French labour laws: Watered-down proposal put before parliament in bid to lighten obstacles to job creation

Proposals to simplify and loosen France’s employment laws, which have provoked violent protest in recent days, have been placed before the lower house of the French parliament.

Watered-down in advance, and facing 5,000 proposed amendments, the changes are likely to emerge from the two weeks of debate in much reduced form. A threatened revolt by some members of the ruling Socialist Party could ditch the reform completely – further weakening President François Hollande before presidential elections in 12 months’ time.

Despite concessions, the changes are the first serious attempt by any recent administration to lighten the regulatory obstacles to job creation in France. The centre-left government insists that less rigid labour laws are in the best interests of young people and the country’s 3.5 million unemployed.

The right-wing opposition dismissed the changes as an “empty shell” – although the proposals go beyond anything attempted by the former president, Nicolas Sarkozy.

Despite support for the government from moderate unions, the changes are seen by militant union federations as a sell-out to employers. The proposed reforms have also spawned protest movements by school and university students and hard left groups, which have become increasingly violent in recent weeks.

The reform bill, presented to the national assembly by the Labour Minister, Myriam El Khomri, would make it easier for employers to terminate long-term contracts when their businesses were struggling. It would permit local agreements between employers and workers to modify the 35 hour working week and other labour regulations.

Supporters of the changes argue that the present system – offering high legal protection to employees on long term contracts – is one of the causes of France’s high unemployment rate (10 per cent or around 3.5 million people). Employers prefer not to hire extra workers or resort to short term contracts, which have fewer guarantees.

As a sop to their own doubtful members of parliament, President Hollande and Prime Minister Manuel Valls have promised in recent days to propose an amendment to their own reform which would place a modest extra payroll tax on short-term contracts.

As a result of this and other changes, the French employers’ federation, MEDEF, has withdrawn its support.

Hard line union federations say the changes would, in effect, end the principle of a single nationwide body of legal protections for workers. Unions representing only 30 per cent of workers in one factory or office could call for a referendum to approve or reject a local agreement to set aside regulations including some aspects of the 35 hour week.

Ms El Khomri admitted that she lacked up to 40 votes to push through the changes in their present form. The government has, however, ruled out the possibility of using its powers to avoid a vote by, in effect, calling a vote of confidence.

“The time has come to allow parliament to improve the text,” Ms El Khomri said. “Should we give in to street protests and scrap these proposals? No.”