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Complex French Labour Laws… What’s Changed?

18 May 13:00 by Matt Walters

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Last year, we discussed the restructuring of French labour laws and the changes that this could make to French employment. At that time, the proposed reforms followed criticism that described the current 3,500 page labour code document as overly complex. Earlier this month, the divisive bill, named the ‘El Khomri Law’ after Labour Minister Myriam El Khomri, finally reached parliament.

Many commentators have speculated that as President Hollande enters the last year of his presidency, the bill is a final attempt to win favour with the French businesses that have struggled to successfully grow and enter global markets under the current labour code. Despite this, the reforms have proved to be one of the most testing moments of Hollande’s presidency yet; in our last article we predicted that the proposed changes would be met with strikes and protests, as the labour laws remain a solid foundation for many French workers and labour unions. As expected, protests against the reforms have raged throughout France over the last month, in some instances resulting in violence.

Last week the situation further deteriorated as, disregarding the hostility towards the reforms from the public and some members of his own party, Hollande resorted to his government’s emergency powers to push through the controversial changes by force. Incidentally, this act marks the second occasion in two years that the current government has been forced to resort to emergency measures to implement reforms.

While the French government may have anticipated a hostile reaction from France’s labour unions, the response of the lycée and university students that have been leading the protests may have come as a surprise, as Hollande has maintained that the reforms are also in favour of the country’s struggling workforce and, in particular, unemployed youth population. This has been one of Hollande’s clear focuses during his term in office, throughout which he has insisted that amending the currently rigid labour laws is in the best interests of France’s young people. In many ways the El Khomri Law stays true to this focus, as simplifying the current labour law and lightening the regulatory obstacles to job creation would, in the long term, help to tackle France’s record rate of unemployment which currently sits at 10.5 per cent.

Regardless of the potential opportunities that the reforms could introduce, the protesting unions, workers and students have been unable to move past, and have almost been blindsided, by Hollande’s most controversial change: the 35-hour week. Since its introduction in 2000, the 35-hour week has become a cornerstone of the French way of life, both culturally and industrially. Across the rest of the continent we may make light-hearted reference to France’s 35-hour week, yet according to the Economist, French productivity per hour continues to be far higher than Britain's and slightly above that of Germany. In addition, the 35-hour week arrangement provides workers with unparalleled protection and rights to overtime pay, and because of this it has been fiercely defended by French labour unions and workers.

With this in mind, we must ask: why has Hollande insisted on altering the one ruling which French workers regard so highly and dearly? Acknowledging that the 35-hour week has pushed up costs for French businesses, Hollande’s bill would provide companies with the authority to increase their workers’ hours above 35 hours with minimal compensation and without prior agreement from unions.

In addition, the new bill would implement a financial ceiling for cases of unfair dismissal, as well as redefine what unions are permitted to do in instances of strikes and disagreements. The changes would also allow businesses to have more power when it comes to reducing members of staff. As a result, opponents have commented that the reforms could enable employers to evade correct procedures when it comes to their workers’ rights on subjects such as pay, rest times and overtime rates, and that while the original law was overly complex, Hollande’s reforms are equally “bewildering” and unfairly favour businesses at the expense of their employees.

On the whole, the El Khomri Law is fairly unbalanced. While there are underlying points which would enable economic growth and increase French employment prospects, the worker population remains critical of Hollande’s idea to scrap the 35-hour week. Interestingly, Hollande’s would-be successor, Alain Juppé, has also claimed that under his presidency the existing 35-hour week model would be replaced by 39 hours, in an effort to “put companies back at the heart of the state’s jobs policies”.

Although thoroughly unpopular, Hollande’s proposed reforms are symptomatic of an economic climate which struggles to create employment for the vast number of people currently out of work. While the bill represents a change in pace for both employers and employees, Hollande has continued to antagonise those groups that should be his biggest supporters, the workers and students, by scrapping their much-valued 35-hour week, which was clearly demonstrated by the 400,000 people who took to the streets in March as the protests reached a peak.

The bill is likely to be an ongoing discussion which will continue into the next presidential administration. While the reforms are the first serious attempt by any recent administration to remove some of the barriers that currently prohibit the unemployed from finding work, and go far beyond anything that former President Sarkozy attempted to introduce, the government cannot ignore the objections of workers, unions and students.