France urges firms to make use of Covid-19 help schemes to avoid layoffs

France urges firms to make use of Covid-19 help schemes to avoid layoffs
The French economy is still reeling after closing down for nearly two months this spring. Photo: AFP
France's prime minister on Monday called on companies to negotiate part-time work deals with their employees on the state-funded help scheme 'chomage partiel' to avoid outright layoffs as the Covid-19 crisis hammers the economy.

“I strongly encourage you to sign a massive number of long-term partial activity agreements within sectors and companies, and very quickly, between now and November 1st,” Jean Castex said during a visit to a factory east of Paris.

For companies that sign up to the scheme known as chômage partiel (partial unemployment), the government will pay 93 percent of an employee's net salary even if they are no longer working full time. The scheme is scheduled to run at least until next summer.

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The government has already spent billions of euros to keep paying most of the salaries for people who otherwise would have been dismissed during the coronavirus lockdown from March to May this year, and the subsequent business slump.

The goal is to limit unemployment that is expected to reach 9.5 percent by the end of 2020 after 715,000 jobs were lost during the first half of this year.

France has plans to spend a further €100 billion to help the economy recover, but “this will work depending on one single condition: your total mobilisation,” Castex said.

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Already 345 part-time agreements have been signed between employers and staff bodies since March, saving 50,000 jobs overall, according to the labour ministry. 

“These accords also allow you to organise professional training for your teams when they are unemployed,” Castex said.

The government estimates the economy will contract by 11 percent this year, though Finance Minister Bruno Le Maire has hinted that officials are preparing to release a less pessimistic number this month.

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