Overhaul of labor code is big test for new president
PARIS — The French government announced Thursday a plan to overhaul the labor code, a highly awaited and contentious effort to loosen regulations and stimulate the economy that has been met with opposition from unions and leftwing parties who say the changes go too far in repealing workers’ rights.
The labor 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, a move that was being closely watched by the country’s European partners and by investors abroad.
Macron, who has slipped significantly in the polls the summer, is trying to avoid the intense backlash that led to street protests when his predecessor, Francois Hollande, introduced changes.
The broad outlines of the changes were already known, and measures such as a cap on severance payouts when workers are wrongfully dismissed and the merging of existing bodies that represent workers within a company were widely expected. But the exact details of the full plan, which will come into effect next month, were not made public until Thursday.
Prime Minister Édouard Philippe and the labor minister, Muriel Pénicaud, announced the changes at a news conference in Paris at noon Thursday, just hours after presenting the finalized measures to workers’ and employers’ unions.
“Of course, we know that labor 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 labor code “is often perceived as an obstacle to hiring, as an obstacle to investment,” and he called the overhaul “ambitious, balanced and fair.”
But union leaders, speaking to reporters after the meeting with the government, had mixed reactions, expressing satisfaction with some points and dismay at others, like the permission for bosses to negotiate directly with staff members in companies with fewer than 20 workers.
The overhaul to the vast and complicated labor code is only part of a broader effort, and the government is working on more contentious changes, including budget cuts and modifications to the pension and unemployment systems.
The government held talks over the summer with the unions to discuss the changes, which would make it easier for employers to hire and fire workers and to engage in collective bargaining at the company level, as opposed to industrywide agreements.