‘France faces last chance to reform labour market, but must not become like UK and US’

The head of France's biggest employers federation said on Friday that President Emmanuel Macron represented the last chance to reform the country's rigid labour market, but did not want the country to end up like the US or the UK.

'France faces last chance to reform labour market, but must not become like UK and US'
Photo: AFP

The French president Emmanuel Macron has already done the easy part.

In one year he’s gone from being a former banker dismissed as a “chancer” and a “maverick” to France’s head of state in his new home at the Elysée Palace, and the head of a party with an imposing majority in the French parliament.

His next task however is considered to be far harder: reforming the notoriously rigid French labour market.

Macron believes that the key to tackling France’s stubbornly high unemployment of close to 10 percent is injecting flexibility into the country’s rigid labour code — at the risk of sparking mass worker protests.

While his plans have leftist trade unions seething and warning of mass street protests, the leaders of France’s big companies are unsurprisingly right behind him.

“We need to get going quickly,” said Pierre Gattaz, president of France’s employers federation Medef, an organisation that is reviled by many among France’s hard left.

(Pierre Gattaz – right – leaving the Elysée Palace after talks with Macron. AFP)

“France won’t have another opportunity. Now we have no option,” Gattaz told members of the Anglo-American Press Association in Paris including The Local.

“The whole world, the business leaders in America, the UK, China, Africa say France must carry out reforms, the biggest priority being reforming the labour market,” Gattaz said.

Gattaz and his fellow business chiefs at Medef are pleased with Macron’s economic programme, albeit, they would have preferred it if the conservative candidate François Fillon, dubbed France’s Maggie Thatcher due to his promise to impose liveral reforms and cut public spending, hadn’t been crippled by a fake jobs scandal.

Macron’s government wants to give bosses more power to negotiate conditions with workers at the company level and also wants to cap the severance pay awarded by labour courts.

But a similar law passed by the Socialist government in which Macron served sparked months of sometimes violent protests and sporadic strikes, during which uncollected rubbish piled up on the streets of Paris.


The president risks more controversy by wanting to fast-track the reforms through parliament using executive orders, a move Gattaz is fully behind.

To get trade unions on board, the government launched negotiations within days of Macron’s election, which are set to continue throughout the summer.

But he will have little breathing room.

Much of the resistance towards the previous government’s labour law reforms stemmed from fears over the loss of workers’ rights with laws relaxed to make it easier to lay off staff and the power of France’s trade unions undermined.

Although the IMF said the reforms didn’t go far enough many of those who were against it feared it was a step towards a liberalized labour market along the lines of the US or the UK, home to the famous zero hours contracts.

Gattaz said he didn’t see the ultra-liberalised US, UK model as the right one for France.

“It’s too far from the French culture,” he told The Local and other members of the Anglo-American Press Association in Paris.

“Maybe France will get there in 20 or 30 years time,” Gattaz said. “But I don’t think it’s the right model.”

He believes France should aim for a “midway point” that ensures “flexibility and security” along the lines of the Danish model.

He wants France to develop a “profoundly humane” model that promotes a “sense of work” and “motivation” among French employees.

But Gattaz said the French needed to learn they their jobs couldn’t be guaranteed for life.

“They need to take into account that if the company needs to adapt then sometimes they are forced to leave that company.

“But that it won’t be a tragedy because their training and their experience means they can bounce back quickly.”

While the bosses leader believes the UK model is perhaps too flexible and does not provide enough security he did argue the benefits to workers of having the kind of low unemployment rate seen in Britain in recent years.

“When you have a labour market that is blocked like that in France where there is 10 percent unemployment the balance of power favours companies,” he said.

“But when you have a labour market with three percent unemployment like in London then it’s the workers who have the power. Because the worker can decide to quit their job if they don’t like it and find another one the next morning.”

But many French workers will need convincing and most analysts expect there to be months of protests ahead.

The defeated presidential candidate Jean-Luc Melenchon, head of the hard left France Insoumise (France Unbowed) party has positioned himself as the defacto leader of the opposition to Macron’s promised labour reforms.

Gattaz compared Mélénchon to the former Venezuelan leader Hugo Chavez who “left his country” in ruins.

But the bosses federation chief did warn that Mélénchon and France’s other big anti-establishment figure could threaten power in the next presidential election if Macron does not ensure there’s more flexibility in France’s labour market.

“If there are no reforms then in 2022 then we will have Marine Le Pen and Mélénchon in the second round of the election,” he said.







French labour reforms: What’s actually going to change for workers in France

French president Emmanuel Macron signed his contentious labour reforms into law on Friday, but what will they actually change for those who work in France?

French labour reforms: What's actually going to change for workers in France
Photo: AFP

The reforms overhaul large parts of the 3,300-page labour code which details workers' rights, with some chapters dating back over a century.

What's in the new law?

The reforms will give small companies in particular more freedom to negotiate working conditions with their employees, rather than being bound by industry-wide collective agreements negotiated by trade unions, or the national labour code.

For example companies with less than 11 employees will be able to negotiate conditions directly with staff without having a union representative present. It's these kind of changes that worry unions, who believe ordinary employees are not sufficiently trained to negotiate with bosses.

While certain issues will still be decided on at industry-wide level, with the input of unions, companies will be able to thrash out agreements directly with staff over subjects such as, whether they get a 13th month salary, loyalty bonuses, how many days off a year to cover child sickness, the number of extra days off for maternity leave etc.

A cap has also been set on the amount of compensation awarded by industrial courts in cases of unfair dismissal — a key demand of bosses who complain that lengthy and costly court cases discourage them from hiring staff in the first place.

The payout will depend on how long the person has been employed for and will rise progressively. For example a member of staff wrongly sacked after two years can gain compensation worth three months salary and a worker with 30 years of service can receive a maximum of 20 months salary.

Workers will now have 12 months rather up to 24 months to lodge their application with the tribunal for compensation for wrongful dismissal.

Defiant Macron signs his contested labour reforms into law

This latter measure was one among several that were withdrawn from reforms implemented by Macron's Socialist predecessor Francois Hollande under intense pressure from the unions.

In a further concession to companies, multinationals whose French operations are struggling will find it easier to lay off staff — even if they are making profits in other countries — while workers made redundant will receive higher payouts.

Voluntary departures, known in France as “rupture conventionelles” which are agreed on by both the employee and the company, will also be extended. Currently they have to be done on an individual basis but in future companies can put through “collective ruptures”, which will not be classed as redundancies.

Workers leaving via a rupture conventionelle are eligible to claim unemployment benefit (chomage).

The reforms will also give workers more right to work from home if appropriate and give companies more say on how long and how many times temporary CDD contracts are renewed for.

A few changes, including a measure to streamline workers' committees, which are mandatory within large companies, will not take effect until the end of the year.


The benefits and perks of working in France

What do the unions say?

Philippe Martinez, the head of the most militant union, the CGT, has said the reforms give “full powers to employers” and has vowed to press ahead with a series of strikes and demos which began last week.

But the leaders of more moderate unions, including the CFDT — the biggest private-sector union — and the leftist Force Ouvriere have been more conciliatory and the CGT's street protests appear to be losing steam already.

“The future of trade unionism… is our presence within companies” rather than on the streets, the head of the CFDT, Laurent Berger, said Thursday protests organised by the CGT.

In parliament, the opposition to the changes is led by the radical France Unbowed party of leftist firebrand Jean-Luc Melenchon, which is planning a mass march in Paris on Saturday.

The right and centre-left parties in parliament have broadly backed the reforms.

What's at stake for Macron?

Macron resorted to executive orders — with the blessing of a parliament dominated by his Republic on the Move (LREM) party — in the hope of avoiding a repeat of the months-long, sometimes violent protests unleashed by Hollande's labour reforms last year.

But the changes come as the former investment banker's approval ratings have plunged, with recent polls showing that only around 40 percent of French voters are satisfied with his performance.

Protesters have seized upon Macron's dismissal of opponents to his reform as “slackers”, with slogans such as “Watch out, Macron, the slackers are in the street”.

The president is hoping the changes will incite companies to hire more, while also encouraging foreign investors who have long been put off by France's powerful unions and restrictive labour law.

The reform is also crucial to his wider plans for the European Union: he wants German cooperation in making institutional changes to the 28-member bloc.

He believes that improving French competitiveness is a necessary first step to build trust in Berlin and restart the Franco-German motor which has driven integration on the continent.