The impact of globalisation such as free labour movement, capital investments, formation of international collectivist political economy like Europe has had impacts on the way employment relations are formulated and enforced in the economy. With more influence from US based businesses, France was more eager and quick in changing its stance on employment relations and provided more powers to employer, whereas Sweden has its reaction but it did not change must from its stand of being a social economy.
France’s history of economic freedom started with the occurrence of the July Revolution of 1830 where the King Charles X and a new economic liberated country were formed. France has been the first unified European state with deep rooted administrative and legal system (Browne, 1997). The country had insisted the sustenance of agriculture and experienced late industrialization.
The primary actor of the employment relation in France are the Medef, which is a mixture of employers’ organisation and business association, the CGPME, working along with Medef, and SNPMI, which is more militant and autonomous. France has a very low and declining union density which is a cause of concern for the welfare of workers and having less power in negotiations when required (Corby and Symon, 2011). In addition, it has weak organisational and financial resources, indicating that it’s over dependence on external funds and organisational support. France plays an important role as a social partner with employers’ organisations at national level, and also manages many social welfare funds of the state. France gives extensive individual rights to workers and right to strike is to be covered through collective agreement. It represents workers and with organisations and intervenes in reaching an amicable solution during conflicts. The Auroux Laws in 1982 and the Aubry working style laws has brought in many changes in the way workers manage their relation with employers (Corby and White, 2002).
The collective bargaining power in France is getting more qualitatively weaker. In contrast, the number of unions as shown in the chart below is getting less and weaker when collective bargaining is getting stronger. The state’s individual intervention in negotiating company and employment contracts has been increased lately which can set a bad example of government and state getting involved in business agreements (Cunningham, 2008). This has created a situation where employers and unions have not been able to make efforts in growing their relationship and have started to remain dependent on state intervention if they fail. This gives a weak signal to the international market and warns further investments due to an image of excessive intervention where it is disliked.
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