French employment plan set to boost number of older workers

On 6 June 2006, the French prime minister, Dominique de Villepin, announced a new National Employment Plan for older workers. It aims to increase the employment rate for workers aged between 55 and 64 to 50% by 2010.

France currently has one of the lowest employment rates for older workers in Europe. In 2004, only 37% of employees aged between 55 and 64 were in employment, compared with 57% in the UK and 45% in Germany.

The National Employment Plan has three main aims. The first is to “give everyone an opportunity to continue working beyond retirement age, or to better manage the transition between work and retirement”.

The French government intends to achieve this by putting an end to compulsory retirement before 65, which is currently set out in many collective bargaining agreements. It also proposes to phase out the Contribution Delalande, which is a charge levied on employers that dismiss employees over 50 years of age.

The second aim is to retain older workers in the employment market. De Villepin believes that it is essential “to make it easier for those who have been unemployed to return to work”. The government will create a new fixed-term contract usable for workers aged over 57 who have either been looking for a job for at least three months or have been registered with an unemployment fund scheme that allows staff to retrain. The contract will have an initial duration of 18 months, and may be renewed once only.

Finally, the plan seeks to allow employees to work longer. A ‘progressive pension’ will allow staff aged over 60 to do part-time work, while still being entitled to benefit from a portion of their pension. There will also be greater scope for maximising pension contributions.

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