France attempts controversial reform to labour code

The draft law on reforming the French labour code, which was presented to the Council of State this week, is the most courageous reform attempted by president François Hollande’s administration, and doubtless the last of his five-year term.

The law will be defended by labour minister Myriam El Khomri in cabinet on March 9th, in the National Assembly in April, and in the Senate in May.

It was praised warmly by the right and condemned by prominent members of Mr Hollande’s socialist majority. Socialist party leader Jean-Christophe Cambadélis said he would not be able to vote for it “in its present condition”.

Ceiling on damages

The law would allow employees to work far more than the legal 35-hour week, puts a ceiling on damages in the event of unfair dismissal and make it easier to fire employees on economic grounds. It is likely to be watered down before passage.

In an interview with economic daily Les Échos, Ms El Khomri predicted "a very intense debate, because there's an important change of philosophy".

Socialist deputy Yann Galut tweeted, "I promise Myriam El Khomri an epic parliamentary battle." The 35-hour week will remain the norm. Employees will receive a 10 per cent hourly wage increase for overtime.

“The goal is to adapt to the needs of business,” Ms El Khomri said. Subject to in-house agreements, employees could be required to work up to 46 hours weekly for 16 weeks.

The law sets ceilings on damages awarded by labour courts to dismissed employees, based on the duration of employment: three months salary for less than two years; six months for two to five years; nine months for five to 10 years; 12 months for between 10 and 20 years, and 15 months for more than 20 years.

Short-term contracts

Ms El Khomri said the limit on damages would provide "clarity and security" to employers and "lift the fear of hiring, which is one reason for excessive recourse to short-term contracts". The law was comparable to practices in Germany, Italy, Spain and Britain, she said.

Companies operating in France have not been allowed to fire employees on economic grounds if their business was flourishing elsewhere. If the law passes, the company's situation in France alone will be taken into account. Again, Ms El Khomri argued that France is merely "aligning ourselves with laws applicable in other countries".