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France Unveils Contentious Labor Overhaul in Big Test for Macron France Unveils Contentious Labor Overhaul in Big Test for Macron
(about 3 hours later)
PARIS — The French government announced on 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 left-wing parties who say the changes go too far in repealing workers’ rights.PARIS — The French government announced on 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 left-wing 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. 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 and was being closely watched by the country’s European partners and by investors abroad.
Mr. 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, François Hollande, introduced changes. Mr. Macron, who has slipped significantly in the polls over the summer, is trying to avoid the intense backlash that led to street protests when his predecessor, François Hollande, introduced changes to a system that employers have long complained makes it difficult for them to compete globally.
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. The outlines of the labor overhaul were already known, and some measures were widely expected. Broadly speaking, the rules would:
Prime Minister Édouard Philippe and the labor minister, Muriel Pénicaud, announced the changes at a news conference in Paris at noon on Thursday, just hours after presenting the finalized measures to workers’ and employers’ unions. • Make it easier for employers to hire and fire workers;
• Allow employers in some instances to engage in collective bargaining at the company level, instead of conforming to industrywide agreements;
• Simplify the relationship between employers and worker representatives.
The government held talks over the summer with the unions to discuss the labor rules, but the exact details of the full plan, which will come into effect next month, were not made public until Thursday, when Prime Minister Édouard Philippe and the labor minister, Muriel Pénicaud, held a news conference in Paris, 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,” Mr. 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.”“Of course, we know that labor laws are not the primary cause of unemployment in France,” Mr. 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.”
Mr. 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.”Mr. 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. Pierre Gattaz, the head of Medef, the main employers’ organization, said at a news conference after the announcement that the overhaul was an “important first step in the construction of labor legislation that is in sync with the daily reality of our companies.” But, he added, he remained “vigilant” about how the changes would be applied.
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 changes to the vast and complicated labor code are only part of a broader effort, as the government is also 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. The changes, among other things, would enable companies to bargain directly with workers in businesses with fewer than 20 employees, and merge different bodies that represent workers in a company into one unified group.
Regular severance pay for workers would be increased, but the new rules put a cap on the payouts issued by labor courts when workers are wrongfully dismissed, and they would reduce the amount of time during which an employee can challenge a dismissal.
The new measures would also reduce the scope granted to labor courts to assess a company’s health when determining whether it had rightfully fired workers on economic grounds. Until now, the courts could assess the global situation of a company, but the new rules will limit the basis for any ruling to the company’s situation in France. That would make it easier for a company that operates in multiple countries to lay off French workers even if it is profitable elsewhere.
“The reform of the labor market is a reform of profound transformation,” Mr. Macron told the weekly Le Point in a wide-ranging interview published online on Wednesday, adding that it had to be “ambitious and efficient enough to continue to lower mass unemployment.”“The reform of the labor market is a reform of profound transformation,” Mr. Macron told the weekly Le Point in a wide-ranging interview published online on Wednesday, adding that it had to be “ambitious and efficient enough to continue to lower mass unemployment.”
The government argues that the changes are necessary to give companies more flexibility and to help them adapt to an increasingly global marketplace. But opponents on the left counter that hard-won worker rights are being unfairly watered down, and they dispute the notion that the changes will help create jobs. The government argues that the changes are necessary to give companies more flexibility and to help businesses, especially smaller ones, adapt to an increasingly global marketplace. Mr. Philippe said that nine out of 10 companies in France had fewer than 50 employees.
Philippe Martinez, the head of the General Confederation of Labor, a union known as the C.G.T., told France Inter radio on Thursday that the changes proposed by the government were “old recipes” that did not work. “All studies show that there is no relationship between collective rights and the fight against unemployment,” Mr. Martinez said. But opponents on the left counter that hard-won worker rights are being unfairly watered down, and they dispute the notion that the changes would help create jobs.
Union leaders, speaking to reporters after the meeting with the government, expressed satisfaction with some points, like the fact that the role of industrywide agreements was weakened less than expected. But they voiced dismay at others, especially the greater leeway granted to smaller companies seeking to bypass unions in negotiating with workers.
Philippe Martinez, the head of the General Confederation of Labor, known as the C.G.T., one of the more hard-line unions, said after the meeting that “all the fears that we had are confirmed,” while Jean-Claude Mailly, the head of the Force Ouvrière union, said that “all is not perfect, far from it.”
Mr. Macron vowed after his election in May to move swiftly on changes to the labor code, and he decided to proceed by issuing a list of decrees, which Parliament authorized the government to do this month.Mr. Macron vowed after his election in May to move swiftly on changes to the labor code, and he decided to proceed by issuing a list of decrees, which Parliament authorized the government to do this month.
The decrees are expected to be issued at a cabinet meeting and signed by the president in September and to officially go into effect shortly afterward. Mr. Philippe said that the five decrees presented on Thursday would be officially adopted during a cabinet meeting on Sept. 22 after consultations with a number of advisory bodies, and that any changes until then would only be “at the margins.”
Parliament now has about five months to decide whether to ratify the changes. If lawmakers reject the new labor measures, they will remain in effect, but with an inferior status that means they can be overturned by Parliament at a later date. The decrees will immediately go into effect after the president signs them and after they are officially published, but they will only become law if Parliament ratifies them in the coming months. If lawmakers reject the new labor measures, they will remain in effect, but with an inferior status that means they can be overturned by Parliament at a later date.
Mr. Hollande passed changes to loosen the French labor code last year, despite weeks of street protests that sometimes turned violent and that pushed the government to dilute the overhaul. Mr. Hollande successfully pushed for changes to loosen the French labor code last year, despite weeks of street protests that sometimes turned violent and that forced the government to dilute the overhaul.
Opponents of the new changes are planning to demonstrate, but there are signs that they might not be as united as they were last year. Opponents of the new changes are once again planning to demonstrate, but there are signs that their unity is fraying. The C.G.T. has called for nationwide protests on Sept. 12, while the left-wing France Unbowed party of former presidential candidate Jean-Luc Mélenchon is organizing a rally in Paris on Sept. 23.
The C.G.T., one of the bigger and more hard-line unions, has called for nationwide protests on Sept. 12, while the left-wing France Unbowed party is organizing a rally in Paris on Sept. 23. “Clearly, there is a confirmed assault on the labor code — with premeditation, on top of that,” Alexis Corbière, a France Unbowed parliamentary representative and top lieutenant of Mr. Mélenchon, said at a news conference on Thursday.
But the head of the Force Ouvrière union, which stood by the C.G.T. last year to protest Mr. Hollande’s labor changes, told the business daily Les Échos on Wednesday that there had been a “real social dialogue” with the government and that his organization did not plan to demonstrate on Sept. 12. Other more moderate unions have also indicated that they are open to compromise with Mr. Macron. But other unions, including more moderate ones — and even Force Ouvrière, which stood by the C.G.T. last year to protest Mr. Hollande’s labor changes — have indicated that they will not demonstrate with the C.G.T., even though they are not entirely satisfied with the overhaul.
“I think that we did our job as pragmatic unionists, which is to say that we discuss things point by point, and then in the end we will position ourselves on what is O.K. and what isn’t O.K.,” said Jean-Claude Mailly, the head of Force Ouvrière. “And I am sure that there will be some of both.” Mr. Mailly said that his union still had to go over the fine print of the changes. “Sometimes, the devil is in the details,” he said.