Social dialogue: greater transparency to build trust
The enabling bill authorizing the government to reform the labor code by decree has just been adopted by the National Assembly. However, we will have to wait until the end of August for the content of the decrees to be presented to the social partners.
Marie-Anne Verdier, University of Toulouse 3 Paul Sabatier; Christophe Godowski, University of Toulouse 1 Capitole and Emmanuelle Nègre, University of Montpellier
The stated objective of the new government is to decentralize social dialogue at the company level, reserving legislative intervention solely for fundamental rights. Beyond the doubts that may be raised about the relevance of such a project, it faces a major obstacle: the mistrust that currently prevails within many French companies.
A significant proportion of employees do not trust their managers.
80% of executives surveyed in a recent study believe that social dialogue is improving in their companies, but less than half of employees share this opinion. Only 55% of them feel they have a relationship of trust with their managers.
“They keep telling us that business is bad. They ask us to tighten our belts. But can we believe them? We have no way of checking, we're being led around by the nose...”
When we interview works council members, as we did in a study conducted throughout 2016, this lack of trust is obvious.
The situation is particularly delicate when job cuts are on the agenda, quickly turning into a power struggle. Managers are skilled in the art of presenting their company's financial results in a way that justifies their social policy. Jennifer Boutant and Marie-Anne Verdier, from the University of Toulouse, showed in research published last year that these professionals managed to significantly minimize the company's results (by an average of 4%) before announcing staff reductions.
Research by Emmanuelle Nègre and Marie-Anne Verdier, co-authored with Charles Cho and Den Patten, highlights the frequent discrepancy between the reasons given by managers to justify such operations and the company's actual economic situation.
Employee representatives are naturally suspicious of such manipulations, but are generally unable to decipher the accounts. The resulting mistrust is widespread and immediately reduces the possibilities for constructive social dialogue.
The company's situation is beyond the employees' control.
Since 1945, however, the law has allowed works councils to call on a certified public accountant to gain a precise understanding of the financial situation and rebalance the power relationship with management.
This call for an expert can be made not only during specific events, but also every year, as part of the review of the annual accounts. However, only about one in three works councils uses these accounting professionals.
How can we explain this low usage of a system that is, in principle, open to everyone?
The fact that companies must (rightly) bear the cost of these assignments is a hindrance, particularly in SMEs, which make up the bulk of the French economy.
Some leaders are dragging their feet and are tempted to put pressure on elected officials. They do not hesitate to resort to a form of blackmail by arguing, for example, that the money spent on this could be put to better use in paying bonuses.
In such a context of pressure and conflict, some elected officials prefer to focus on social and cultural activities rather than economic prerogatives. In large companies, it is more common for certified public accountants to work with works councils.
Although accustomed to the arrival of such experts, management is not enthusiastic about this exercise in transparency. That's a shame. When certified public accountants work regularly with employee representatives, we see a gradual improvement in the relationship between employees and management.
The former have a better understanding of economic issues and have certain cards up their sleeves when it comes to discussing company decisions. The latter may be interested in the insights provided by an independent expert. A certain level of trust then begins to develop, contributing to the establishment of a genuine social dialogue.
Such a development is not out of reach. Considering the involvement of financial professionals in works councils, not as a theoretical right but as a genuine necessity, means systematically informing elected representatives of this possibility.
Our research shows that the failure to use experts is sometimes simply due to a lack of awareness of the system. Improving the skills of elected representatives is now a major challenge in the attempt to rebalance the power relationship between managers and employees.
Marie-Anne Verdier, Associate Professor, University of Toulouse 3 Paul Sabatier; Christophe Godowski, Senior Lecturer in Management Sciences, IAE Toulouse, University of Toulouse 1 Capitole and Emmanuelle Nègre, Associate Professor in Management Sciences, Montpellier Research in Management, University of Montpellier
The original version of this article was published on The Conversation.