French govt lifts lid on ‘labour reform’

Macron heads east

PARIS, Aug 22, (Agencies): The French government will begin Tuesday a final round of talks with trade unions and employer groups on liberalising the country’s strict labour laws, taking President Emmanuel Macron a step closer to implementing one of his signature reforms.

Injecting more flexibility into France’s labour market was one of the central planks of Macron’s election campaign, part of his bid to drive down unemployment of 9.5 percent.

The centrist former investment banker wants to give employers more power to negotiate conditions with workers at the company level, rather than being bound by industry-wide agreements negotiated by trade unions.

He also wants to cap the compensation awarded by courts in dismissal cases.

But any attempt to dilute worker’s rights risks running afoul of the left.

The militant CGT union and the hard-left France Unbowed opposition party have already called for protests in September, even though the reforms — which were negotiated over the summer with both unions and business leaders — are still a work in progress.

On Tuesday, the labour ministry will present a first draft of the changes to the Medef employers federation, followed later in the week by trade unions.

The final version of the reforms, which will be implemented by decree to avoid the lengthier process of passing a law through parliament, will be unveiled on August 31.

The government has promised to offset concessions to employers with greater financial security for workers.

While companies will, for instance, find it easier to lay off staff during a downturn, jobless workers will receive higher payouts.

Macron

Proposals

Many of the more contentious proposals are still under discussion, however, such as allowing employers to bypass unions in putting changes to a workers’ ballot and allowing multinationals whose French operations are struggling to lay off staff, even if the group as a whole is profitable.

In attempting to revise France’s highly protective labour laws Macron is treading on a political minefield.

Ex-president Francois Hollande’s Socialist government sparked months of at times violent protests by pushing through a labour bill last year that was far less ambitious than that of Macron.

While Britain toils over its messy divorce with the European Union, France’s president Emmanuel Macron is embarking on a drive to deepen the economic integration of a bloc he says needs to be more protective of its citizens.

The French leader this week embarks on a threeday tour of central and eastern Europe, where he will seek to win backers for his push to tighten labour rules over ‘posted’ workers, a sensitive issue that has exacerbated an east-west rift.

Days later, euro zone reforms, defence cooperation and immigration will be in focus when Macron hosts the leaders of Germany, Spain and Italy for talks, as he seeks to enhance France’s leadership in Europe.

Paris has long complained that central and eastern Europe gains an unfair advantage from the “social dumping” of cheap labour, arguing the posting of low-paid workers hurts local jobs and erodes labour protections in higher-wage member states.

Although posted workers make up less than 1 percent of the EU workforce, with many employed in the haulage and construction sectors, the issue has deepened a divide between the poor east and rich west.

Macron will visit Romania, Bulgaria and Austria, where he will also meet the leaders of Czech Republic and Slovakia, but is skipping Hungary and Poland, whose right-wing governments he has accused of spurning the bloc’s values.

Attached

An Elysee Palace source said Macron was visiting countries who were “the most attached to their European anchoring”.

The source dismissed suggestions that Macron is seeking to drive a wedge between central and eastern European countries staunchly opposed to reform and those that see scope for compromise.

“This is not about dividing in order to better rule,” the source said in a briefing to reporters earlier this month. Macron’s election win has re-energised the EU’s Franco-German axis but in Poland and Hungary it has fanned fears of a “multi-speed” Europe that could mean reduced influence, financial support and economic competitiveness.

The 39-year-old leader will find a sympathetic ear in Austria, which borders four eastern European countries and where the ruling Social Democrats say an influx of workers from the east is weighing on wages.

The posted workers directive permits European companies to send employees to other EU states on contracts under which they only have to guarantee the minimum wage of the host country.

Macron has said a European Commission proposal that posted workers’ pay packets should include benefits in line with host country regulations and that their contracts be limited to two years does not go far enough.

Poland, Hungary, Slovakia and the Czech Republic — known together as the Visegrad four — say the proposals go too far. They argue they should be allowed to compete on lower prices to catch up after decades of communist stagnation.

Estonia, which holds, the EU’s rotating presidency, is due to table a new proposal in September.

Poland has accused Macron of double standards by advocating a closer Europe while seeking to erode competition in the single market. Two sources in the Polish government said it had tried to invite Macron to Warsaw as part of his trip.

“But we didn’t see much willingness,” said one of the sources.