France unveils contentious labour overhaul

Emmanuel Macron aims to avoid backlash experienced by predecessor over changes

PARIS— The French government announced on Thursday a plan to overhaul the labour code, a highly awaited and contentious effort to loosen regulations and stimulate the economy that has been met with opposition from unions and left-wing parties who say the changes go too far in repealing workers’ rights.

The labour overhaul was one of Emmanuel Macron’s major promises during his campaign, and it represents one of the first big tests of his pledge as president to reshape France’s social and economic landscape and was being closely watched by the country’s European partners and by investors abroad.

Macron, who has slipped significantly in the polls over the summer, is trying to avoid the intense backlash that led to street protests when his predecessor, François Hollande, introduced changes to a system that employers have long complained makes it difficult for them to compete globally.

The outlines of the labour overhaul were already known, and some measures were widely expected. Broadly speaking, the rules would:

Make it easier for employers to hire and fire workers.

Allow employers in some instances to engage in collective bargaining at the company level, instead of conforming to industry-wide agreements.

Simplify the relationship between employers and worker representatives.

The government held talks over the summer with unions to discuss the labour rules, but the exact details of the full plan, which will come into effect next month, were not made public until Thursday, when Prime Minister Édouard Philippe and the labour minister, Muriel Pénicaud, held a news conference in Paris, just hours after presenting the finalized measures to workers’ and employers’ unions.

“Of course, we know that labour laws are not the primary cause of unemployment in France,” Philippe said. “But we also know that if we want to move forward on the question of employment, we have to deal with all aspects, all causes of unemployment together.”

Philippe said that for employers, especially small companies, and for foreign investors, the labour code “is often perceived as an obstacle to hiring, as an obstacle to investment,” and he called the overhaul “ambitious, balanced and fair.”

Pierre Gattaz, the head of MEDEF, the main employers organization, said at a news conference after the announcement that the overhaul was an “important first step in the construction of labour legislation that is in sync with the daily reality of our companies.”

The changes to the vast and compli- cated labour code are only part of a broader effort, as the government is also working on more contentious changes, including budget cuts and modifications to the pension and unemployment systems.

The changes, among other things, would enable companies to bargain directly with workers in businesses with fewer than 20 employees, and merge different bodies that represent workers in a company into one unified group.

Regular severance pay for workers would be increased, but the new rules put a cap on the payouts issued by labour courts when workers are wrongfully dismissed, and they would reduce the amount of time during which an employee can challenge a dismissal.