Wednesday

22nd May 2019

Macron unveils high stakes labour reform

  • The French president wants to "release energies" through a "deep and ambitious transformation". (Photo: Lorie Shaull)

The French government has unveiled labour reforms designed to reduce unemployment in what represents the first political test for president Emmanuel Macron.

Prime minister Edouard Philippe published five decrees on Thursday (31 August) that he said aimed to "favour hiring and social dialogue".

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The new measures would make the labour market more flexible.

They would make collective layoffs easier when both sides - bosses and workers' representatives - agreed on terms.

The length and conditions of short-term contracts would be determined at professional sector level rather than by law.

Regular severance pay would go up by 25 percent, but there would be a new ceiling for damages due to unfair dismissal, except in cases of discrimination or violation of fundamental rights.

Multinationals would also be blocked from closing French subsidiaries if they were profitable in France, even if the parent firms were not profitable at a global level.

"We cannot live in the long term with 9 percent unemployment," Philippe said.

The government is to adopt the decrees without a vote by MPs after they have passed scrutiny by the Council of State, France's highest administrative body.

Macron chose the procedure over the normal legislative one to avoid lengthy parliamentary debates that could have introduced amendments and allowed street protests to gather momentum.

The government, trade unions, and business federations debated the content of the reforms over the summer, but parliament, which discussed only the principles of the laws, was largely bypassed.

First reactions

The first reactions were mixed on Thursday.

Two contradictory polls were published after the reform was unveiled. In a poll for the conservative Figaro daily, 52 percent responded that it would help employment and economic activity. In a second one, published by L'Express magazine, 42 percent supported the decrees and 58 percent opposed them.

"All of our fears have been confirmed," said Philippe Martinez, the leader of the CGT trade union, which will organise a protest on 12 September.

Another protest, organised by the France Insoumise (France Unbowed) political movement, which said that the reform is a "social coup", will take place on 23 September.

The leader of the CFDT trade union, Laurent Berger, said the reform "does not rise to the occasion", but also that "taking to the streets is not the only mode of action."

Pierre Gattaz, the leader of the Medef, the main business federation, welcomed the changes as an "important and interesting step".

Macron's test

The reforms represent the first political test for Macron after he was elected in May on a promise to "transform" France.

He has presented the move as a way to revive French influence in Europe.

In his first meeting with German chancellor Angela Merkel after he won the election, he said he would make reforms "because France needs it" and because it was "necessary for the restoration of Franco-German [relations]".

He reverted to his old rhetoric in an interview with Le Point, a French magazine, this week, saying the labour reform was a "deep and ambitious transformation" that would "release energies" and lead France back to growth.

Mixed message

But he has also sent out other messages.

He said last week while on a visit to Romania: "France is not a country you can reform".

"Many have tried and failed," he said, adding that "the French people hate reforms".

He said he wanted to "deeply transform the country", but he also said France should not bend over backwards "to look like the others, to address a figure or a constraint".

France should "get back its destiny, its capacity to take Europe towards new projects", he said.

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