Muriel Pénicaud’s magic formula to fix France

PARIS — Muriel Pénicaud has found a way of subduing France’s combative unions without having to call in riot police: Kill them with consultations.

In an interview with POLITICO, the French labor minister said that before unveiling a radical reform of work rules in late August, she presided over 300 hours of closed-door talks with trade union bosses in her office.

The three-month negotiating marathon — which followed a plan that Pénicaud had designed and submitted to President Emmanuel Macron for approval — allowed her to zero in on union concerns, address them individually and head off conflicts before they exploded into public view.

The result was that the law, France’s most far-reaching reform in decades, hit the books in late October without protests bringing the country to a standstill.

“With the labor law, we mixed speed and intensity for the consultations, which are normally seen as opposites. We won seven to eight months because we wanted to have a structural reform whose effects will play out in the medium to long term, all while maintaining our consultations,” said Pénicaud.

French workers union CGT protests Macron’s labor law reforms in Nantes | Loic Venance/AFP via Getty Images

Now Pénicaud, a former HR director for Danone who honed her negotiating skills in the private sector, is training her mind on the next assignment: overhauling France’s job training, apprenticeship and unemployment benefit schemes.

These talks, which aim to modernize the labor market and combat unemployment, involve different players and more complexity. The government will submit a bill to parliament for debate, instead of ramming it through via executive decree as with the labor reform.

But Pénicaud plans to proceed in the same way to get the job done: by holding meticulous, exhaustive negotiations that leave no stone unturned and are carried out in total secrecy.

“There are different methods for each reform but the three trains will enter the station at the same time, in the form of a single bill,” said Pénicaud. Unlike the labor bill, which was passed via decree, this is a “normal piece of legislation. But what it has in common with the labor law is a very deep level of consultations ahead of time.”

The plan, as currently stated, is to complete most negotiations by the end of January, submit a bill to parliament by April and have a vote by the end of summer.

If that happens, France will have undergone what Pénicaud called a “Copernican revolution” in labor relations in less than two years, a rebuke to critics who argued that Macron would buckle under pressure from street protests and withdraw his laws.

Instead, Pénicaud’s team is hard at work doing what she called “after-sales service” — making sure the law is actually applied. The law is “only half the work!” she said. “Now what’s going to be very interesting is to see what happens within companies. In one month, I met 3,000 company bosses from small-, medium- and large-sized companies. With my staff, we’ve met more than 5,000 human resources directors across France.”

But Pénicaud knows how arduous the road ahead will be.

In order to overhaul job training and unemployment, the government must convince unions to give up some of the control they currently have over both systems. Negotiations will be non-stop and intensive, with all parties asked to hand in their conclusions by January.

“The key to success is to be able to allow companies to proposes many more apprenticeship positions. We need to have a Copernican revolution, in the most literal sense. Today, it’s young people and companies that have to adapt to the system. This relationship needs to be reversed,” she said.

When Pénicaud struck gold

Pénicaud’s lengthy experience with labor issues and her sense of timing explain why Macron chose her to carry out one of his presidency’s most sensitive missions.

A native of Versailles who got degrees in education and psychology, but did not attend the ENA school of public administration that educates so many of the French elite, Pénicaud worked as a regional administrator on job-training missions before entering the labor ministry for the first time in 1985.

After serving as an adviser to Socialist Martine Aubry, who was then labor minister, Pénicaud veered into the private sector and held a series of high-profile human resources positions, including for Dassault Systèmes, a maker of 3D programs. “That’s where I get my understanding of how companies and social relations really work,” she said.

“More and more of our citizens are aware of developments in globalization, which has often been seen as a risk. Let’s seize them as opportunities” — Muriel Pénicaud

A big break came in 2008, when Pénicaud was named global director of human resources for Danone. Awarded stock options at her hiring, she exercised them four years later after presiding over 900 layoffs, a downsizing that sent company shares rocketing upwards.

Pénicaud cashed in more than €1.1 million — a windfall she had to defend in parliament in July, accused of profiting from workers’ misery.

All those years facing unions in the private sector are paying off as Pénicaud applies lessons to her current task. “It’s the method that I proposed, which is the fruit of my experience. Emmanuel Macron and Edouard Philippe trusted me.”

But while negotiations count, she said that her government’s ability to achieve success had as much to do with Macron’s election on a platform of change and growing acceptance of change among the French.

Pénicaud says her experience in the private sector gave her an “understanding of how companies and social relations really work” | Joel Saget/AFP via Getty Images

“More and more of our citizens are aware of developments in globalization, which has often been seen as a risk. Let’s seize them as opportunities,” she said. “They realize that we can’t live gazing into the past, but that in order to be ready for changes to come, it’s better to anticipate them to avoid being subjected to them. All of these things contribute to a certain social acceptance, even if there are still expectations and fears.”

After pulling off labor reform, it seems little can stop Pénicaud as she takes on her next challenge. That is, unless legal troubles interfere with her plans.

Investigating magistrates are currently looking into claims that Pénicaud, in her previous job as head of the Business France lobby, attributed a €289,000 no-bid contract to the Havas PR agency. If Pénicaud is placed under formal investigation in that probe, she will have to step down, under rules that Macron has imposed on all his ministers.

The minister, who denies all wrongdoing, declined to comment on the case.

Original Article

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