Hollande Bypasses France’s Lower House on Labor Law Overhaul

http://www.nytimes.com/2016/05/11/world/europe/france-hollande-labor-law-changes.html

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PARIS — Amid boos and catcalls, France’s Socialist government forced an overhaul of the country’s rigid labor laws through the National Assembly on Tuesday, hoping to bring down chronically high unemployment before elections next year.

The decision to bypass a vote and ram the measure through with a rarely used executive power followed weeks of street protests against the legislation and unyielding opposition from some Socialist lawmakers. President François Hollande’s government says making France’s labor laws more flexible will encourage employers to hire more people, but critics of the measure, including labor and student unions, are fiercely opposed to what they say is a weakening of worker safeguards.

The government’s support of the bill has sparked demonstrations, some of them violent, a grass-roots political movement that has camped for weeks in a major Paris square and angry cries of betrayal from inside the Socialist Party. The decision to push the bill through the National Assembly without a vote left Mr. Hollande and his government facing the risk of intensified backlash a year before the presidential election.

Late on Tuesday hundreds of supporters of the grass-roots movement called Nuit Debout — “Night, Standing Up” — gathered in front of the Parliament building to protest. On Thursday, the government will face a motion of censure in the National Assembly, introduced by the opposition parties of the right and aimed at toppling the government. If the motion fails, the government stands and the bill goes on to the Senate. If it succeeds, the bill is rejected and the government falls. That outcome, however, is unlikely, because many Socialist lawmakers who oppose the bill will stop short of toppling their own government.

The unemployment rate has been hovering above 10 percent for years, and the drastic parliamentary maneuver employed by the government on Tuesday was evidence of the difficulties in changing economic policies that continue to have broad backing on the left despite making it costly and difficult for employers to lay off workers and risky to take on new ones.

It was the second time in just over a year the Socialist government was obliged to ram an economic overhaul measure through Parliament without a vote.

It came after months of concessions and compromises by Mr. Hollande, who for years has been trying to maneuver between centrists in his party who advocate more business-friendly policies and the traditional constituencies of the left who oppose them. A key early provision, limiting payouts by labor tribunals to fired workers, has been dropped; after days of student demonstrations in France’s streets the government promised to spend hundreds of millions of euros on young people. Employers’ groups say the bill has been so watered down that they no longer support it.

Although much of the opposition to the legislation is coming from students, it was intended to help open up the labor market to young people, among whom unemployment is as high as 25 percent. Years after Germany, Britain, and now even Italy have instituted labor market overhauls, France has difficulty even addressing the question, economists here say.

Mr. Hollande’s inability to gain consensus on the labor measure, after months of trying, has helped to weaken him politically, and most polls and commentators question whether he can even make it through a first round of voting in next year’s presidential elections. And Mr. Hollande’s weakness in turn could open the way for France’s far-right National Front party to advance to the final round of voting a year from now, commentators suggest. In that case, Marine Le Pen, the National Front leader, could face off in the final round against a candidate from France’s mainstream right.

Despite the government backtracking, even the watered-down version of the labor measure continues to provoke outrage.

On Tuesday, Prime Minister Manuel Valls was shouted at as he tried to justify the government’s use of force on the floor of Parliament’s lower house. “What’s important is to find a way to reform,” Mr. Valls said, amid boos. “This country needs to move forward.”

Later in the session Mr. Valls told the members of Parliament: “I am doing this, we are doing this, because we are convinced that this reform paves the way for lasting employment, and brings into the labor market those who are excluded, and so that, most notably, our smaller firms are able to hire.”

But a representative from the Communist Party, André Chassaigne, denounced Mr. Valls and the government’s use of force. “This is a sign of the government’s impotence, its turning in on itself,” Mr. Chassaigne shouted in the ornate marbled Parliament chamber. “Who could have imagined that a leftist government would seek to crush our social model?”

Outside the chamber throngs of reporters pounced on the members of Parliament as they emerged from the heated session. “The government is taking us on a strange trip,” said Laurent Baumel, a Socialist who is part of a group that opposes Mr. Hollande called the Frondeurs, or Rebels. “This calls into question the values to which I am attached.”

The aspect of the law that now most infuriates the labor unions allows individual companies to negotiate agreements over such issues as hours worked, paid holidays and bonuses that are less favorable to workers than those negotiated at the occupational sector level. The unions fear this could lead to a degradation of worker rights.

The law also specifies conditions for “economic layoffs,” according to the size of the company concerned — a company of 50 to 300 employees could justify layoffs if it had poor results over three consecutive trimesters. Unions see this as opening the door to arbitrary layoffs.

Mr. Valls, justifying the government actions, sees it differently. “The law gives flexibility to our companies,” he said. “It allows for the decentralization of union-management discussion, by placing confidence in the players close to the ground, and it is a real revolution that we are undertaking.”