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11 September 2017

What is Emmanuel Macron’s labour reform and why are people so angry about it?

A round-up of the French president's big project.

By Pauline Bock

The reform of the French labour market, a campaign pledge of Emmanuel Macron’s, is about to be implemented. Employers love it; workers less so. As Macron and his government prepare for weeks of social movement, here’s a primer on the new French president’s boldest reform yet.

What’s the reform about?

Macron has wanted to modernise and liberalise France’s labour market since he became François Hollande’s economy minister. “We need a shock of trust, a real acceleration,” he said in an interview while running for president. “We need to pass this reform quickly, so that the first effects are felt fast.”

A first version of this reform was drafted under Hollande. Dubbed “El Khomri law”, after the then-labour minister, it was passed in August 2016 after months of protests. These included the Occupy-style social movement “Nuit Debout” (“Standing Up All Night”) during which participants occupied public places at night, sometimes for weeks on end.

Macron’s latest reform goes much further than the El Khomri law. It aims to entirely reorganise the French labour market, which is traditionally protective of workers’ rights, while drastically moving the power into the employers’ and companies’ hands.

The government, however, has promised that “these reforms… will bring more freedom, more protection and more chance equality to 18 million employees, three million companies and 2.6 million job seekers.”

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How does it work?

The labour law reform is composed of five government rulings, which list the 36 measures planned to “reinforce the social dialogue”.

Macron has always said he wanted this reform to start right after his election, so he chose to use his executive powers to force it through. Rather than facing a parliamentary vote on the text, he simply asked the National Assembly, which his party controls, to give the government the right to publish rulings instead. Among all the things Macron did this summer that didn’t help his approval ratings, this is high on the list.

Although the general content of the rulings has been known since Macron’s presidential campaign, the French prime minister, Edouard Philippe, presented the rulings in a press conference on 31 August. The project will be officially introduced during the ministers’ council on 22 September, and should become law later this month.

You can read the grand total of 160 pages here.

Why is it so important?

There are 3,000 measures in the French Labour law, or “Code du travail”. Re-writing and amending such a text is a meaningful signal, and a massive challenge.

Unemployment in France has hovered around 10 per cent for years (that’s about twice the UK’s rate). This reform is supposed to be the first step towards lower unemployment and a more attractive French market. Measures proposed include modifying the two main working contracts, the “CDI” or “Contract for an Indeterminate Period” (for permanent positions, highly protective of the employee’s rights) and the “CDD” or “Contract for a Determined period” (for temporary positions). Most French employees work on one or the other but the “indeterminate” contract is seen by employers as too rigid because it supervises lay-offs under strict rules.

Why are people angry?

One of Macron’s aims is to render the labour market more fluid – but many workers may see these measures as market deregulation rather than market modernisation. As the New York Times neatly put it in a brilliant op-ed:  “Mr. Macron’s economic policies favor employers over workers and chip away at what remains of the French welfare state.” So of course, not everyone’s happy.

French law makes it mandatory for the government to consult all unions before reforming the labour market. The Medef, the employers’ union, is fully on board; the trade unions – CGT, FO and more – not so much.

The trade unions didn’t wait for the full content of the rulings to be published to call for a protest, which will take place both in Paris and other cities on 12 September. The hard left, led by Jean-Luc Mélenchon from party La France Insoumise, has called the reform a “social coup d’etat”. His supporters will be marching ten days later, on 23 September. The Socialists (and their former candidate Benoît Hamon) will join both protests.

Macron’s comments have not exactly helped: during the summer, he said that “French people hate reforms” and doubled down last Friday, when he declared that he “would not give in to the lazy, the cynics, the extreme”.

What do the rulings contain?

Points that the unions are opposing include:

Social dialogue in small businesses – After the reform, negotiation in businesses with less than 20 employees will not automatically get a shop steward.

Industrial tribunals – Considered by employers as a constraint on hires in small businesses, sanctions (for the employer) and resort periods (for the worker) after a lay-off will be lowered and shortened. The number of working days paid after a lay-off will be cut down too.

Salary compensation for lay-offs – For all businesses, compensation will be a quarter of a monthly salary per year of service (instead of a current fifth).

Topics of negotiation – Topics that were previously set by trades or the law, such as premiums and contracts specifics, will now be negotiable within the company.

Collective breaking of agreement – The reform creates a device for a collectively-agreed breaking of contract, which previously could only be agreed on by the employer and the worker. A company’s administration will be able to define a common frame for voluntary redundancies.

Workers’ representation merging – The rulings create a new unit for workers’ representation, a “social and economic committee”, which will be allowed to negotiate with the employer without the presence of a union.  

Economic redundancies – The economic difficulties of multinationals laying off French workers will be “nationally appreciated”. Which doesn’t reveal much at all. 

What will this change?

This reform will set the political and social stage for the years to come in French politics – potentially allowing hard-left Mélenchon or hard-right Le Pen to develop and lead an opposition. If he is successful with this reform, Macron plans to go on with more: the French systems for pensions, unemployment insurance, professional training and the railway company SNCF are next on the list. But that’s only if Macron’s own list of enemies, which seems to get bigger by the day, doesn’t outgrow it first.

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