most precarious employment contract in Europe

THE ECO SCAN / INTERACTIVE CONTENT – French employees on fixed-term contracts are much better protected than their European counterparts, but much less than their compatriots on permanent contracts. In addition, the French model is not the most efficient at converting temporary employment into permanent employment.

On Tuesday, the government claimed its choice to focus on the temporary contract (), against one previously for a period of 18 months, because that is where the jobs created come from (86% of hires were on fixed-term contracts at the end of 2014). The majority of developed countries already allow the renewal of fixed-term contracts more than twice, and above all authorize a maximum cumulative duration of successive contracts (renewals included) well above the 18 French months.

The French model, very restrictive despite the government’s desire for flexibility, is a special case, as pointed out. France is, just behind Portugal, the country which protects the most its employees on fixed-term contracts during the term of their contract. However, it is also the country where the gap in worker protection is the largest between CDD and. It should be remembered that in France, as in all of Europe, temporary employment remains in the minority (16% of total salaried employment in France in 2014).

“Barring serious misconduct, it is almost impossible for a French company to end a fixed-term contract before the end of the contract while a permanent contract can be interrupted at any time for real and serious fault,” explains Andrea Bassanini, senior economist in the Directorate for Employment, Labor and Social Affairs of the OECD. Before the end of the contract, the CDD is therefore in a certain way more protective than the CDI ”. In addition, when the fixed-term contract comes to an end, the company must pay the employee a precariousness bonus equal to 10% of the gross remuneration received throughout the duration of the contract. A higher premium, for comparable length of service, than the legal severance pay for a permanent contract (in the case of a non-unfair dismissal). Along with Portugal, France is the country where the cost for companies to complete a fixed-term contract is the highest.

In France the CDD is precarious compared to the CDI

But it is also one of the countries where the gap in worker protection is the largest between CDD and CDI. A stark contrast if the company chooses not to renew the fixed-term contract or to transform it into a permanent contract. It is then very difficult for the employee to dispute this decision, and more precisely “to show that the motivations of the company are due to reasons other than those of productivity”, explains Andrea Bassanini. If he brings the dispute to labor, for example in the case of unfair dismissal or discrimination, even if he wins his case, the compensation will be much lower for a CDD than a CDI.

Finally, France is one of the countries where the conversion rate of CDD to CDI is the lowest. Over a three-year period, only 21% of employees switch from temporary to permanent employment, compared to an average of around 37% in Europe. And for good reason: fixed-term contracts are generally very short. 35% last less than three months, 44% last three months to a year and only 21% last more than a year. In Germany, where temporary employment more often turns into permanent employment, the breakdown is the reverse: only 4% of fixed-term contracts last less than three months, and 56% last more than a year.

“The fairly restrictive limits on the duration of fixed-term contracts are not the solution,” said Andrea Bassanini, citing the countries of Northern Europe and most of the Anglo-Saxon countries which do not set a limit, and where the courts determine in case by case the misuse of fixed-term contracts. “The more rigid the system, the more difficult it is to get a new job, the more importance is given to security,” explains the economist. This harms the CDD, because we prefer a stable and less interesting job to a well paid and interesting job ”.