It’s been an interesting few weeks in France. Under pressure from the upcoming election and poor opinion polls, the French president has been trying to cement his position with sweeping reforms to the country’s rigid employment laws.
Mass strikes throughout the country by those against the proposed changes show no signs of ending. For the sixth day in a row, thousands have taken to the streets of Paris in an attempt to scrap the government’s plans.
The government has argued that by making hiring and firing easier, less expensive and less risky, businesses will be free to offer more permanent contracts and get more of the 3.5 million unemployed back into work.
The country’s unemployment rate currently stands at 10% (which is double compared to that of Germany) with youth unemployment up at 24%. The new law is intended to loosen up the labour market by reducing employee protection, but in return provide a more business friendly environment that creates new jobs.
The new legislation and overhaul has been, in part, a response to the digital transformation of the global economy. Work, as we once knew it, has changed dramatically thanks to globalisation, software, remote working and the role startups play in creating innovation and disruptive technologies. But historic employment regulations have hindered entrepreneurs’ attempts to scale up their businesses.
When it takes on average four years for any employment dispute to be resolved by tribunals in France, startups have found it difficult to take the financial risk of employing staff on a permanent contract.
Permanent contracts are referred to as CDI (Contrat de Durée Indéterminée), and they can make it very hard or expensive to fire someone. As a result 90% of employment contracts today are short-term "CDDs" (Contrat de Duration Determinée), which typically last from three to nine months.
With the maximum length of a temporary contract at 18 months (after which employment must either cease, or be transferred to a permanent contract), businesses have invariably suffered from losing an employee’s experience when their temporary contracts come to an end.
The labour courts responsible for work contracts regime (the conseil de prud’hommes), have also come under criticism for their speed in processing cases (the average waiting time is 13 months) and for their tendency to rule more often in favour of the employee.
Against this framework, the reforms sound like common sense and those who are pro-business argue that they’re hardly radical when compared to legislation in other EU countries, however they have sparked waves of protests throughout France.
Students, unions and lorry drivers say the reforms will destroy job security and workers' rights; empowering employers to halve their overtime pay if they saw fit.
A recent cabinet meeting has also fueled the anger where the rarely used Article 49.3 was invoked. Article 49.3 allows the French cabinet to bypass parliament, forcing through the highly controversial labour reforms. The general consensus among opinion polls is that it isn’t the idea of reform that has caused so much controversy, but the government’s way of handling the situation.
The only way to void Article 49.3 would be to produce a vote of no confidence, however last week the government survived this opposition and the law will now be debated in the Senate.
Key points of the labour bill
- The 35-hour week will remain however businesses can negotiate with local trade unions for more or fewer hours from week to week, up to a maximum of 46 hours.
- Firms are given greater freedom to reduce pay.
- The law eases conditions for firing workers in the hope that businesses will take on more people under permanent contracts.
- Employers are given more leeway to negotiate holidays and special leave, such as maternity or for getting married.
But with more planned strikes in France, Belgium, Germany and Spain, the new labour reforms could continue to give the government a headache for quite some time.
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