France's biggest union in crisis as chief criticized over perks

Calls follow leaks of costly work on flat; severance pay
By Nicholas Vinocur and Emmanuel Jarry/Reuters
|labour-reporter.com|Last Updated: 12/08/2014

PARIS (Reuters) — The leader of France's largest union faced pressure to resign on Wednesday after news reports detailing his lucrative perks caused a crisis in what is one of the main opponents of government plans for economic reforms.

The CGT's troubles could make it easier for President Francois Hollande to push through economic and labour policies that euro zone partners want in return for giving Paris more time to reduce its public deficit.

Senior CGT sources told Reuters the union's governing council could ask Thierry Lepaon to resign as leader as early as next Tuesday after reports revealed expensive perks linked to his appointment in March 2013. He has denied any wrongdoing.

"There are people who want him to leave," said one regional CGT leader.

"Should we wait until the next congress (in February) or saw off the branch right away? If the leaks keep piling up, we should definitely saw off the branch right away," he said. A second senior CGT source confirmed that senior union officials were considering asking Lepaon to step down.

Last month satirical weekly Le Canard Enchaine reported that the union had paid 130,000 euros ($160,290) to renovate an apartment rented for Lepaon just outside Paris.

Since then, media have reported that tens of thousands of euros were spent renovating Lepaon's office and that he received over 100,000 euros of severance pay for leaving a local CGT chapter when he became national leader.

Lepaon has defended the apartment costs as a "collective error" by the union. He did not reply to Reuters calls over the latest allegations but L'Express magazine quoted him as saying the severance benefit he received was normal.

The affair is the latest difficulty facing the union.

THREAT TO DOMINANCE

A series of CGT calls to strike, in the rail sector and against spending cuts over the past year, were rejected, and the union has steadily lost ground to the rival CFDT in large companies.

It lost its position as the top union at 27-per cent state-owned telecoms company Orange in a workers' vote on Nov. 25. Some CGT officials fear it could lose its leadership position to the CFDT in public sector union elections on Thursday.

"When you see these leaks in the press, it's clear that the upcoming elections in the public sector are very worrying for some people," said Simon Gevaudan, a regional CGT leader and member of its governing council.

Public sector workers, whose wages have been all but frozen since 2010, are frustrated over Lepaon's failure to fight against austerity measures designed to bring France's budget deficit within EU targets.

While the CGT has refused to sign several employer-union deals, notably to ease hiring-and-firing rules, the union has put forward proposals which could allow firms to circumvent a restrictive labour code.

"There is a problem with the CGT's line," said a senior union source. "There are those who want a more conciliatory approach and others I would call archaic, who want a direct confrontation with the government ... Those people want Lepaon out."

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