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Commentary: `I'm Shocked! There Are People Working In Here!'


International Business: COMMENTARY

COMMENTARY: `I'M SHOCKED! THERE ARE PEOPLE WORKING IN HERE!'

Imagine a country where a chief executive could be jailed because his managers work more than 39 hours a week without overtime pay or compensating time off. These aren't factory workers, but the well-paid people who in most countries rack up workweeks of 50 hours or more in offices and rarely take their full vacation. Where might that kind of regime earn the boss a prison term? Mais, c'est la France!

As the Socialist government of Prime Minister Lionel Jospin debates a 35-hour workweek, France has focused much attention on working hours. Officials are now enforcing the current 39-hour rule, which applies even to managers, with renewed vigor. The labor-market police unit, the Inspection du Travail, has been raiding companies to catch finance managers, engineers, software programmers, and marketing executives who, in violation of the law, work past 7:00 p.m. without keeping records of their overtime--and without compensation. Quelle horreur!"FASCISM?" Thousands of citations have been issued, threatening CEOs with fines up to $1 million and maximum jail terms of two years. Electronics giant Thomson-CSF, furniture maker Ikea, and retailer Auchan have been forced to introduce time clocks for managers. In Thomson's case, such a move settled 6,057 citations in December.

At telecom giant Alcatel Alsthom, management protested in early March. In raids on subsidiary Alcatel CIT, inspectors interrupted executives with clients and harassed engineers, who complained they were brutishly herded into an interrogation area. Alcatel's managers denounced the "administrative fascism" of the union leaders who invited the inspection and the officials who conducted it, comparing their behavior to that of Nazi storm troopers. The union, the CFDT, which is loosely aligned with the governing Socialists, has sued for defamation.

With unemployment stubbornly high, the Jospin government's response is to redistribute work. And because that is considered the moral thing to do, Paris has considerable backing. But divvying up the pie into ever smaller pieces seems to be the sum total of the Socialists' creativity.

It's a sad tally. The intent of the 35-hour workweek and the raids is to force new hiring. If you have to pay a software engineer 100% more because he works 60 hours a week, why not hire another engineer? But dividing up existing wealth won't create new wealth. Controls on the labor market won't encourage companies to invest or startups to launch businesses. "The government has to think more about the needs of a service economy," says Bernard Dufau, president of IBM France. "They're imposing more rigidity when what's needed is flexibility."

The false assumption is that France's economy can operate in a vacuum. How should Thomson-CSF compete with Lockheed Martin Corp. when U.S. managers can log 60-hour weeks for a fixed salary? While Thomson's managers take weeks of compensatory time off, rivals will eat their lunches.TREADMILL. Indeed, a rising number of French workers are bolting for opportunities abroad--where managers might put in 12-hour days but reap a pile of stock options. Foreign companies provide incentives for hard work, instead of relegating workers to a treadmill that honors the lowest common denominator.

If reason prevails, lawmakers will separate managers from hourly workers as they debate the 35-hour workweek. Labor Ministry officials, taken aback by the aggressive raids of workplace inspectors, acknowledge the need for separate rules for managers. Industry leaders hope to break the straight-line equation between hours and compensation. Instead of paying overtime for hours in excess of the limit, companies would offer a package of benefits, such as training programs and additional vacation days, for a manager's more demanding duties. In 1984, IBM France negotiated an agreement like this. Under it, managers can receive two or three days per quarter in extra vacation, at the discretion of their superiors, for excessive overtime.

French managers are no strangers to overtime. One survey indicates that half of them work more than 46 hours a week--and 25% more than 51. Accordingly, some unions say managers should get an additional five to six weeks of vacation a year, bringing the total to 10 to 12 weeks--almost one week in four. Imagine how many companies would remain in France then.By Gail Edmondson


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