The State and the Reconstruction of Industrial Relations Institutions After Fordism: Britain and France Compared

5.4 The Debate over Work Time

The industrial relations developments noted in the last section were a precondition for the introduction of greater workplace and labor market flexibility in France. In the last two decades discussion of flexibility has come to dominate industrial relations, with changes in the institutions of industrial relations justified on the grounds that they facilitate greater flexibility. Two forms of flexibility have been the focus of attention: flexibility in the form of work contracts, with the issue being the extent to which temporary, fixed term and part-time contracts were permissible; and flexibility of work time, where debate centered upon the relationship between more flexible work time and reduced work time. In both cases, the obstacle to more flexible deployment of labor was state regulation rather than collective agreement. Thus the central question facing governments of the Right and Left was under what circumstances they would permit a deregulation of the labor market. They sought to permit flexibility so long as it was negotiated, which in turn depended upon the creation and legitimacy of firm level institutions for bargaining and dialogue discussed in the last section. Given the weakness of trade unions, this was always a delicate balancing act as the state could never fully withdraw from regulation of the labor market in the absence of strong, independent institutions of worker counter-veiling power inside the firm. The result was a tentative, crabwise process of introducing flexibility.

This section focuses upon work time because it came to dominate discussions of flexibility in the 1990s, and because it demonstrates most clearly the relationship between state intervention, industrial relations reform, and flexibility. Despite the derision that greeted the 35 hour work week legislation of Lionel Jospin's 1997 Socialist government outside of France, work time reduction was a bipartisan strategy, though operationalized in different ways. Faced with high levels of unemployment and having handed over control of monetary policy and exchange rate policy to European Union institutions, and with severe external constraints upon fiscal policy, creating employment through work time reduction was one of the few policy options available to French governments.. This argument is made by Gunnar Trumbull, “Policy Activism in a Globalized Economy: France's 35 Hour Work Week,” French Politics, Culture & Society, 20:3 (Fall 2002). For two decades after 1981, the recipe for modifying work time remained remarkably consistent: greater flexibility in the use of work time was offered to employers in return for a reduction in overall work time and a requirement that collective bargaining be the privileged mode of implementing changes in work time. While governments of the Right emphasized voluntary work time reduction and widened opportunities for work time reduction to be combined with great flexibility of work time, governments of the Left made work time reduction mandatory and tried to regulate the forms of flexibility that it accompanied. But what all legislation on work time in the 1990s shared was a requirement that a precondition for flexibility was collective bargaining or some alternative form of social dialogue at the level of the firm. Thus widespread changes in work time required an expansion of the decentralized industrial relations institutions that had begun to emerge in the 1980s in response to the Auroux Laws. Every government initiative in the area of work time was accompanied by an increase in the quantity of firm-level bargaining.

The Socialist government elected in 1981 had promised a reduction in the work week to 39 hours, and bargaining took place between employers and unions on the implementation of that pledge. That bargaining was short-circuited, however, by legislation in 1982 that reduced the work week, provided a fifth week of vacation time and required full compensation to workers for reduced working time. It did provide, however, an additional 130 hours over the legal limit to be worked without administrative authorization so long as the outcome was collectively negotiated. After this experience, employers shifted their focus from national bargaining with unions to firm level bargaining where unions were weaker (and agreements could be signed with minority unions), and where the 1982 work time reduction legislation (presaging the later Auroux Law in this regard) permitted derogation from legislation and branch agreements. The effects were two-fold: first a spike in the amount of firm level bargaining; and second, agreements that provided far more flexibility to employers than reduced work time or alternative forms of compensation for workers.. Howell, Regulating Labor, p. 194.

Work time reduction re-appeared on the legislative agenda at the beginning of the 1990s. In fact, as early as 1992 the Socialist government proposed offering reduced social security charges to employers in return for work sharing in the form of part time work and reduced hours, to be based upon a model agreement. But the real impetus came from two pieces of conservative legislation. In 1993, the Five-Year Employment Law of the Balladur government permitted much greater flexibility in work-time, with particular emphasis upon encouraging part-time work and the annualization of hours, in return for minimal work time reduction. Agreements had to be signed at the firm level, and offered reduced social security charges. The Robien Law of 1996 went further, making it easier to reach agreements on flexible and reduced work time, and offering a more generous reduction in social security charges in return for agreements that promised either to create new jobs or save existing jobs. This legislation had a particularly large impact on part-time employment because reductions in social security charges were available for the creation of part-time jobs, or the transformation of a full-time job into a part-time job if that lead to the creation of a new job. Jenkins has argued that the Robien Law had a “dynamic role in workplace experimentation and negotiation” and “catalyzed a search for broader organizational flexibilities.”. Jenkins, Employment Relations in France, pp. 165-66, emphasis in the original. As with the Auroux Laws, state action amounted to a forced modernization of employer practices in a manner that promoted post-Fordist restructuring.

This was the backdrop to the more radical proposals of the Socialist government elected in 1997 on a pledge to reduce the work week to 35 hours. What emerged was a three-stage process: first a law (Aubry I) in 1998 setting out the terms under which voluntary work time agreements could be reached; then a 2000 law (Aubry II) that made work time reduction mandatory, where agreements had not already been reached, for firms employing 20 or more workers; the third stage, to be implemented in 2002, would apply the legislation to smaller firms.

Aubry I permitted a large assortment of ways in which work time reduction could be introduced - including annualized hours, a shorter work week or work day, longer vacation periods or additional days off - and enormous flexibility in the use of work time as long as the result was the product of collective bargaining.. Supiot, Beyond Employment, p. 82. The experience of the voluntary agreements reached under Aubry I also demonstrated that employers were less interested in the reduction in social security charges than in flexibility in the implementation of work time reduction. As a result, Aubry II permitted greater innovation in the forms of flexibility permissible, so long as the outcome was subject to a collective agreement. Indeed, Aubry II provided very strong incentives for reducing work time through collective bargaining.. Without a collective agreement, the reduction in work time had to be on a monthly or weekly basis, but with an agreement there were a range of other options, including annualization, a wage increase offset against overtime, additional days off, and so on. The existence of a collective agreement also permitted a simplified layoff procedure. The reduction in social security charges was also only available if a collective agreement was reached, and signed by one or more unions that had received a majority of the votes in the last works council election; agreements signed by minority unions were valid but could not benefit from the reduced charges.

The legislation also sanctioned the use of the mandating procedure and other alternatives to traditional collective bargaining. In smaller firms where there was no union delegate, firm-level agreements could be signed on behalf of employees by a worker who was either mandated to sign by one of the five national trade union confederations or, if not mandated, the resulting agreement had to be approved by a majority vote of employees and approved by a local labor-business commission.

What have been the results of the legislation? First, it should be noted that when the Right swept to power in 2002, it did not repeal or suspend the work time reduction legislation, despite a great deal of criticism from employers in general, and employers in small firms in particular. Some provisions of the Aubry legislation relating to compensation for overtime work, the calculation of working time for managers, and the application of annualized working time were relaxed,. “New Law Relaxes Implementation of 35-Hour Week,” European Industrial Relations Review, 346 (November 2002). permitting a wider scope and greater flexibility for employers and unions to negotiate the terms of work time reduction agreements. But the limited changes implemented by the Right suggest that the Aubry Laws had a less deleterious impact upon firms than anticipated.

Second, the impact upon firm-level collective bargaining has been undeniable. The number of firm-level agreements signed each year remained stable from 1987 until 1993 (after rapidly rising in the aftermath of the Auroux Laws), then increased steadily between 1993 and 1998, roughly doubling during that period. The number of agreements then accelerated sharply after 1998, increasing from a little under 15,000 a year to 35,000 a year between 1999 and 2002.. “Bilan 2001 de la Negociation Collective,” Ministere des affaires sociales, du travail et de la solidarite, p. 2, but note that there was a change in methodology in 2002 that makes comparison with earlier years difficult. Work time was reduced in two phases: prior to 2000, firm level agreements led to reduction, while in 2000 and 2001, the changeover to 35 hours was much more likely to result from the direct application of a branch agreement in the absence of firm-level bargaining.. “Government Issues Assessment of 35-Hour Week Legislation,” EIROnline, at www.eiro.eurofound.ie October 24, 2002.

Third, it is difficult to know who exactly was signing agreements, and how representative of employees they were. The mandating procedure was widely used for firm-level work time agreements; fully 70% of such agreements were reached using this procedure in 2001, and unsurprisingly, the smaller the firm, the more likely it was to reach agreement without the signature of a union delegate. The promise that mandating would open non-union firms to unionization does not appear to have been fulfilled.. Trumbull, “Policy Activism in a Globalized Economy,” p. 31 (of Brookings version). Even in 2002, when only a third of agreements dealt with work time reduction, less than half of firm-level agreements were signed by a union delegate, the rest being the result of mandating, ratification by employees, or signature from a firm-specific body.. “Collective Bargaining in 2002 Examined,” EIROnline, at www.eiro.eurofound.ie September 25, 2003. At the branch level, a large number of agreements were signed - 112 of 180 bargaining sectors had work time reduction agreements by October 1999 - but they tended to be signed by a small number of unions. By mid-1999, only 22% of branch agreements had been signed by either all five confederations or by four of the five. 33% had been signed by only one or two national unions.. Steve Jefferys, “A `Copernican Revolution' in French Industrial relations: Are the times a' Changing?” British Journal of Industrial Relations 38:2 (June 2000), p. 50.

Finally, work time reduction has been accompanied by work time flexibility, and with it, work reorganization. Firms have taken advantage of the wide range of options for how to introduce reduced work time, and how to calculate work time, so as to experiment with different kinds of shift work, and scheduling that corresponds better to demand. In this respect, the widespread introduction of annualized hours - more than a third of employees saw their work time reduced in this way. “Government Issues Assessment of 35-Hour Week Legislation,” EIROnline, at www.eiro.eurofound.ie October 24, 2002. - offers tremendous flexibility to firms. By creating a greater financial disincentive to use overtime, the 35 hour week legislation forced employers to contemplate a more fundamental reorganization of work.

5.5 Reforming the Welfare State

Developments in the reform of the welfare state are important in their own right with respect to a post-Fordist restructuring of the French economy; impacting greater flexibility to the labor market both required structural reform of elements of the particular mix of Bismarckian and Beveridgian (sic?) welfare states in France to permit greater flexibility, and it also created the need for an expansion of the social safety net to manage the greater social dislocation resulting from a more flexible labor market. At the same time, the reform of the industrial relations system had important implications for the welfare state. For that reason, it is impossible to separate out social policy from projects of industrial relations reform. Here, I will simply draw attention to some of the linkages between the restructuring of industrial relations institutions, the encouragement of flexibility in the labor market, and welfare reform. These are more in the form of paragraph headings than developed arguments.

First, welfare policy emerged as a central element of economic restructuring. Policies covering early retirement, access to job (re)training, unemployment benefit, and the social control of youth unemployment controlled entry and exit from the labor market, and as restructuring accelerated in the second half of the 1980s, a bewildering alphabet soup of new programs emerged to manage the labor market.. Jefferys, Liberte, Egalite and Fraternite at Work, has two useful tables (tables 5.5 and 5.6) on pages 146 and 148, that list both the different functions of French welfare programs, and the main innovations after 1981. At the same time, increasing flexibility in the labor market, particularly the expansion of “precarious” or “atypical” jobs, created new burdens for the state because these new kinds of employment relationship were rarely covered by the existing joint employer-labor run social security schemes. Thus the state stepped in with new programs and new forms of financing to cover these groups. In this respect, post-Fordist economic restructuring created new needs and strains which only the state was capable of shouldering.

Second, welfare reform was implicated in the reconstruction of industrial relations institutions because the state could hold out welfare reform as bait to encourage employers and trade unions to engage in the kinds of social dialogue that the state was seeking. Thus, as we shall see below, every state initiative in the realm of reducing work time involved offering a reduction in social security contributions to employers in return for reaching collective agreements. However, it is interesting to note that the experience of the 1990s suggests that, despite vociferous complaints about the burden of these contributions, employers were far more likely to respond to the opportunity to introduce flexible forms of work time than to reduce their social security contributions. The French state could only rarely force employers and unions to bargain; but its central position in the organization of the welfare state permitted successive governments to offer welfare reform as an inducement to reform in the sphere of industrial relations.

Thirdly, employers were also capable of using welfare reform to encourage the emergence of forms of industrial relations that they favored. The principle of paritarisme was enshrined in much of the French social security system. Beginning in the late 1990s, MEDEF sought to tie negotiations over the reform of these welfare institutions to industrial relations developments. Trade unions could be brought to the bargaining table on this issue because of their heavy reliance upon the institutional and financial resources that derived from jointly-managed welfare institutions. To a large degree, French unions subsidized their industrial relations activities with resources from welfare institutions, making them uniquely vulnerable to employer threats to unilaterally quit such institutions.

5.6 The Transformation of French Industrial Relations

The last two decades have seen two intimately related developments in French industrial relations: the evolution of a system of decentralized, firm-level micro-corporatist bargaining; and the replacement of labor market and workplace rigidities with a high degree of flexibility, accompanying and making possible a post-Fordist restructuring of the French economy. These developments are connected in two ways. First, the former made possible the latter, as the shift in the locus of labor regulation away from direct legislative and administrative rule-making and high-level collective bargaining permitted the spread of flexibility. Second, both developments were dependent upon a continuing, activist role for the state.

This has not been a simple story of state withdrawal from industrial relations, with private industrial actors taking over responsibility for regulating the relations between business and labor. Rather, institutional developments have been driven by state actors, and to the extent that firm-level bargaining takes place, it is largely underwritten and guaranteed by the state. Despite its best efforts, the French state has been unable to withdraw from its central role in regulating industrial relations. Autonomous and self-sustaining collective bargaining has never occrred; each instance of its invigoration depended upon an active role by the state in promoting social dialogue. It is important to emphasize “the roles that French elites have played in stimulating and promoting innovation during the last thirty years,”. Jenkins, Employment Relations in France, p. 206. and to recognize the “extremely important catalytic effect of the law.”. Ibid., p. 165. Paradoxical as it may sound, creating the institutional conditions for post-Fordist economic restructuring has been a state-led process in France.

Again and again, state actors have created legal obligations in the sphere of industrial relations which have the effect of forcing private actors to construct firm-level institutions that permit social dialogue: the Auroux Laws created an obligation to bargain and to enhance communication within the firm through expressions groups and consultation with works councils; social plans required discussion between employers and worker representatives on alternative forms of economic restructuring; the reduction of the work week “was held out as bait” in the process of “state modernization of industrial relations.”. Jefferys, Liberte, Egalite and Fraternite at Work, p. 142. It is not that employers have not been important actors in this process - indeed employer organizations have become progressively more politicized and radical in their efforts to re-shape industrial relations - but institutional reconstruction could not have taken place without the state, and employers were often hostile and resistant to state initiatives that had the effect of forcing them to modernize their industrial relations practices.

Shrinking trade union membership, union dependence upon employers, and the process whereby firm level agreements can be signed by non-union employees and representatives of firm-specific employee institutions, contribute to the emergence of micro-corporatism in which, without access to resources and capacities beyond the walls of the firm, workers are likely to engage in “wildcat cooperation” with their employers.. This is Wolfgang Streeck's famous formulation, “Neo-Corporatist Industrial Relations and the Economic Crisis in West Germany,” in John H. Goldthorpe, ed., Order and Conflict in Contemporary Capitalism (Oxford: Clarendon Press, 1984). Set alongside the expansion of firm-level bargaining and the ability of local agreements to derogate from legislation and branch agreements, this has been an institutional environment conducive to the negotiation of flexibility.

In the1970s, even as the much-vaunted planning process began to deteriorate,. Hall, Governing the Economy, chapter 7. France remained the archetypal dirigiste, heavily regulated economy, and nowhere more so than in the sphere of the labor market. The organization of work, the deployment of labor, wage levels, and exit and entry into the labor market were all subject to administrative regulation. The last twenty years have seen a remarkable “acceleration of changes” in work organization and the labor market,. Jenkins, Employment Relations in France, p. 63. the net effect of which has been to introduce high levels of flexibility. This has been apparent across a range of areas: the diffusion of individualized payment arrangements; the spread of total quality programs of various types; dramatic increases in contractual flexibility that have led to a large expansion in the number of workers on part-time, temporary or fixed-term contacts; and, of course, the opportunities for reorganizing work made possible by flexible work time.. The best source for the spread of various forms of flexibility in France is Jenkins, Employment Relations in France, chapters 4-6. Page 115 has a table showing the individualization of wages, and pp. 174-176 have tables showing the rise in number of “precarious” jobs. In all these areas, state intervention has under-written change, either by creating the institutional preconditions for negotiating flexibility, or by providing strong incentives for firms to introduce flexibility. The common theme to all these developments has been state-led modernization of industrial relations practices.

The response of the main French employers' organization has been to call for more radical decentralization and flexibility than is currently permitted under French law, and at the same time to try to insulate industrial relations developments from state regulation. MEDEF's “refondation sociale” emphasized giving priority to the firm, generalizing and decentralizing collective bargaining, and ensuring the autonomy of bargaining from the state.. Michel Lallement, “Public Action and Industrial Relations in France: About Some Recent Changes,” paper presented at the conference on “Transforming the Democratic Balance among State, Market and Society,” Harvard University, May 17-18, 2002, p. 7. It has proposed new forms of limited-time employment contracts, exempt from current restrictions, a further relaxation of the principle that firm-level agreements can only improve on branch agreements, and the primacy of collective bargaining over legislation.. “Government Plans Collective Bargaining Reform,” EIROnline, at www.eiro.eurofound.ie April 14, 2003. But however radical the employer projects of industrial relations reform, the fundamental problem remains the weakness of worker organization in the workplace. The result is that, in the absence of a state role as guarantor of change, decentralization and deregulation would amount to little more than the creation of space for unilateral employer imposition of post-Fordist restructuring.

6. Conclusion

By the end of the 1990s the political economies of Britain and France had been transformed, in part as a result of radical projects of state institutional reconstruction that began in the early 1980s. This transformation took place along several dimensions but none was more important than in the realm of the labor market and institutions of industrial relations. In both countries labor markets inherited from the past has exhibited high levels of rigidity, either because of the workplace power of decentralized trade unionism or the regulatory role of the state. Yet within two decades, remarkable degrees of labor market and workplace flexibility had appeared.

This paper has argued that the introduction of flexibility was only possible because of the reconstruction of the institutional architecture of industrial relations in the two countries. Broad shifts in the growth regime put a premium upon greater flexibility and made the existing institutions of industrial relations, formed during an earlier period, and designed to manage Fordist growth, increasingly dysfunctional. Even as employers in both countries became aware of emerging growth conditions, their ability to introduce flexibility of various kinds into the workplace depended upon a fundamental reform of the institutions of industrial relations. Post-Fordist economic restructuring was hostage to institutional reconstruction.

By virtue of a set of capacities not enjoyed by private industrial actors, transforming the institutions of industrial relations required a central role for the state in these two countries. The reform projects were different in the two countries, primarily by virtue of the legacy of different sets of inherited industrial relations institutions: in the British case, the logic of institutional change was decollectivist while it was microcorporatist in France. But the British and French states performed a number of analogous tasks in the process of institutional reconstruction. First, they helped to dismantle existing industrial relations institutions by both removing the legislative supports that underpinned them and seeing off challenges from trade unions when they sought to defend existing institutions and practices. This was most marked in the British case where a powerful labor movement was cowed by restrictions put upon its ability to strike, mechanisms to extend the impact of collective bargaining were limited or removed, and major challenges to the state in the form of strikes were defeated, most notably in the case of the 1984-85 mineworkers strike. In France, where inherited forms of labor market rigidity were largely the product of state regulation, dismantling regulation awaited the construction of new workplace industrial relations.

The second task performed by both states was to create the space and the institutional conditions for the emergence of new industrial relations practices favored by employers. In Britain this followed naturally from the decollectivist thrust of Conservative policies in the 1980s, and for the most part legislation was facilitative only, permitting employers to choose how to organize social relations inside the firm. The New Labour government was more proactive in this area, encouraging the emergence of “partnership” in the firm through a combination of persuasion, incentives, and legislation. The strategy was to provide workers with a set of minimum rights and protections at work that would encourage the exercise of voice, though this strategy was often at odds with the priority given to labor market flexibility. In France, the state played a much more central role in the construction and embedding of new industrial relations institutions and practices. The Auroux legislation and the subsequent linkage between flexibility and decentralized negotiation had an explicitly microcorporatist logic, emphasizing the emergence of institutions within the workplace, and bestowing legitimacy upon new forms of employee representation, that encouraged firm-specific negotiation. The effect was a forced modernization of employer industrial relations practices.

The third task involved the provision of incentives to employers and unions to take advantage of the new institutional architecture in order to permit the emergence of greater workplace and labor market flexibility, or at least to minimize resistance to it. In the British case, successive Conservative governments offered little by the way of compensation or incentives to trade unions but New Labour did seek to compensate unions and workers for increasing labor market flexibility and insecurity with a set of legal protections and new rights for union activity. These were linked rhetorically to the emergence of a modernized, more partnership-oriented labor movement. In France, it was not only workers and unions, but also employers who were dubious about industrial relations reform, and here the role of the state in encouraging compliance was more central. Throughout the 1980s and 1990s the welfare state was used in this manner as governments of both the Left and the Right offered incentives and compensation in the form of reduced social security charges for employers and a panoply of new forms of social protection for workers. Employers were promised exemption from labor market regulation while unions were guaranteed a role in negotiating flexibility, and workers were offered reduced work time.

A fourth task has been only alluded to in this paper, but it was no less important. It was to narrate economic and social crisis in such a way as to build public support for the reform of industrial relations. This task was quite straightforward in Britain because of the experience of the Social Contract and the Winter of Discontent that brought the Conservative Party to power. The perception of over-mighty trade unions, abusing their political and industrial power, smoothed the way for a decollectivist reform of industrial relations that directly targeted the collective strength of labor. In France, the legacy of May 1968, the weakness of the union confederations, the rivalry between the Socialist and Communist Parties, and the longstanding hostility of employers to sharing power inside the firm, made the crafting of industrial relations reform enormously complicated for the Socialists after 1981. The discursive and institutional plasticity of the Auroux legislation, with its ability to point simultaneously towards radical autogestion, conventional collective bargaining, and modern managerial personnel practices, created political space for a microcorporatist reconstruction of French industrial relations.

There are obvious dangers in emphasizing the centrality of the state in this process of institutional reconstruction. In neither country did states act alone, nor was the motivation behind reform projects always narrowly economic in the sense of being driven by the imperatives of bringing industrial relations in line with the imperatives of post-Fordist restructuring. States are rarely unitary actors such that competing projects may exist in different state agencies, nor are they omniscient, able to discern economic imperatives that are opaque to private actors. And state autonomy is implausible in capitalist economies.

In both Britain and France, industrial relations reform was driven in part by political and electoral considerations. The French Socialists, while intellectually committed to labor market flexibility from the late 1980s onwards, were forced to maintain both a rhetorical and substantive commitment to protecting workers from the social consequences of flexibility. The 35 hour work time reduction was at least as much a product of a search for a political response to unemployment that was acceptable to its supporters as a desire to encourage post-Fordist restructuring. Similarly, the British Conservatives were prevented from seeking an accommodation with the labor movement that might lead to an alternative form of economic restructuring by the centrality of hostility to unions in the political lexicon of Thatcherism. These political and electoral calculations help to explain why the French state was less successful than its British counterpart in distancing itself from the outcomes of industrial relations reform, why it found itself heavily involved in managing industrial relations throughout the period under review, and why French workers appear to have received more protection, in the form of compensating social programs or continued legislative regulation of the labor market, than British workers.. Note also that increased labor market flexibility does not appear to have been accompanied by markedly greater levels of income inequality, in contrast to the British case. See Mark Vail, page 30 of chapter 5 of doctoral dissertation.

Nonetheless, the fact that governments are motivated by political considerations should not distract attention from the manner in which industrial relations reforms can develop an economic coherence and point in the direction of a particular economic logic. The manner in which the Auroux reforms had a series of unintended consequences that had the effect of encouraging the emergence of microcorporatist elements while limiting the development of articulated collective bargaining illustrates the manner in which political projects are shaped by the institutional and class context within which they are attempted. In a similar way, the more distinctive “Third Way” components of New Labour's industrial relations reforms always lost out when they came into conflict with the imperatives of labor market flexibility. One of the things that is striking in the two country comparison contained in this paper, is that differences in the reconstruction of industrial relations between Britain and France are consistently greater than the difference between the industrial relations projects of different governments in the same country. Thatcheriste and Blairite industrial relations are both fundamentally decollectivist, while Socialist and Gaullist industrial relations are both fundamentally microcorporatist. As the Regulation approach would suggest, institutional legacies and the imperatives of post-Fordist restructuring shaped the reform projects of governments in ways that often overwhelmed political motivations.

In both Britain and France, changing employer interests, and the political mobilization of employers helped to shape the reform projects of governments. Employer mobilization was most marked in France, primarily in response to Socialist initiatives in the realm of industrial relations, and governments found themselves crafting legislation that provided enough incentives for employers to participate, hence the importance of the compensating elements noted above. In both the early 1980s (in response to the Auroux laws) and the late 1990s (in response to the 35 hour week legislation) the national employers' organization mobilized aggressively on behalf of flexibility. It has been radicalized in the course of the past two decades, though it is unclear to what extent it represents the views of employers, and has sought a more active political role in an effort to reduce state intervention on the part of both governments of the Left and the Right. Indeed, at times it became a kind of de facto liberal opposition party. British employers have had fewer differences with governments in the past two decades, in part because of Conservative electoral dominance and in part because the British Conservative Party is more neo-liberal than its Gaullist counterpart. Nonetheless, governments were in part responding to a shift in employer interests and a growing dissatisfaction with collective bargaining when they designed industrial relations reform in the 1980s, and the New Labour government has certainly been highly responsive to its perception of employer interests in maintaining labor market flexibility.

However, while employer pressure played some part in shaping state action, the state was the central actor in reconstructing industrial relations institutions for two reasons. First, employers were by no means united in a recognition of the need to reform industrial relations. In both Britain and France, employers were hesitant and often hostile to the reform process, concerned about disrupting established relationships with unions (in the British case) or creating opportunities for the development of independent worker-controlled institutions (in the French case). In both countries, the state led, introducing industrial relations reforms, often over the objections of employers, and only later did employers come to endorse those reforms. The state, in other words, anticipated employer acquiescence. That was the case for the Auroux legislation, for the six major packages of industrial relations legislation between 1980 and 1993 in Britain, for New Labour's introduction of a minimum wage and statutory recognition procedure, and even the 35 hour legislation: vociferous initial opposition from French employers gave way to wary acceptance after implementation. Vail has noted a “discrepancy between Medef's public reaction to the law and its private support for its provisions.”. Vail, page 22 of chapter 5 of doctoral dissertation. This helps to explain why the Aubry laws were not repealed after the 2002 electoral victory of the Right.

The state was also central to the reconstruction of industrial relations in both countries simply because these were not changes that employers could bring about without the aid of the state, even had they been aware of their interest in reform. In the British case, union opposition would have made institutional change highly conflictual, and in the French case, few employers were willing to see the creation of microcorporatist institutions inside their firms, both because of the challenge such institutions might pose to managerial authority, and because of the potential collective action problems had some but not all firms experimented with new social relations inside the firm. In neither Britain nor France would existing systems of industrial relations have been transformed had not the state taken the lead; and in the absence of these state projects of institutional reconstruction, post-Fordist restructuring would have been considerably more difficult and more socially conflictual.

Notes

This paper has enormously benefitted from comments on earlier formulations with numerous people. I would like to particularly thank Colin Hay, Dave Marsh, Jonah Levy, Mark Vail, David Coates, Kathy Thelen, Peter Swenson, Peter Gourevitch, John Kelly, Bruno Palier, and Joel Krieger.